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Every time they cut, remember the tax cuts

Written By: - Date published: 8:02 am, March 7th, 2012 - 53 comments
Categories: public services, tax - Tags:

Police numbers are going to be slashed. Diplomats too. And nurses. All up, 2,500 jobs gone so far for $20m saved. And it turns out more than half the government’s new doctors don’t exist. Big public sector strikes may be coming. Every time you read this stuff, remember National’s tax cuts for the rich. The $1.1b for ‘fiscally neutral’ tax cuts last round alone. That’s where the money went.

53 comments on “Every time they cut, remember the tax cuts”

  1. Colonial Viper 1

    Surely if we sell off enough strategic energy assets and borrow enough from foreigners then even more tax cuts for the rich could be afforded. This fits with National’s strategy to always see how much wealth they can pass over to their mates and themselves before they are removed from office.

    • Janice 1.1

      And it doesn’t matter that the deficit is now $473 million more than estimated in the budget as we all now know that was probably just a guess to put a figure in the document.

  2. Peter 2

    Didn’t Judith Colins deny that any cuts would be made to the Police ?

  3. aj 3

    Didn’t Phil Goff predict cuts prior to the election and get slayed for it?

    • Tangled up in blue 3.1

      From memory he was claiming that “all recruitment” was canceled for this year.

      • Kotahi Tane Huna 3.1.1

        Whereas it turns out it’s a “choice” between pay cuts or “natural” attrition. Goff was on the money all along.

      • bbfloyd 3.1.2

        the february intake was cancelled….. meaning at least 50% drop in recruitment for this year alone…. i have a freind who was going to apply, but was told there wasn’t any places due to the intake cancellation…..

        step one, cut recruitment. .. that would have, at the very least, kept up with attrition rates….the net effect is to reduce the number of officers on the force by years end…..

        goff had it nailed…. the news media have been complicit in protecting collins, and more importantly, key, from having to explain yet another backtrack on their grandstanding…..

        • Tangled up in blue 3.1.2.1

          Sorry but cancelling the February intake and cutting recruitment does not equal “all recruitment” for 2012 being cancelled.

          Goff wasn’t far off, but hardly nailed it.

          • Macro 3.1.2.1.1

            Having been the director of recruitment for the senior service, I can assure you that the intake at the beginning of the year is by far the most significant. The others later in the year are merely catch-up for the training failures of the jan/feb intake.
            The down stream effect of this is actually rather worriesome because in years to come a years cohort will be missing.

  4. Company directors get prosecuted for issuing misleading prospectusses.  Our pollies should get prosecuted for issuing misleading campaign policies.

    • Kotahi Tane Huna 4.1

      Seconded. At the very least it would provide a better class of MPs and company directors once all the hollow men were in jail.

    • Lanthanide 4.2

      I’m quite happy with them just being done for a fraudulent budget that booked the sale of assets while continuing to book the dividend stream from them.

      That’s a cut-and-dried example of fraud, whereas weighing up campaign promises is much murkier.

    • Draco T Bastard 4.3

      +3

  5. Jim Nald 5

    Reverse the bloody tax cuts.
    Reverse the GST hike.
    The past 3 years of fiscal policy failures have to be corrected.

  6. Blue 6

    It’s absurd that anyone takes National seriously when it comes to economic policy.

    They accuse Labour of ‘spending sprees’ when they went on a massive spending binge right at the worst possible time. $1.1b for tax cuts that have left a massive hole in government revenue, and another billion on bailing out South Canterbury Finance investors.

    Then they pretend that they are somehow responsible fiscal managers because they are bringing in all this austerity and cuts. Like a drunk pretending to be responsible because they swear never to drink again after going on a massive bender.

    They then pretend they can pay off debt by 2014 despite having no money to do so because they slashed their income with the tax cuts.

    Selling state assets to make up the difference? Oh, wait, the figures were only guesstimates.

    What a pack of clowns. Lucky for them they have an earthquake and a global recession to blame all this on.

