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Bill English unaware that GST is a tax shock!

Written By: - Date published: 11:25 am, June 26th, 2016 - 69 comments
Categories: bill english, gst, tax - Tags: , , , , ,

There’s no lie like an old lie:

A table from Finance Minister Bill English’s office shows 663,000 households – or 40 per cent – receive more in tax credits and other benefits than they pay in tax. Thousands more are neutral contributors, or are close to it.

An old lie oft repeated: 40% of households paying no net tax.

Maybe I’m too cynical to call this a politically convenient lie. Perhaps Bill English is genuinely unaware that GST is a tax that everyone pays. But now that we’ve cleared that up, hey Bill, how do the calculations look when you factor GST in?

69 comments on “Bill English unaware that GST is a tax shock!”

  1. Pasupial 1

    It’s not just GST being omitted either, does this putative taxfree percentage include; ACC, fuel taxes, import tariffs (plus any other skimmings that go into governtment slush funds). And these supposed “benefits”, do they include; NAct MPs salaries, limosines & helicopters; private prisons & hospital food; and irrigation schemes for cow farmers?

    If so, that is akin to; calling a slave’s whipping, a perk of the job.

    • Lanthanide 1.1

      Don’t forget alcohol and cigarette excise taxes, which surely all these lowlife beneficiaries are spending all their ill-gotten gains on.

      • Greg 1.1.1

        Think when TPPA kicks in with no tariffs, custom duties=+GST, etc,

        Bill will have to swap all these to Sales Tax, or introduce a differentiated GST, probably using a sugar tax to piggy back the new GST tax system on for it.
        Just as to soften up the peasantry for more silver to extort.

        Government cant afford to lose tax revenue because its linked to there debt payments 10 year cycle.

        Bill understand tax, most farmers pay little, except to councils,
        they get their GST refunded.

    • Bearded Git 1.2

      Some of those people will own houses/property and pay local body rates too, which is a tax.

      • Greg 1.2.1

        National really believe in there own bullshit propaganda, thats the irony,
        and why they can say pretty much anything now with a straight face.
        And the media print it as fact.

        Any Farms as registered GST businesses get all costs back.

        • Molly 1.2.1.1

          Bill English knows very well how much PAYE tax farmers pay:

          Inland Revenue Department figures provided to Labour MP Stuart Nash show the average tax paid by dairy farmers in the 2008/09 year was NZ$1,508, despite the average Fonterra payout being over NZ$500,000, the Dominion Post reported.

          Finance Minister Bill English this morning moved to defend farmers who were operating within the rules, saying that year was particularly bad in terms of a low Fonterra payout, but signalled changes will be made in tomorrow’s budget to “specifically tighten the taxation of farmers further,” although he would not go into more detail.

          May 2011 – interest.co.nz

    • Ralf Crown 1.3

      Add all user pay, and the heavily loaded electricity bill, water bill, rates, etc.

  2. KJT 2

    Bill English is perfectly aware of what net taxes comprise.

    Welfare to Sky city, banks and Dairy farms and the effect on the tax take from those on low incomes of GST, hidden taxes and charges do not fit the narrative, so they are simply ignored.

    Only 1 in 6 people read past the headlines. http://www.getspokal.com/if-you-only-read-one-post-about-headlines-read-this-one/

    National’s PR team are perfectly well aware of this.

    Hence all the headlines with “John Key says”.

    • Pasupial 2.1

      KJT

      I see what you did there. Clever, but the 2006 copyblogger site that your link in turn links to as reference, only says:

      Here are some interesting statistics.

      On average, 8 out of 10 people will read headline copy, but only 2 out of 10 will read the rest.

      Interesting isn’t the same as accurate.

      This Slate article is hopefully both (I got to the end, but only because I skipped most of the middle except the graphs):

      http://www.slate.com/articles/technology/technology/2013/06/how_people_read_online_why_you_won_t_finish_this_article.html

      • KJT 2.1.1

        Except I got the 1 in 6 from several references including some journal ones as well.
        As always I do not rely on just one source.

        • Pasupial 2.1.1.1

          I thought you were demonstrating your point that only a small proportion read past the headlines by; typing “1 in 6”, but linking to an article that says 1 in 5 (if you read past the headline).

