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…and your children’s children

Written By: - Date published: 8:09 pm, May 20th, 2010 - 70 comments
Categories: class war, Economy - Tags: ,

When I wondered what the rabbit was the last thing I thought it would be was the rip shit and bust budget we saw today.

Let’s be clear on one thing. Borrowing a billion dollars while simultaneously cutting services to pay for tax cuts is not moderate or responsible or centrist. Even if the cuts are for middle and low income earners too. This really is some far right government-you-can-drown-in a-bath-tub stuff.

It also shows the government was clearly lying when they talked about the tax change being revenue neutral and it shows they were lying about the need to align corporate and top tax brackets.

The tax take hasn’t been this low in my life-time. In fact it probably hasn’t been this low since my granddad was a boy and that will mean that one way or another it will be our children and our children’s children that pay for this bribe.

Meanwhile Phil Goff and his funny wee team has been caught flat-footed and defaulted to bleating on about how the tax cuts aren’t enough. FFS – what’s his next move going to be? Criticising national for not introducing the death penalty?

Even ACT have managed only the most token of complaints. Must try harder? That lame angle should tell you something.

And what it should tell you is National have slipped one of the most right-wing budgets New Zealand has ever seen right under the radar.

70 comments on “…and your children’s children ”

  1. Bored 1

    Irish, thank God you have said it, somebody has too. Labour sucks, they need to get with the programme. As somebody who would not be able to live long enough to vote National, I find voting for this rabble a Hobsons choice. National Lite, no distinguishing features. Managerialists one and all, no sense or vision that the world has changed. The right wing budget only slipped under the radar because there is no left hand side to the screen.

  2. Doug 2

    Marty G had a post today saying National were on the decline in the Polls. Close Up had a small poll tonight 80/20 in favour of the budget we see where the Polls head in the coming months.

    • IrishBill 2.1

      People will bank it. The polls will jump a little for a couple of weeks but coming months? I wouldn’t be so optimistic if I were you.

    • zonk 2.2

      was that Close up where 3 bald white 50 year old men got together to worhsip John Key?

  3. just saying 3

    i agree with you – its really firghtening.

    Just wait for more of this favourite tactic….

    1 Cut an essential service by, say, 15 percent.
    2. Wait a while and then announce a funding boost for said service of, say, five percent.

    The next time complaints come in about the dire results of service cuts, the government is ready with it’s set answer – We’ve just boosted funding by five percent!

    Media “watchdogs” swallow it all, wag their tails, and lick more government ass.

  4. frustrated 4

    “This really is some far right government-you-can-drown-in a-bath-tub stuff.”

    Grow up we have state provided education up until heavily subsidised tertiary education, state provided healthcare and a number of other state provided benefits including a very significant social welfare spend. To suggest we have a far right government is laughable.

    Get some perspective and you might get some more traction with the bulk of the population.

    • IrishBill 4.1

      So we don’t have the lowest taxes since WWII? And health and education aren’t taking real cuts? And we’re not borrowing a billion dollars to pay for tax cuts?

      Do the maths. Then try again.

      • Quoth the Raven 4.1.1

        According to this tax as % of GDP was 26% in 1950. It was 34.5 in 2008 What’s it going to be now?

        • IrishBill

          That would be because state-owned business profits substituted (immensely) for company tax. Total state revenue was much higher than it is today. But unlike you, I’m not going to play statistical games to justify a command economy.

          • Quoth the Raven

            You did say taxes not total state revenue. I wasn’t playing statistical games it was a genuine question I presumed you knew the answer. So what then are the numbers for total state revenue?

            • IrishBill

              I don’t have the stats at hand. I’ll see about posting them over the next few days.

  5. just saying 5

    How can labour attack future service cuts that result from this budget when it has now told everyone the cuts should have been bigger.

    I despair

  6. Salsy 6

    Im surprised they went as far with tax cuts as they did. Given its their only trump card, and it has now been played. They have no other bribe left for 2011, when the pinch of health and education cuts and GST rise are fully felt by all.

    • Lew 6.1

      They’ve bet the farm on a massive economic recovery. Recall that this is the same crowd who, not two years ago, were howling that Cullen had stripped the cupboard bare.