    • Jim Nald 6.1

      … oooh … wAiT !*&^% … John Key and Bill English are now about to blame Labour for the past three years of failed policies because Phil Goff did not do a better job at opposing their incompetence

    • Bored 6.2

      Actually Blue we should take the whole National economic policy VERY VERY SERIOUSLY. Let me lay out the fundamental tenets that are wholly consistent with what NACT are doing.

      1. Transfer of wealth to the already wealthy by way of:
      a. Tax cuts for the wealthy
      b. Bail out of investors (the already wealthy e.g. SFC).
      c. Attacking wages and workers rights / conditions.
      d. Sale of state assets to the wealthy to be paid for by dividends that exceed interest rates.
      2. Cutting the state sector in favour of the private sector / placing costs directly on the citizen:
      a. State sector diminution.
      b. Benefit “rationalisation”.
      c. More “part funding” of state supplied services (e.g in health).
      d. Privatisation of state sector functions (e.g ACC).

      I could go on, but all this is OVERT, there is no conspiracy, just a lot of “spin”.

      This is all about taking from those who have less and giving it to those who have more.

  7. just saying 8

    It’s important to keep publicly joining the dots.

    Also, the bikers’ slogan from their protest at ACC levies skyrocketing was concise and effective:

    “Who’s next?”

  8. Mark 9

    Easy to get the impression from you lot that Nats Tax Cuts involve borrowing money to “give” to the “Rich Pricks” rather than reducing the amount everyone pays in Income Tax. Some interesting and enlightening figures are:
    Year ending 2009:
    Income $200k, tax $68540.. that’s a lot of tax
    Income $100k, tax $29540
    Income $91k, tax $26030
    Income $60k, tax $14240
    Income $30k, tax $5420

    Year Ending 2011:
    Income $200k, tax $61235.. still a lot of tax,
    Income $100k, tax $25735 (WFF $1196)
    Income $91k, tax $22540 (WFF $3016)
    Income $60k, tax $11935 (WFF $9308)
    Income $30k, tax $4690  (WFF $14040)
    I have used for WFF 3 kids under 12, 1 parent working 40hrs per week. I am not being sneaky not including WFF for 2009 year, it is harder to get these figures.
    Just saying… 

    • Lanthanide 9.1

      Oh yes, the old saw of “they aren’t *giving* them anything, they’re just taking less away”.

      Boring.

    • framu 9.2

      the nats reduced their income stream – they then had to borrow to cover costs.

      Ergo – theyve have borrowed in order to give a tax cut.

      key words being “in order to” – they didnt borrow and give that exact $$ to people as a tax cut, but they still had to borrow.

      its pretty basic stuff mark

    • KJT 9.3

      You forgot GST petrol taxes and other taxes. Which are strongly regressive as those on lower incomes spend much more of it.
       
      Most of the total tax is paid by those on median to average income.
       
      Half of the wealthiest people in NZ pay no tax!  Source. Tax working group. (Probably sneaked off the internet by now, like a lot of MSD stats).
      And the “rich” use a much greater proportion of resources and benefit the most from our society. So they should pay the most taxes.
      If that makes people leave then we will lose a lot of greedy parasites. Funny they go to Oz though, where there is 45% top tax rates, and CGT.

  9. Yeah /Yeah 10

    I am not quite sure how you came up with the sensationalist line of “Police numbers are going to be slashed” from the following quote on the same news item you linked to.
    “The police commissioner says frontline staff numbers will remain the same. But 3 News understands that when some police leave, they will not be replaced.”

    So the police commissioner says numbers will stay the same. 3 news comes up with an opinion based on what? And somehow out of those 2 you got slashed.

    Just Saying above says join the dots, but I am struggling on this one.

    • Mark 10.1

      @ Yeah/Yeah
      Don’t you get it.. it’s the Nact owned MSM, spreading false reports about Police numbers, to make the Lefties look stupid, and to scare the oldies into buying private security from the RWNJ owned capitalist pig businesses. Sneaky bastards.
      In other news, MUNZ has just thrown their own members on the scrapheap to puff up Pasloe’s ego. 

      • burt 10.1.1

        Mark

        spreading false reports about Police numbers, to make the Lefties look stupid

        National don’t need to do anything to make the lefties look stupid – they do it themselves suggesting we don’t need tax cuts – ever !

