Tracy Watkins awards the first week of Parliamentary politics this year to Phil Goff, and points out that it’s as much due to his and Labour’s much improved performance as it is to Key and National’s shambolic, over-promise, under-deliver governance.
“It is rare for an Opposition leader to be gifted such an easy ride out of the starting blocks. No wonder Mr Goff was mopping his brow by the end of his speech. Over in National’s camp, meanwhile, there must have been plenty of hand-wringing.
A hike in GST (yes, it has only been flagged at this stage, but it is unthinkable that Mr Key would float the idea only to yank it) gives oxygen to Mr Goff’s “for the many, not the few” narrative, given that the corresponding tax cuts will disproportionately benefit the rich, while the lowest-paid will probably come out even at best…
So National’s job is to sell a rise in GST as good not just for the economy but for households. But that is a tall order when it can’t even put dollar figures to its compensatory tax cuts. As a Fairfax survey this week showed, people are open to the idea of paying higher prices, so long as it is accompanied by tax cuts”
The critical thing here is the last part “so long as it is accompanies by tax cuts”. The reality is always going to be that low and middle income Kiwis (and remember the median income is about $28,000) are not going to be getting tax cuts out of National. They’ll be lucky to get compensation to break even. All the rest will be going into tax cuts for the rich.
“So it is not an impossible sales job. But it won’t be until the Budget, still three months away, that National is ready to fill in the blanks. The danger in the meantime is that expectations over the size of any corresponding tax cuts will get out of whack with what is actually possible.”
I’m still waiting for my ‘North of $50’ tax cut. I don’t see people falling for another con-job.
“The spin ahead of Mr Key’s speech was that he would launch his second year in office prepared to take the sort of risks that last year’s global meltdown denied him.
Unfortunately, the hype ran ahead of the speech… the speech was panned as lacklustre and timid
All the Key camp’s Big Tuesday hype succeeded in doing was leave the talk of a big, bold economic plan trailing in the wake of the reality”
Naitonal has no plan to lift economic growth. Fiddling around with tax rates sure as hell won’t do it, even the Tax Working Group doesn’t claim that. Behind the hype, this is a do nothing government with no plan to fulfill its ‘aspirational’ promises.
John Armstrong makes similiar points:
Exactly who and how many really stand to benefit big-time from the proposed reduction in tax rates – and how much spin-off there is for National in the process – are the big questions.
Someone on $70,000 would receive about $21 more in net terms. Someone on the average income of around $50,000 will get an extra $12 – about the same as they would have got under National’s earlier plan. Those on $30,000 will get barely $3 more.
And someone on the Prime Minister’s salary will get $500 a week while a full-time worker on the minimum wage won’t get enough to cover the increased GST on their family’s food bill.
Key’s concept of fairness, however, seems to apply only horizontally
He wants to reward rich tax cheats by cutting the tax of all rich people. Middle New Zealand is invisible to him.
Labour’s Phil Goff probably cannot believe his luck. Key and English have gifted him and his finance spokesman David Cunliffe the opportunity to fiercely differentiate their party from National. It puts Labour on the side of the many who look like not gaining very much, while National is seen as aligning itself with the few who will gain a lot.
Labour is already defining the debate as tax cuts for the rich paid for by the poor.
There is grumbling in the Beehive that this is simplistic sloganeering.
I can hear the Nats whinging now: ‘don’t tell them we’re ripping them off to give ourselves tax cuts, they won’t vote for us if they know’
Armstrong doesn’t forget that this was supposed to be a growth plan, not a tax cut money grab:
By any economic measure, the master plan released by John Key this week for galvanising New Zealand’s productive sectors can be criticised for failing to be really bold.
It could be more accurately criticised as invisible. Just as the Jobs Summit had no disernable effect on joblessness, Key’s growth ‘plan’ won’t alter growth one iota.
Finally, Fran O’Sullivan nails it:
On Tuesday Key made the cardinal political sin of over-promising and under-delivering. He promised a bold economic programme would be unveiled in his opening statement to Parliament.
Instead, we got a money grab for the rich. Reinstatement of R&D spending that National cut less than a year ago, and the re-announcement of about 50 existing items of spending, many of them from Labour’s time. Nothing bold, more like a limp flag of surrender.
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