      • Marco 6.1.1

        No they have bet the farm on the rugby world cup. National have the golden chalice of ten’s of thousands of tourists pouring money into the economy only months before the election. It’s a two term government every which way you look at it.

        • Lanthanide

          Although All Black losses in the past have historically been unfavourable for the incumbent government.

        • Fisiani

          All my predictions about the Budget came true. A massive and encouraging step change in the economy.
          Substantial tax cuts for all workers. Letting all workers keep more of their money.
          75% of workers only paying 17.5 % tax.
          The decade of deficits left by the incompetance and spite of Labour now reduced to just 5 years.
          The Tax bill for every company in NZ reduced by 6.67%. Yes 6.67% (30% down to 28% is 2/30*100)
          The Left will try to claim foul about some hypothetical poor person on $25,000 who owns 6 rental properties who will lose out. Yeah right!
          The big losers of Budget 2010 are the rich who cleverly worked the shonky socialist tax system to get dubious rental property depreciation, eligibility for WFF and student allowances.
          Last year Bill English saved the NZ economy and thousands of jobs in carefully and prudently taking the worst edges of the recession and now he has revved up the growth engine. Next year we move up a gear. 2011 we allow the many Kiwis with cash in their pockets to invest in succesful state enterprises and promote further growth and thousands of jobs. Near full employment is on the horizon.
          Arise Sir Bill. For so he should be.
          The architect of 6 further terms of National government and the golden years for New Zealand.

    • I dreamed a dream 6.2

      “They have no other bribe left for 2011, when the pinch of health and education cuts and GST rise are fully felt by all.”

      Of course they have one bribe left up their sleeves. If they find they need to, they will move up the tax thresholds across the board. For example they may move the top threshold to $100,000 from the current $70,000, etc. They cynic in me says they will do that especially if next year they need some boost in the polls before the Election 2011. Of course that will be irresponsible from them, but what do you expect? They’re already irresponsible today.

      But what can Labour do? Nothing much really. When you’re in government, you’re in the box seat and have the power of incumbency to do things.

    • Gosman 6.3

      Many economic commentators were stating in Radio NZ National this morning that the growth predictions are quite modest, certainly from a historical perspective of a country coming out of a recession they are low. This would mean if the growth is higher than predicted then the Government will have more to play with next year.

  7. Bill 7

    So if the economy grows at somewhere north of 3% over the next few years as Treasury (?) has predicted then the billion dollars will be covered?

    That means 3% plus of growth just to stand still or only go this far backwards?

    Which won’t happen ’cause there isn’t going to be 3% growth.

    Nothing even close.

    So has NZ as an economic entity just been steered off towards the cliff by Johnny Boy and his mates who at this very moment are reaching for the door handle so as to bail just before the freefall? And are the msm sitting in the back seat whooping, hollering and clutching themselves over how rad that sideways turny sliding thing was?

    Are we really, really screwed, or have I missed something?

    • IrishBill 7.1

      No, I think you’ve covered it off quite succinctly.

    • I dreamed a dream 7.2

      “Are we really, really screwed, or have I missed something?”

      Wait till next year, the 2011 budget will probably raise the tax thresholds to give more bribes to the voters.

      Then we’ll be really, really, really, really, really screwed!

  8. Rex Widerstrom 8

    Meanwhile the opposition is MIA.

    I was briefing a client today on the situation in NZ (it happened to be on justice issues, it could have been on anything). I tried to find nice things to say about Labour… primarily because I think my client was beginning to think I was some mad lefty or righty (indeed he pointedly asked me where my personal sympathies lay) because after bagging National’s stance I couldn’t find anything to say about Labour.

    “Errr… well when the Chief Justice spoke out they err… blogged on it…” was all I could come up with.

    It’s time most of them let go the teat and got out the damned way, they’re doing absolutely no good where they are.

    • Well, you are a long way away from the action, Rex, so your ignorance is excusable. Hope the client wasn’t too miffed.

      • Rex Widerstrom 8.1.1

        So what have they said they’ll do in that field, TVoR? I’m all ears…

        • On what field, Rex? Yours was a general comment:

          ‘(it happened to be on justice issues, it could have been on anything).’