          Either proportion is suspect to me because; they are only reported to one significant figure, and make no mention of who the study group is.

  3. Ross 3

    Bill English and David Farrar are honest and sincere on this issue. Yeah nah.

    http://pundit.co.nz/content/tax-burdens-some-facts-for-a-change

    • Draco T Bastard 3.1

      Ah, Blinglish and National lying again.

    • miravox 3.2

      Very informative, and that’s only on the income tax arithmetic. Ta for the link.

      This group earns 30% of the income, has 50% or more of the wealth, and pays 43% of the net tax. Is that an outrage?

      Now for the real top income/wealth earners, adding in the GST component and including other user-based taxes…

  4. Ross 4

    Susan Edmunds doesn’t even understand basic stats. 1 in 4 equals 25%, not 40%. Moreover, she doesn’t give readers the courtesy of viewing English’s table, so it can’t be checked for accuracy.

    More than one in four households are contributing nothing to New Zealand’s tax take.

    A table from Finance Minister Bill English’s office shows 663,000 households – or 40 per cent – receive more in tax credits and other benefits than they pay in tax.

  5. stunned mullet 5

    English is a career trougher and a mendacious git.

    i would direct anyone interested to the first graph in the attached link…

    http://www.ird.govt.nz/aboutir/external-stats/revenue-refunds/revenue-collected/

    • One Anonymous Bloke 5.1

      I, Simon William English, being chosen and admitted of the Executive Council of New Zealand, swear that I will to the best of my judgement, at all times, when thereto required, freely give my counsel and advice to the Governor-General for the time being, for the good management of the affairs of New Zealand. That I will not directly nor indirectly reveal such matters as shall be debated in Council and committed to my secrecy, but that I will in all things be a true and faithful Councillor. So help me God.

      Has Section 110 of the Crimes Act ever been invoked? It should be. Sweep the lying dogshit out of the House.

  6. AmaKiwi 6

    So why isn’t Grant Robertson calling him a liar?

    Wake up, Grant. You’re supposed to be Labour’s finance spokesperson.

    • Ross 6.1

      To be fair, the article was published only this morning. 🙂

    • One Anonymous Bloke 6.2

      Why didn’t the journalist check the liar’s assertions? Is she a little bit shit at being a journalist much?

      “Senior Cabinet Minister gets caught lying again”.

    • infused 6.3

      Grant’s still going through his Economics 101 books.

      • One Anonymous Bloke 6.3.1

        …and when he’s finished them, he’ll know more about economics than Double Dipton.

  7. Keith 7

    Is he finally acknowledging that our housing investors who are some of the most financially comfortable are not only paying no tax as they bludge off the taxpayer claiming tax deductions on their property investments, but they are also being paid to line their own pockets at our expense?

    Or will he tilt it at Nationals favourite strawmen the unemployed or solo parent beneficiary?

    And anyway Key has us set up nicely as a tax haven so isn’t this to be applauded?

  8. It’s quite deliberate. If this wasn’t about mendacious propaganda, they’d trouble themselves to put the word “income” ahead of the word “tax” because to do otherwise is misleading.

    I get why Bill English issues mendacious propaganda, but don’t have any explanation for why professional journalists just publish it without correcting him.

    • Draco T Bastard 8.1

      I get why Bill English issues mendacious propaganda, but don’t have any explanation for why professional journalists just publish it without correcting him.

      Because the ‘professional’ journalists haven’t got a friggen as to what they’re talking about. Can’t pull someone up on their lies when you’re an ignoramus.

  9. seeker 9

    What about the emissions tax which landed on every unit of electricity I used on July 1, 2010 I think. I am still paying it as far as I know, and I believe farmers and industries/businesses not so much.

  10. NZJester 10

    They have always tried to deny G.S.T. is a tax.
    There was that time when they moved the tax burden more onto the poor by lowering P.A.Y.E. but then upping G.S.T. to pay for it effectively hitting the poor harder than the rich. At the time they tried to claim then G.S.T. was not a tax even though its full name is Goods and Services Tax. Unless you were in the higher wage brackets like most National supporters you lost out big time in the tax swap.
    That is what actually helped start us more quickly down the road to an increase in the working poor as the extra money from the reduction in P.A.Y.E. was very small compared to the increase in the amount of G.S.T. added to most people’s basic weekly needs like housing, food, and transport.
    The copper line tax to pay for the ultra-fast broadband that is being charged to us using ADSL still is also a bit of a ripoff as we are subsidising others to have faster broadband than us. It is sort of the poor paying for the rich again too.

