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Austerity = low tax take “surprise”

Written By: - Date published: 7:40 am, May 9th, 2012 - 37 comments
Categories: tax - Tags:

Once again the government’s books are showing a lack of income – $1.8 billion this time. Once again it is a surprise and the economy’s fault – both locally and globally. Not the government’s, they have no influence over the economy, except when they want to take credit.  Or when they sack thousands of public sector workers who suddenly have no income and don’t spend any more.  Or raise GST so people can’t afford to spend; and give tax breaks to the rich, who don’t need to spend and pay off debt instead.

Their lack of any sort of job plan causing 6.7% unemployment has nothing to do with the low tax take of course, it’s all Christchurch’s fault.

No investment in growth?  Nothing to do with it, it’s those dodgy global markets.

And those tax cuts were fiscally neutral – if you’ll just give me a bit longer to work out how to manipulate the figures…

Fortunately they’ve managed to cut further than expected into the public sector, so the books aren’t too out of balance.  Shame if you wanted the health and education they’ve cut of course, but austerity must be right, Bill said so*.

* shame Europe no longer agrees

37 comments on “Austerity = low tax take “surprise” ”

  1. marsman 1

    Blatant plunder with a nasty grin. Wake up Aotearoa!

  2. tc 2

    Frogs in water being warmed by the flames of deliberate ecomonic and social polilies of NACT/MP.
    MP don’t escape blame here, they passed the bills along with the shonkey mob.

  3. tracey 3

    C’mon be fair, wasn’t the job summit a huge success rather than a sideshow?

  4. Tigger 4

    But wait, the cycle way! Surely the hundreds of thousands of jobs created by that genius plan boosted our tax take by millions?

  5. Isn’t it to soon to call what effect the recent switch to “austerity” would have on the tax take?

    Where would the economy be now if the tax switch hadn’t happened? I asked Bernard Hickey that yesterday, he said “Good question. Treasury should, but they would say too early to judge…”

    Whether things would be better or worse if different policies had been followed can only be speculation, but would we have weathered the world economic difficulties better if Labour had won in 2008? Or if National had won in 2005?

    Government debt (and costs of servicing debt) would have increased, it’s just a matter of how much of a degree.

    World dairy prices would presumably have followed the same pattern.

    • Lanthanide 5.1

      If Labour had won 2008, we wouldn’t have a ridiculous $10b white elephant motorway scheme in place. That, by itself, makes the books look a lot worse than they otherwise would.

      If National had won in 2005 we would have had big tax cuts. Probably the government wouldn’t have been in as good a debt position as it wouldn’t have been running as large surpluses from 2005-2008 as they ended up doing.

      • insider 5.1.1

        All those highways were in the roading plans under Labour – some of them were even underway in the design and construction process – Waterview, Vic Park, Waikato expressway, Tauranga eastern link. The Nats did not invent most, if any, of them. What they did do was raise some of them up the priority order.

        • Lanthanide

          That only makes the situation marginally better. But it still doesn’t justify it.

        • McFlock

          What they did do was raise some of them up the priority order.

          Well, duh. They raised the stupid ones up the priority order, alongside one or two good ones. This is why building stupid roads is their fault. 

    • Draco T Bastard 5.2

      Isn’t it to soon to call what effect the recent switch to “austerity” would have on the tax take?

      After 4 years of it? No.

      Now fuck off you apologiser for psychopathy.

      • Pete George 5.2.1

        National have only been back in power for three and a half years – are you referring to the economic downturn over four years? You may have a short memory, because the initial attempt at dealing with the “recession” was stimulus, but hardly anyone thinks we can keep pouring borrowed money into a difficult economic climate indenitely.

        David Parker was on NatRad this morning agreeing that we should be aiming at getting back to surplus by 2014-15, which means some austerity.

        Yesterday David Shearer was agreeing that a level of austerity was required.

        • millsy

          So how many hospitals and schools do you want to close and how many state houses do you want to sell.

          Do you not see that taxing those on higher incomes is much better than cutting services for everyone else.

          The wealthy have not had to pay an extra cent extra in tax since this crash. Instead, services have been cut for everyone else.

        • bbfloyd

          her we go again….. petey boy making half arsed, incomplete quotations to support a dangerously flawed world view…. which seems to have petey himself at the center of it…. what a surprise….

          another grammatically correct pile of nothing from united futures go to guy…..

        • grassroots

          There is an alternative.  It is called increased taxation for the wealthy.  Last time this was tried it worked perfectly well and the Government paid off all of our debt.  It is a shame some cannot even think of it as an option.

        • Draco T Bastard

          National have only been back in power for three and a half years

          And over that time they’ve made things worse for the majority of people and it’s all due to their implementation of austerity which seems to only have affected the majority while the rich minority are doing quite well out of it.