        One of the biggest problems in our economy in 2008 was that our tax rates and thresholds were locked in a “punish the rich” sales pitch from 1999. $60K was not rich in 1999 – it was approximately the average household income in 2008 – yet according to some dim-bulbs it was appropriate as the top tax rate.

        Now you can’t have it both ways – call $60K rich and say we never needed the 2008 (labour and National) tax cuts OR claim that Labour tax policies tax high earners more….

        So which is it: We needed to overhaul the tax rates and thresholds to something like Labour proposed for the 2011 election (which would have been tax cuts for a vast majority of people compared to the current settings) OR We should never have cut taxes from 2008 onwards.

        • lprent 10.1.1.1

          Why are you talking about household income in a income tax debate? Income tax is levied on individual incomes.. In households earning $60k in 2008, none of the income would be taxed at the highest tax rate of 39%. You are conflating two separate unrelated stats together to come up with a moron level result that has nothing to do with reality. Clearly you don’t exercise your intelligence to look at the actual position of people poorer than yourself.

          The nett average change for households earning $60k since 2008 has been that the income tax paid by people in the household would have reduced by a little (depending on how the money was earned). That is because little tax reduction was done on income tax bands below $60k. Their incomes would have remained static or reduced even with inflation. Their actual taxes would have gone up significiantly with the increase in GST. They became worse off under National.

          Household incomes might be relevant in a debate about rates. But it displays a absurd level of pig ignorance to use it in a debate about income tax.

          • burt 10.1.1.1.1

            lprent

            Why are you talking about household income in a income tax debate?

            To give context to “rich”…. rather simple I thought.

            In households earning $60k in 2008, none of the income would be taxed at the highest tax rate of 39%.

            That’s right. And in households earning $60,001 there might have been $1 being taxed at 39%… but only if it was via a single earner. This is good stuff you are posting lprent.

            You are conflating two separate unrelated stats together

            No, you are and I’m assume it’s to distract from how ridiculous it was to say $60K was rich in 2008 and how foolish it is to say we didn’t need tax cuts.

            Household incomes might be relevant in a debate about rates. But it displays a absurd level of pig ignorance to use it in a debate about income tax.

            Whatever lprent, I guess I to would be highly embarrassed if I wanted to claim that $60K was rich faced with the reality that’s (as a level of income – not a separate tax entity) it’s rather average.

            I did say lefties make themselves look stupid – this comment from you with your grumpy old man hat on kind of proves me correct.

            • lprent 10.1.1.1.1.1

              In 2008, the average income was something well less than $40k and the median income was even lower. The numbers of individuals on income levels that were above $60k were still quite few, and the only reason that so many households were at or above a $60k level was because most households had more than one earner in the household.

              There is a hell of a step between $40k and $60k for most of the working population in terms of earnings.

              Ummm. Stats seem to be doing something to their site at present – I keep getting pages like this one.

              But a non-authoritive source from 2008 for groups of earners (because their links are broken) was this

              Legislators, Administrators & Managers $57,013
              Professionals $51,376
              Technicians & Associate Professionals $42,869
              Clerks $36,046
              Service & Sales Workers $26,561
              Agriculture & Fisheries Workers $29,474
              Trades Workers $35,173
              Plant & Machine Operators &Assemblers $32,198
              Unskilled Occupations $26,894

              Now I agree that the tax thresholds need to be moved with inflation. But the income inflation post 2000 wasn’t that much. However your contentions about tax are quite simply bullshit for all except a very few people.

              I guess you’re so far in denial that you simply don’t want to see that.

              • burt

                The numbers of individuals on income levels that were above $60k were still quite few

                By Cullen’s own admission against the 2006 income tax year figures it was 12% of working age people. At that time 12% of working age people translated to about 16% of employed people. ( against 2006 figures)

                By 2008 it was arguable circa 20% of employed people paying the top 5% rate as promised in 1999.

                Now I agree that the tax thresholds need to be moved with inflation. But the income inflation post 2000 wasn’t that much.