  11. Greg 11

    Lets look at this another way.

    Bill and Key, claim workers and household incomes are rising on their economic performance,
    They have made this claim repeating in Parliament.

    Is this statement an admission that 40% of workers and household incomes are not rising?

    Its a serious breach of Parliamentary rules for MPs to lie in Parliament.

  12. Graeme 12

    And in the other rag today, this can of worms / chalice of electoral suicide,
    http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=11663459

    Looks like there’s going to be an all out assault next week. Having a crack at Working for Families and pensioners

    • Draco T Bastard 12.1

      Our superannuation scheme is a brilliant example of a UBI in practice.

      • Graeme 12.1.1

        Yeah, and quite a substantial one too. The political challenge is how it’s modified to become universal, without absolutely shafting some sectors, like young families and the elderly. Once it’s entrenched and society adjusts we could be in a very good place, but getting there does my head in. I’m not far away from it myself, and the way it changes my thinking around what we could do in our business makes me very interested in a UBI from an entrepreneurial and creative perspective.

        WFF and NZ Super are political minefields for any government who tries to cut them back, and will affect a lot of mobile voters. I really can’t see the current lot having the balls to go there.

        Another distraction?

    • b waghorn 12.2

      That’s why we should take on the Maori parties policy of people being able to retire any were from 60 to 70 , the earlier you retire the less your pension is , and if you work to 70 you get more.

      • Gabby 12.2.1

        Sort of a punishment for those bastard manual workers, then.

        • b waghorn 12.2.1.1

          I’m a bastard manual worker and if my body is buggered by 60 (which is looking likely) I’d rather have the option of getting the pension than having to go pump gas on the night shift .
          I’m planning on working till I’m dead if I can but plans and what happens can be two entirely different things.

    • Greg 12.3

      People getting Super and working pay 30% tax on extra earnings.

      With high youth unemployment why make people work until they are dead,
      then wonder why their is a skill shortage.

      Immigration isnt a economic factor when immigrant arrive in NZ with qualifications employers wont recognize.

      Good for employers paying minimum wage ad lower.

  13. mosa 13

    I tell you what Bill English is very aware of and thats the fact that corporates DONT pay their fair share of tax in this country.
    He would rather steal it from hard working and destitute kiwis than enforce the hugely wealthy too pay their contribution to our society.
    He prefers to cut back on a kiwisaver kickstart to incentivise people too save for retirement and not increase the employer contribution too make it just that bit more equitable like the Aussie super scheme does for Australians.
    Or review the tax paid on kiwisaver contributions and do the right thing and eliminate it.
    And the unfairness of paying GST on our rate payments to local councils.
    Or reduce the huge amount of tax paid on the fuel we put in our cars.
    But Bill English is a lot of things but being progressive and fair and equitable is not among them.
    Protecting donors and influential friends by keeping the status quo the National party and their friends love so much is all you can ever expect if you vote for these people.
    And they consider themselves New Zealanders !!!!

    • Greg 13.1

      You can bet most employers are signing up the 167k working visa holders in the county. IRD should have a figure on rejected Kiwisaver applications. You can bet the employers keep the 300$ sign up grant

  14. Jack Ramaka 14

    The majority of NZers are being booted down the garden path, however they don’t actually realize.

  15. b waghorn 15

    I’ve been reliable informed by a national voter that poor people can avoid gst by growing veges and getting stuff from opshops , so national s disciples will swallow englishs’ lines hook line and sinker.