          • Rex Widerstrom

            Ah yes, sorry. Was there anything in Goff’s response concerning policing, justice, courts etc? Any commitment to programs to keep people out of jail? To revoke “3 strikes”? To ensure Corrections is funded to provide adequate rehabilitation to anyone imprisoned and held accountable for so doing?

            I realise it’s not as exciting (to media) as how much money taxpayers might be about to receive (I’ve yet to find detail of the government’s Budget initiatives, if any, in that area) but it’s an area on which Labour could readily differentiate itself but to date has done an appalling job on. Which was why I made it a more generalised criticism, in line with IB’s post.

          • …and if you just meant justice issues, start here: http://blog.labour.org.nz/index.php/category/justice/

            • The Voice of Reason

              Aaaaargh, sorry, missed your response, Rex. Didn’t mean to be ruder than usual. The Red Alert stuff is good, of course, but, no, as far as I know, Goff hasn’t made specific reference to justice in his responses so far.

            • Rex Widerstrom

              Thanks, TVoR. Figured we’d crossed posts by the nesting of your comment (way to go with the numbering thing, LP!)

              A lot of stuff there which, while valid in its own right, is stretching the definition of “justice”. ECan and MMP “justice” issues?

              However, we do have posts lamenting the removal of funding from PARS and Te Huringa… does that mean Labour will restore it? I too lament it, it doesn’t mean I’m about to find several millions to fix it.

              Kudos to Clare Curran for acknowledging the Sycamore Tree Project, but all we get in that post is warm fuzzies. The STP also needs funding, as do other agencies that work with prisoners. And if Corrections was funded for, and held accountable on the delivery of, proper rehabilitation programs then the load on many of these agencies would be significantly lightened. If she’s as enamoured of it as she seems, tap her Corrections spokesperson on the shoulder and demand some support.

              The closest we get to policy is this from Lianne Dalziell:

              Next time Labour is in government we will expand the collaborative approach to include the underlying issues that not only help address crime, but also help address youth unemployment, youth suicide, teenage pregnancy, poor educational outcomes, poor mental health, bad relationships and a wide range of physical health problems.

              Yes yes, all wonderful stuff (and all costly, but we’ll leave that aside for the moment, it’s perhaps too early in the election cycle to start demanding program-by-program costings). But all these initiatives, even if they’re brilliant from day one, will take time, and won’t help those already imprisoned.

              Where’s the support for the stance of the Chief Justice on sentencing and related issues? Where’s the fervent rejection of shipping container prisons? Where’s the determination to hold Corrections (and any private operators) accountable for outcomes?

              The best thing Labour could do right now though would cost not one cent. It could pledge to end the law and order auction come election time, giving people a clear choice in this policy area at least.

  9. ianmac 9

    Campbell Live had a housing guru on and he believes fervently that the housing prices will drop by at least 5% or more.

  10. ianmac 10

    I have not heard anyone at all factor inthe effect of the ETS costs in July. Surely that is going to swallow up the tax cuts more!

    • Marty G 10.1

      we’re paying a billion this year in greenhouse polluter subsidies, if that helps. Of course, we’re paying as a country either way, the question is whether people pay when they pollute or pay as taxpayers.

    • Lanthanide 10.2

      I saw some “analysis” that the 28% corporate tax rate, rather than putting us ahead of Oz, will really just even the score because of the incoming ETS.

      • IrishBill 10.2.1

        That fails to take into account the fact the Aussies pay higher wages, have compulsory super and a payroll tax. It’s always been cheaper to do business here because we’re structured for cheap labour.

  11. ianmac 11

    Bill English was asked on Checkpoint (Mary Lamb?) to explain/quantify the number of jobs that their Budget would produce. His reply was to go on about the longterm view. Try the question again and then again. No answer which suggests that the answer is no new jobs. So weakness here?

  12. ianmac 12

    Inflation likely to rise 3-5%. Effect on tax cuts? Or will the tax cuts cause inflation? Interest rates will rise accordingly.
    (I don’t know anything other than what “experts” tell me. 🙂

    • Lanthanide 12.1

      Bollard doesn’t automatically raise rates because inflation has gone up. The cause of that inflation, and whether it is structual or one-off, is considered, then interest rates may rise as a result.