                The percentage of wage inflation was very variable post 2000. For example the PM’s salary (and senior cabinet members) basically doubled between 1999 & 2008. Increasing circa 9% every year. But sure most people were lucky to get 2%-3% year on year.

                However your contentions about tax are quite simply bullshit for all except a very few people.

                I did some hand dandy calculations on fiscal drag here.

                The key points based on the person earning $37k in 1999 are;

                So their marginal tax rate in 1999 was 19.5%. In 2008 it was 22.1%. The stealth tax increase!

                Today that same earner would be paying $8,310.10 in tax. That is 16.3%

                A fall of 5.8% from where Labour was gouging them.

                Perhaps you would like to refresh yourself on the calculations and the unintended consequences of locking tax rates for 9 years screaming “no tax cuts… no tax cuts…” then get back to me about who’s full of shit.

                BTW lprent, did you miss your cup of coffee this morning ?

                • lprent

                  If you look back to some of my early comment on this site about tax you will find me bemoaning that there wasn’t a threshold movement or small tax reduction at the threshold to reducer eliminate fiscal drag. To be precise that I was pissed off that small tax decreases from the 2005 election were not carried out because of the right wing whining about chewing gum tax changes.

                  The correct way to shift tax rates and thresholds is small changes and frequent. Doing that prevents the market distortions from inflation and political distortions from pentup demand about fiscal drag. Doing it like the 12-15% jump in GST is just an exercise in how to get serious problems with inflation. Doing a massive drop from 39% to just over 30% is a Greta way to create debt. Both are stupid.

          • burt 10.1.1.1.2

            lprent

            I think it’s hilarious that in 2011 Labour’s proposed top tax rate was over twice what it was claiming as valid in 2008 and still pig headed dim-bulbs say we didn’t need the tax cuts….

            Policies of envy make some people tie themselves in knots. To my thinking Labour’s tax plan in 2011 was better than any other either in place or on the table. Imagine how stupid I would have looked saying that Labour tax cuts in 2008 were not required while being a champion for Labour’s 2011 proposals.

            • burt 10.1.1.1.2.1

              I think it’s hilarious that in 2011 Labour’s proposed top tax rate threshold was over twice what it was claiming as valid in 2008

              Sorry… I used the wrong word there…..

              • KJT

                Doubling of food, housing and power prices may have something to do with it. Dipstick!

                • burt

                  KJT

                  Sure, great. And Labour’s proposed tax policy was more gentle with all but about the top 3% of earners than National’s. I have no issues with that. Like I said;

                  To my thinking Labour’s tax plan in 2011 was better than any other either in place or on the table.

                  But KJT, how much longer can we simply claim that tax cuts were not required because the awesome Dr Cullen would have cancelled them in 2008 ?

                  Left hand not knowing what the right hand is doing is required to be that much of a simpleton climbing up your own ass to keep the 1999-2008 live or die dream that tax cuts were never required, are never required and must not happen.

                  Now if Labour in 2011 had promised to re-implement their 1999 settings then sure myopic partisans would have solid ground to pretend tax cuts were never required.

            • lprent 10.1.1.1.2.2

              So? Perhaps you should explain the joke. Of course to do that you’d have to understand the reasons for that threshold being selected.

              I bet you never looked at it.

              Pompous unthinking spinner…. Too full of your own bullshit to actually check anything

              • burt

                lpent

                The joke is… how can it be valid to have a threshold (covers ears and screams top 5%) set at $60 in early 2008 and claim it’s valid to smack people from that level and that tax cuts were not needed – then in 2011 pop out a magical $150K as ‘rich’ while still screaming that tax cuts were not required in 2008 ?

                Did you miss the bit where I said;

                To my thinking Labour’s tax plan in 2011 was better than any other either in place or on the table

                When you blurted “I bet you never looked at it” ?

                • lprent

                  Didn’t Labour lose the election in 2008 largely on the basis of the same ill informed tax blathering that you were displaying this morning? Aren’t politicians in a democracy meant to be responsive to shifts in public opinion?

                  Sounds to me like you are just disappointed that politicians aren’t all as ideologically stupid as the National politicians appear to be.