  16. Smilin 16

    The right always contend they represent the people by addressing every political situation as if they have worked it all out before they go into political double speak to explain it ,but in fact very rarely do and they don’t have any real justification to do what they do but go ahead with their department of coercion and lobbying plus the media and CT working flat out shutting down any rights the masses have to question the validity of the govts position or decisions
    Like this govt should have been gone by lunch time last election but it just shows how corrupted the voters thinking is in believing any of the shit this govt does is ultimately good for this country in say 30 yrs
    apart from dealing with what any govt would have had to fix in the last 8 yrs the majority of their governance has been to keep the working masses from being able to seen their way to what used to be possible to earn in housing education and a sense of nationality which applied to all

  17. infused 17

    I’ve been harping on for a tax-free threshold on here for years.

    Working for families is wasteful. Someone needs to cost out scrapping these benefits vs lowering tax and creating a tax-free threshold (think up to 8-10k).

    This is better for everyone.

    • Pat 17.1

      do the numbers…WFF costa around 2.8 billion per annum and is targeted by income to those likely in need (and is temporary in nature)..whereas an across the board tax free threshold of 10k would cost approx 3.8 billion in lost revenue and is provided whether needed or not (and is permanent)

      we could increase taxation in other areas to make up the one billion plus shortfall (likely in the immediate next band) in revenue or we could reduce public service provision.

      better for everyone?

      • Molly 17.1.1

        “is targeted by income to those likely in need (and is temporary in nature)”

        Not really. It is a blunt instrument that was created in order to assuage those “worthies” who were feeling the pinch, that something was being done.

        Read the articles about this couple who own a business mortgage free that gives them a low enough personal income to get WFF.

        “Orchid growers Joe and Annemieke Sonneveld have received $20,000 from Working for Families in some years because, with six children, they qualified for partial subsidies as long as they earned less than $172,425.

        Even with their eldest, 17-year-old Suzanne, now at Manukau Institute of Technology, they still received partial subsidies on income up to $148,991 before the Budget.

        The Budget decisions to claw back the tax credits at a faster rate of 25c in each $1 above $35,000 a year will cut their family support drastically, but Mr Sonneveld is not worried.

        “I’m happy with the higher incomes being targeted for less family support,” he said. “That’s a good move – people who can afford less Government help will feel it, and I’m quite happy … Lower incomes will still have access to it.”

        How many people do you think this applies to? I can think of a few among my personal acquaintances, who are successful business owners (with many of the offsets including vehicles, some utilities and mortgage payments reductions) who also qualify for a community services card etc. I’m guessing farmers, on their low personal income, also have a benefit for their children going to tertiary study.

        Also nowhere in those articles, including the fawning editorial – did it mention that WFF has to be applied for. So, despite their personal views and values being given a public platform, their actions do not match.

        The way WFF is set up allows for these anomalies, where families in need are not necessarily those who qualify.

        • Pat 17.1.1.1

          whats your point?

          Selecting a single case study that may or may not be real and then presenting woolly figures like” have received $20,000 from Working for Families in some years because, with six children, they qualified for partial subsidies as long as they earned less than $172,425.” means what?…because to receive 20 k in any one year their income would have to be less than 70K and all six children would have to qualify.

          How many people do i think it applies to?….greatly less than you infer given that only 6.1% of NZ families have 4 or more children and WFF is not claimable for children receiving student allowance regardless of age.

          Is it manipulated by the self employed, undoubtably but that is a compliance issue and would suggest if income is being manipulated for WFF purposes is also being manipulated for tax purposes….the solution is the same, stronger enforcement.

          And Oh dear “it has to be applied for” (once, after unsolicited notification you qualify)……thats terrible.

          • Molly 17.1.1.1.1

            My point was that WFF is a blunt instrument, and does not reach all those who are in need of tax rebates because of the design for qualification and delivery.

            I don’t understand what your point is – from what I can gather it is a purely WFF costs the government this, and the tax-free threshold would cost us that.
            A very silo approach which ignores the other costs bourne by the government and families who are struggling but do not qualify for WFF. One of the reasons I would support a UBI.

            (BTW, I’m in the home education community so I know the people in the story from there. Lovely family, but indicative of the mindset that only looks at wider issues from a personal perspective. And… woolly figures? That $20,000 was a direct quote from the person interviewed and shown as such).

            • Pat 17.1.1.1.1.1

              “My point was that WFF is a blunt instrument, and does not reach all those who are in need of tax rebates because of the design for qualification and delivery.”