      GST-stoked inflation is definitely one-off.

  13. Hamish Gray 13

    There’s a difference between borrowing billions to encourage growth through incentivising and borrowng billions to pour into things like the Cullen Fund and additional public services (which some believe also encourages growth…. somehow). I guess which you think is a better use of money reflects where sympathies lie.

    But according to Labour, they would not only borrow billions more, they’d also cut taxes further. I guess it’s easy to say that when you’re staring down the barrel of another term in opposition, but it’s hardly fiscally responsible.

    • IrishBill 13.1

      Sounds like you want the government to pick winners. And Labour are dicks. If the best you’ve got is “labour would…” then I suggest you say nothing at all.

      • ‘And Labour are dicks’

        You differentiating between the members and the Members of Parliament, Irish? I’m not sure that every member is a dick, if you know what I mean.

        • IrishBill

          The labour that claimed tax cuts were not big enough in the house today are dicks. If the party can’t take the idiots leading the parliamentary arm in hand then they need to seriously reevaluate their strategy.

      • Herodotus 13.1.2

        Dont forget that all Phil has to say re GST is that we could eliminate GST off F& V. When this equates to $1-$2/week for the middle & low earners. There are many on this site and RA that have become nothing more than cheer leaders for the cause without examining the shallowness of Lab cause. Lab still wants to protect landlords and from RA they got the tax rorts wrong, LAQC’s,Trusts and the top tax rates etc and they were aware of this 2-5 years ago but did nothing. And on the Lab budget streaming that there was some dissappointment to fixing the rorts and that the panel would have done more, Lab setup the rorts in the first place. This is where for me their language is hallow to comment on this now, and also that they have lost contact with their base support by this appoligist approach
        This is a great opportunity to see what Lab has to offer in vision, their values (which I am confused as to who they represent), in leadership (Be it Phil, the strategists and senior members of Lab), and how this vision is to be applied. If in 2011 they fail it will be nothing but a self inflicted wound.
        The only winner on the left for me over Labs performance is the Greens, they also had the strategy (successful for me) to prepare an alternative budget and become proactive. The Greens also commented on the poor performance of the police in regard to Child abuse and the crap performance by the Police, again Lab is silent. So today we cou;d point to the point in time when the greens mature to becomming more than the poor cousin on the left,and Labs dominance on the left has taken a massive hit.

        • IrishBill

          You’re obsessed with this Phil guy. It’s like you think I care what he thinks. Get over it.

          • Herodotus

            At this moment he is carrying the banner for the left. As this site has some tendencies towards the left then yes I do. As without him then 2014 is a long way off, and that is dependand upon what damage or successful foundations he sets up.
            Also as also commented on there is far too much blind cheer leading by some towards Lab, withoutr any real anylising of what they stand for, and until there is an heir apparrent on the left, Lab will have to head the charge even if some here don’t follow their ideology (If we only knew what their ideology was? -)

            • IrishBill

              The left is a lot bigger than Phil Goff.

              • Herodotus

                Yes agreed, but as he is the leader & his legacy & Labs strategy could cost 1-2 elections. But as also stated The Greens could profit from Labours poor performance, so that will make some happier. Plus supporters need to review what the left is
                Even if you are a Nat supporter IB we need an oppostion to be strong, to keep the govt honest and to test & debate their policies

  14. Jimnald 14

    Tax con by the New Zealand neo-cons

  15. Labour’s been shown up because it never took on the property speculators, who wouldnt vote Labour anyway. Too frightened to scare the middle classes who put the cash into rentals. So much for the party of Savage and Fraser. Labour is hostage to middle class envy when the working class majority sits and stews.
    A real Labour Party that stands for workers who produce all the wealth would campaign on what the majority of workers want, decent jobs for all on a living wage, affordable housing, and a capital gains tax on any speculation in land or property which is parasitic on productive activity.
    Currency speculators would be thrown in jail, and polticians who own farms or shares that benefit from policy changes would also be thrown in jail as insider traders. And it would make the private sector properly account for all public subsidies and hold to national standards in ethics and morality such as democracy is not for sale (note to the Closed Brethren that Shakespeare is really God not the fake in the Bible or the fake in Parnell).
    That would leave many in the current NACT regime somewhat poorer if not in jail.

