Costs of the Nats tax cuts – commentators’ views

Written By: - Date published: 12:15 pm, October 9th, 2008 - 4 comments
Categories: articles, same old national, tax, uncategorized - Tags:

Here’s a smattering of what some of the commentators are saying:

Gordon Campbell: Putting tax cuts ahead of science and research neatly underlines the lack of vision, or sensible strategy for growth in the National package … The cutbacks on science and research will only send more scientists and high tech jobs offshore and rob New Zealand of the ways and means to add value to our exports. Ditto for the savings that would have helped to reduce debt, promote productive investment, help people to afford for their first homes, or plan for their retirement.

John Armstrong: If the election is about economic credibility, then the rescue plan will have to consist of more than amending the Resource Management Act or Key calling in public service chief executives for a stern chat.

Brian Fallow: … even from the standpoint of fiscal prudence, never mind aspirations to higher living standards, the crucial yardstick against which to measure economic policy is whether it will contribute to lifting that productivity number. National’s tax package, which also includes scrapping the R&D tax credit – admittedly only one plank of its economic policy – does not score highly by that measure.

Jenni McManus: Voters awaiting National’s grand plan for managing the effects of the global financial crisis will be disappointed in the tax and economic package released today by opposition leader John Key and finance spokesman Bill English.

And from the same article:

Jo Doolan: a tax partner at Ernst & Young, says she is “gutted” at Key’s overall package, saying she’s hoping it’s a policy of political expediency to get National elected, rather than what it might actually do in office. “The whole thing is hurried and ill-conceived,” Doolan says. “Top earners don’t need tax cuts when people are struggling and times are tough. When you introduce a big change like Kiwisaver, you don’t tamper with it. We need to develop a savings culture and this sort of thing doesn’t help. People need certainty.”

Doolan says she suspects behind the package is political one-upmanship – that Key and English were determined to outdo Cullen by producing a self-funding tax cut package, no matter what damage might be done in the process.

The R & D cut is another sore point.

“People do spend on R & D,” Doolan says. “The whole aim is to focus on R & D and improve productivity. What little growth we’ve had in the past few years has come from growth in the labour market. If we’re going to grow and improve, the only way is by improving manufacturing processes, better software development, being environmentally friendly – things like that. That’s where anyone with any vision would want to go.”

She says Key has missed a golden opportunity to show New Zealand some leadership. As she sees it, he just blew it.

“Either we’re part of the global world or we’re not.”

I’d second that!

4 comments on “Costs of the Nats tax cuts – commentators’ views ”

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  1. Brett Dale 1
    9 October 2008 at 8:57 pm

    Stopping science and research or halting science and research because you have to consult with Cultural or religious groups first, is just plain wrong, but I guess Gordon wont mention that, since he hasn’t mentioned it for nine years

  2. Pascal's bookie 2
    9 October 2008 at 9:03 pm

    I so hope the National party tries to form of Government with the MP. I am absolutely confident that the MP would survive.

    The right would fncking eat itself.

  3. sean 3
    10 October 2008 at 12:05 am

    Its convenient that everyone forgot to mention 9 years with no real productivity gains – Labour had the best chance ever to actually do something and squandered it on bloated bureaucracy and benefits/rebate packages.

    So how is Labour going to improve productivity during a recession if they couldn’t during a boom? Sweet FA chance of that happening isn’t there?

  4. r0b 4
    10 October 2008 at 12:38 am

    Labour had the best chance ever to actually do something and squandered it on bloated bureaucracy and benefits/rebate packages.

    Under Labour the economy has grown faster than under National, and faster than other relevant countries. We have retired huge amounts of debt, and started saving and investing for the future (Cullen Fund, KiwiSaver).

    I can’t believe how backwards thinking the Nats package is. Gut savings and investment, kill of research, chuck it all on the pyre of toys for the rich tax cuts. Unbelievably short sighted.