              It may be blunt but is considerably sharper than a tax exempt threshold of 8-10k

              “…….One of the reasons I would support a UBI.”
              Say what? where in the previous exchange has UBI been raised?

              “And… woolly figures? That $20,000 was a direct quote from the person interviewed and shown as such).”

              It was indeed a direct quote….and very woolly given that they cannot receive 20k in WFF UNLESS their income is less than 70k…NOT 172k

              I am at a loss to understand what your preferred form of redistribution of tax is and to what purpose?

              • Molly

                “I am at a loss to understand what your preferred form of redistribution of tax is and to what purpose?”

                Stop apologies for schemes such as “working for families” until they work for ALL families, especially the most vulnerable.

                Working for Families is a misnomer – it more accurately should be – “Working for Some Families – of whom some are vulnerable, some are not.”

                Not to mention, creating a longer breathing space for low wages to cause havoc amongst the working population.

                “I am at a loss to understand what your preferred form of redistribution of tax is and to what purpose?”

                That’s probably because I didn’t propose one. I just put forward some criticism of the WFF scheme, and you respond by asking me for a comprehensive tax reform?

                • Pat

                  “Stop apologies for schemes such as “working for families” until they work for ALL families, especially the most vulnerable.”

                  so you think WFF is inequitable, OK lets scrap it….what would you like to replace it with? or don’t we replace it?

                  • Molly

                    “so you think WFF is inequitable, OK lets scrap it….what would you like to replace it with? or don’t we replace it?”

                    If this dialogue is going to continue – the question is: do you think it is inequitable? If you don’t you will continue to jump on any comment I make.

                    An immediate fix would be to make this available to all families with children – whether working or not.

                    A long-term fix, would be to support workers to raise wages and incomes, instead of subsidising businesses to keep wages low and sort out the cost of housing our people.

                    • Pat

                      “If this dialogue is going to continue – the question is: do you think it is inequitable? If you don’t you will continue to jump on any comment I make.”

                      Assume you are referring to the IWTC portion of the WFF package, or do you object to only those with children receiving it? If the former then , yes it is inequitable but with justifiable reason. There are significant costs associated with paid employment that are not incurred if not in paid employment and there is also an incentive factor.

                      “A long-term fix, would be to support workers to raise wages and incomes, instead of subsidising businesses to keep wages low and sort out the cost of housing our people.”

                      There is no improvement in living standards to be gained by raising wages if there is a commenserate increase in costs, particularly if those costs are not discretionary.
                      The housing affordability issue is driven by quite different factors in the current circumstances and giving private landlords a greater proportion of revenue, irrespective of its source will not improve that situation.

                    • Molly

                      ” If the former then , yes it is inequitable but with justifiable reason. There are significant costs associated with paid employment that are not incurred if not in paid employment and there is also an incentive factor.”

                      OK. Your use of “justifiable reason” and “incentive factor” gives me an indication of why we are disagreeing on this issue, when I usually agree with your comments on other posts.

                      From a purely personal perspective, when we have people living in poverty, we should look towards picking them up – without dividing them into “justified” and “non-justified” groups. Otherwise we are ignoring a whole demographic of NZers.

                      As for the “incentive” factor – incentive for whom?

                      ” There is no improvement in living standards to be gained by raising wages if there is a commensurate increase in costs, particularly if those costs are not discretionary.”

                      Agree. Which is why I raised the issue of increasing housing costs. But you are right there are multiple factors alongside this that are important to resolve. But once again, it seems you are asking me for a full tax and policy package, as a response to criticism of WFF. The point is, no other significant policy exists to meet those who fail to meet the WFF criteria. We ignore them, and hide behind the WFF flagship of “helping families”.

                      Successive governments have failed to create policy that ensures every NZ has access to safe, adequately paid employment, and safe, affordable housing.

                      (As for cost? The $20 billion towards the MoD can be slashed to bring this to the table, as well as removing the tax rebates that National brought to the higher earners when they took office. Policy in multiple areas that would address the rising cost of living, inequality and climate change would be better than continually chasing rises in GDP).

                      It is not the cost that is stopping any progress, it is honest appraisal and political will.