    • Rex Widerstrom 15.1

      There needs,surely, to be a differentiation between investment in productive enterprise (be it some guy’s start-up IT business in his garage or a manufacturer or even, heaven forbid, a farm (albeit one that didn’t need subsidies to survive)) and non-productive “investment”.

      Into that latter category would go, yes, property speculators, currency speculators and the like.

      I believe (I haven’t analysed this myself) property investors will be slightly worse off under this Budget? Or is that just spin?

      Either way, not worse off enough… not because I have a thing against people getting rich but because I want to see them get rich by starting businesses which produce things of worth (or provide services of genuine worth) and go on to provide jobs (on fair wages) for these workers about whom we’re both, it seems, concerned.

      • dave brown 15.1.1

        Land nationalisation would sort out the productive from unproductive types. Farmers would be rewarded by their production not land values. A capital gains tax on the unemproved value of land would do the same job.

    • Quoth the Raven 15.2

      Currency speculators would be thrown in jail,
      Your a softy Dave. In Soviet Russia they could and did execute people for holding foreign currency. And don’t get me started on the farmers. Collectivise the farms and bring back the seven eighths law I say.

  16. Name 16

    Currently there’s a LOT of money sloshing around the world looking for a temporary home. With the euro in crisis, US interest rates in the basement, sterling teetering on a devaluation and China stuffed to the gills with US debt there aren’t many places it can go. NZ with relatively high interest rates, stability and lots of foodstuffs to export to a hungry world looks like a safe bet. English and National are only doing what most people would do if their bank manager appeared on their doorstep begging them to take a loan.

  17. Draco T Bastard 17

    Meanwhile Phil Goff and his funny wee team has been caught flat-footed and defaulted to bleating on about how the tax cuts aren’t enough.

    FFS, at this rate I may be stuck voting Winston First 😛

  18. Lanthanide 18

    Seems to me that with all of the rates so so low, the only tax options for raising revenue future governments are going to have without hurting the “average taxpayer” and being thrown out of office (even if there is good reason for such a tax hike – see Italy) is going to be things like land and capital gains tax.

    Anyway, here’s what Labour should stand for, IMO:
    Raise the 30% threshold to 100k
    Keep the 33% rate at 100-120k
    Introduce 39% rate at 120k+
    Take GST off fruit and vegetables and local body rates

    This way someone on $100k gets a tax cut of $900/year. Someone on $120k gets the same. Someone on $135k gets $0 tax cut and everyone above pays more tax. The GST off fruit and vege and rates helps those on lower incomes and home owners, while also helping landlords that own many properties. This would open up room to introduce a CGT on investment property – further underscoring that rentals should be for income, not capital gains.

    • A Nonny Moose 18.1

      Yes, the Nats have certainly made it difficult for the next Labour government. If Labour come round and have to raise taxes, the Nats will be able to crow about “but look at what WE did”. It hurts that the average voter forgets so easily.

  19. M 19

    I thought John “I smile a lot because I’m being permanently fellated” Key was wallpaper but Phil Goff was even worse – he needs to get some training from Brian Edwards or a least someone who can give him some witty ripostes.

    Hpoefully this budget will wake up all the poor, deluded fools who thought it was time for a change and that National was looking out for their interests after they find themselves bitch slapped.

  20. Adrian 20

    It doesn’t matter what Phil Goff says they ( particularly TV ) will edit it. Didn’t he say that the cuts weren’t enough for the low incomers, but they cut the “for…incomers”. The big earners , tv producers, editors , presenters, are selective arseholes with no interest in Labour getting it’s message across.

  21. jcuknz 21

    John and Bill seem to have kept their promises as far as I am affected by the changes and there is a ‘north’ margin to help with the Emmission Trading increases which were going to affect us anyway.
    I will continue to think positively, except about the blog whingers, and if more people thought that way instead of this continual slagging the chances of the country recovering would be better.

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