With a loving smack that would have brought a smile to Bob McCoskrie’s face, the Herald‘s editorial today rebukes John Key in the strongest terms it can.
Now that the Budget is behind us, the National Party has less excuse for indecision on most of the important economic issues facing the country at the coming election. As late as eight days ago finance spokesman Bill English could not answer a question as basic as whether National would keep the top tax tier, 39c in the dollar.
Of course, it’s patently ridiculous to think that the most serious economic problem facing New Zealand is the 39 cent tax bracket (off the top of my head: climate change, peak oil, food miles, low wages, water, the missing generation of trades people from the 1990s when National scrapped apprenticeships, the coming retirement of the boomers and subsequent housing market collapse) but, at least, the Herald is finally challenging Key to get serious about what he would do in government.
It goes on to dismiss the ‘tax cuts don’t lead to revenue cuts because people work harder’ argument as the wishful thinking.
If National promises to abolish the 39c rate, and realign the top personal rate to the company tax rate, it will claim that lower rates will keep high earners in New Zealand and improve their incentives to work, resulting in no loss of tax revenue. Conservative governments have seen their Budgets turn to grief on this belief.
New Zealanders are already among the most employed and longest-working people in the world – tax cuts won’t make them more so. But, being the Herald, the answer it finds is not ‘don’t cut the tax’ it’s ‘cut spending too’
the party will need to stick its neck out on expenditure cuts, too. It is not sufficient to say, as Mr Key did the other day, “National will direct spending away from low-quality programmes that push up inflation towards frontline services like doctors, nurses, teachers and police.” That sort of double-speak fools nobody. We need to hear serious policy soon.
The Herald‘s campaign platform would be less tax on high incomes funded by cutting government spending. That’s a wealth transfer from the poor to the rich, but at least it is a platform. Key is trying to get into government without one, and even his most ardent allies are getting sick of it.
[incidentally, the Herald says our tax system with higher tax in higher brackets is ‘progressive in Labour terms’. It’s progressive in mathematical terms; it’s not a values judgement, it’s a numerical reality]