                    • Pat

                      “But once again, it seems you are asking me for a full tax and policy package, as a response to criticism of WFF. The point is, no other significant policy exists to meet those who fail to meet the WFF criteria. We ignore them, and hide behind the WFF flagship of “helping families”.”

                      Not at all….my original discussion began with an assertion by Infused where he expressed a preference for a tax free threshold of 8-10K over WFF…….I argued WFF was a better use of funds, not that it was perfect or even necessarily desirable….you entered at this point and broadened the discussion to areas outside WFF and thereby created a “full tax and policy package” requirement for yourself.

                    • Molly

                      “.my original discussion began with an assertion by Infused where he expressed a preference for a tax free threshold of 8-10K over WFF…….I argued WFF was a better use of funds, not that it was perfect or even necessarily desirable….you entered at this point “
                      So we disagree on the “better use of funds”. I have no problem with that.

                    • Pat

                      you believe a tax exemption on the first 8-10k costing approx 3.8 billion is a better use of funds than the current WFF program at a cost of 2.8 billion….so in effect a tax break of around 15 – 20 dollars a week for everyone is better than what WFF provides…AND it removes a billion p.a. from other services?……right.

                    • Molly

                      “you believe a tax exemption on the first 8-10k costing approx 3.8 billion is a better use of funds than the current WFF program at a cost of 2.8 billion….so in effect a tax break of around 15 – 20 dollars a week for everyone is better than what WFF provides…AND it removes a billion p.a. from other services?”……right.

                      I don’t play the false dichotomy game. If an extra billion is needed to fund a tax-free threshold or more for a UBI, then it can come from a variety of other sources.

                      Money given to the poorest of us, is spent immediately and locally and circulates around the community, more than $2 billion annually in tax breaks – which is more likely to be spent overseas or out of the NZ economy.

                      My criticism of WFF remains – it does not help those who are most in need of it. And you haven’t addressed that point – or even acknowledged it.

                      Where do they go in terms of societal or government help to deal with rising costs of living, and the negative effects of that constant stress?

                      This lack of acknowledgement by political parties (sans Mana) for the most vulnerable NZers, will continue if commentators like you use WFF as an example of hardship relief – especially accompanied by a – “what else can you expect?”

                    • Pat

                      forget about the UBI for now, considering it isnt likely anytime soon and if it is its level of support will likely be a great disappointment to its proponents and also given it isn’t part of the original discussion…..who (and how) do you think will be better off with a tax free threshold of 8-10K in place of the current WFF regime? A case example?

    • simonm 17.2

      I agree. I was working in Australia last year and the 2015 tax-free threshold for all working adults, regardless of their marital status or family situation, was $18,200. That means no-one pays any tax on any of their income below $18,200. Therefore working people in Australia receive substantially more net income than their New Zealand counterparts.

      I don’t doubt that Working for Families was implemented with the best intentions to to help families on low incomes survive in an NZ’s increasingly expensive society. In reality however, the programme has ended up being a costly taxpayer funded subsidy that allows NZ employers to get away with paying low wages to their workers.

      • Pat 17.2.1

        Australians in fact get both…no tax on the first 18k AND a WFF type payment called Family Tax Benefit.

        https://www.humanservices.gov.au/customer/services/centrelink/family-tax-benefit

        “In reality however, the programme has ended up being a costly taxpayer funded subsidy that allows NZ employers to get away with paying low wages to their workers.”

        Although I am inclined to agree that it is a form a wage subsidy it obviously hasn’t held Australian wages down to the same extent so think it reasonable to seek the cause of low wages elsewhere…and as noted earlier if choosing between the either a tax free threshold and WFF then given the examples cited the WFF is considerably cheaper.

  18. fisiani 18

    A whole post about Bill English’s failure to use the word INCOME. How deep is the barrel that is being scraped?

    • Stuart Munro 18.1

      Really we’re trying to help Bill understand that his comprehensive economic failures can be improved upon. Today’s word is ‘income’, and for non-troughers and tax income minimisers it is an important term that even nepotistically appointed dusfunctional finance ministers should know.

    • left for dead 18.2

      Don’t worry fisi, you’re there, at the bottom admittedly, smelly but there, none the lest.

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    2 weeks ago
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