        • Lanthanide

          It was Nationals’ incessant screeching about tax cuts that forced Labour to roll out tax cuts in the 2008 budget (tax cuts that we couldn’t really afford, but were a bit fairer). Those same tax cuts that National then cancelled, booked the ‘savings’ from doing so and then spent on their own tax cuts.

          • Colonial Viper

            Cullen should have introduced a stamp duty on houses and mortgages. Too unpopular with the middle and upper middle class for a centrist party like Labour to risk though.

            • rosy

              Yep. That would make up for few of the items missing from our universal, pure GST system.

      • “Now fuck off you apologiser for psychopathy.”

        Awesome level of discourse right there

  6. Lanthanide 6

    [Moved – also the delete button doesn’t seem to do anything, just goes to a blank page with -1 on it]

  7. Dr Terry 7

    Given the harsh and punitive measures the Tories have taken (and intend still to take) it would be a shock if they did not return to “surplus”! So what if they do? Money is surely the servant of human beings, not the master (or has that reversed, making me very “old-fashioned?) Will it be just fine to have a prosperous country that is filled with wretched and miserable people? Or filled with those who remain after establishing a New Zealand colony in Australia?
    I wonder if anything can get worse in blessed post-Key days? Even Collins and Joyce would find it hard to be less compassionate than this product of the (corrupt) world of finance and big business.

    • bbfloyd 7.1

      at least collins has the advantage of having a face that would make an excellent replacement for the “bogey man” used to scare little children into behaving better…

      joyce is “grownup” scary…..

  8. muzza 8

    What we are really seeing is the deliberate sabotage of the NZ paliamentary system. People know that government, and most of parliament do not work for the country or those in it. We see decades of evidence, and the contimual changes of government have all lead us to the current point, while many still argue the merits of left or right, the country continues its slide down the toilet.

    The interesting reaction will come, when presented with the opportunity for NZ to dispatch its governence system for one administered offshore.

    What will Kiwis choose (not that it will be a choice)

  9. DH 9

    I wonder how much the GST increase is affecting the tax take. 15% is a strong incentive for certain types of people to do cash deals and that must hurt the tax base.

    • bbfloyd 9.1

      from memory, the gst take is down over half a billion…. and it’s not just “certain types” doing cash deals…. the “black” economy is one of the few success stories of this government…. the way it’s growing….

      • DH 9.1.1

        That’s been my feeling for a while now. A lot of immigrants who go into business here are from countries with a cultural aversion to paying tax and the IRD have acknowledged it as a problem in the past. When people do a cash deal it’s not just GST the taxman loses, it’s the 30% income tax as well since the whole transaction has to be kept off the books. Every $1000 deal done for cash loses the taxman $390…. would add up pretty fast.

        • McFlock

          I’m just wondering how long it will be before we start getting lower scores in the corruption scale.
          After all, it seems to be well ensconced at the top. 

        • rosy

          A lot of immigrants who go into business here are from countries with a cultural aversion to paying tax and the IRD have acknowledged it as a problem in the past.

          I suggest our cultural practices of ‘mates rates’ and ‘under the table’ might be booming too.

    • Lanthanide 9.2

      I simply can’t square the reported income figures, particularly in Christchurch, with the amount of economic activity I see out in the malls day after day, people spending spending spending.

      I’ve come to the conclusion that our very high number of small home businesses are actually just ways to cheat the tax man. Set up your own home business that makes a turnover of $20-30k/year, not really terribly worthwhile, but when you get to claim house insurance, electricity, phone bills, car expenses (things that you would be paying for anyway) back against your ‘company’ it becomes more worthwhile.

      I guess the way to justify or squash this suspicion would be if IRD publishes stats on the number of small businesses and how much they claim back on average. Haven’t seen any national commentators ever mention it so maybe it’s not really an issue. This wouldn’t address the cash economy side of things, of course.

  10. eduardo kawak 10

    How about Parliament do some walking the walk for a change, instead of talking the talk and then doing the opposite?

    PM – New salary (backdated to July 1): $411,510. Was: $400,500.

    Deputy PM – New salary: $291,800. Was: $282,500.

    Cabinet Minister – New salary: $257,800. Was: $249,100.

    Ministry Outside Cabinet – New salary: $217,200. Was: $209,100.

    Speaker and Opposition Leader – New salary: $257,800. Was: $249,100.

    Backbenchers – New salary: $141,800. Was: $134,800.

    No sign of austerity measures there.

  11. Paul 11

    The French
    The Greeks

    • Colonial Viper 11.1

      Iceland are the heroes mate, they told the banks where to shove it.

  12. Paul 12

    And the Bolivians they told the corporates to stuff it

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