                  • burt

                    Didn’t Labour lose the election in 2008 largely on the basis of the same ill informed tax blathering that you were displaying this morning?

                    How is it ill informed lprent ?

                    All tax cuts favour the the rich….. it’s a consequence of having a progressive tax system. Absolutely unavoidable in a progressive system. Just like tax increases have a larger effect on the rich. This isn’t opinion lprent – it’s math.

                    • lprent

                      And the rich have more disposable income compared to the poor. Consequently if you raise tax rates the same for both the rich and poor then you are removing a higher proportion of their disposable income (or their requred income) from the poor than from the rich. That is the reason we have progressive tax rates, because it is fairer.

                      This is also math. but of course this isn’t maths. It is people and economics…

                      The value of money isn’t money – it is what goods and services you receive for it. But that basic tenent of economics appears to always escaped you. Perhaps you should examine your flat tax credo in the light of raising the effective tax rate on someone on say $30k living in Auckland.

                    • burt

                      Perhaps you should examine your flat tax credo in the light of raising the effective tax rate on someone on say $30k living in Auckland.

                      Well I kind of did with the fiscal drag calculations. Sure $37K in 1999 isn’t the same as $30K today. But what I did show was that National’s tax rates on that ‘bracket’ were a hell of lot more beneficial than Cullen’s ideologically blind position.

                      But that basic tenent of economics appears to always escaped you.

                      You can say that, but your assertion only makes it as far as personal attacks.

                      There is no foundation for you to say that given the details I have highlighted, the creeping loss of spending power under Labour I highlighted and the substantive increase granted by National’s changes.

                      FFS lprent, you need to look past the fact I’m saying it and just look at what I’m saying.

          • Mark 10.1.1.1.3

            lprent
            I thought household income and  tax is very relevant to a debate about income tax.
            You make an assumption about who is poorer than me..  interesting.
            My point in this and other posts on this blog is use a few facts and tips to show that “poverty (driven of course by ruthless and cruel RWNJ’s)” is unnecessary in NZ, and the shrilling and tactics of the Left regarding this are nothing but discredited and dangerous Political Theory designed to oppress the unfortunate for political and economic gain.
            I have been very open about my situation & credentials  to debate this, unlike most here. The Left see choose to see conspiracies behind solutions, and prefer a “tax the rich” (more) rather than to encourage everyone to improve their lot, using the many incentives and opportunities available to all.
            But I guess it will be easier to have that “class war” when you are hell bent on growing the underclass 

            • lprent 10.1.1.1.3.1

              🙂

              I was replying to burt. That is why it was 10.1.1.1 replying to 10.1.1 which was burt replying to you at 10.1.

              You didn’t even mention household incomes, and now I look at it I’d have to ask why burt did his usual bull about tax rates in response to your comment?

              • burt

                In a thread with a title ‘… remember the tax cuts’ somebody mentions rates…. OMG – how off topic !

  10. Treetop 11

    Marshall needs to come out and say that there is going to be a wage freeze in the police. I’m sure he can remember the wage freeze under Muldoon in the early 1980s.

    I suspect the figures for inflation are not correct either.

    I think a wage freeze increases inflation, but the cost of power will rise if the strategic power assets are sold off?

    The poll I want to see is on this question: Would you rather have a wage freeze or have the government go ahead with selling off strategic power assets?

    The only solution English has to balancing his shonky figures is to borrow for this governments erratic fiscal management.

  11. We went through all this in the 1990s…

    * two tax cuts

    * slashing social services

    * privatisation/”competition”: http://fmacskasy.wordpress.com/2012/03/04/history-lesson-tahi/

    Note Max Bradford’s response.

    * cutting police resourcing: http://fmacskasy.wordpress.com/2012/03/07/history-lesson-ru-police/

    In fact, the media reports from 1997-99 seem to be almostr word-for-word what we’re seeing now. This isn’t just history repeating, it’s a carbon-copy.

    History’s full circle will be complete when National is voted out in 2014 (if not earlier) and Labour resinstates the state sector.

    • Mark 12.1

      Yeah, and we’ll be “gliding on” again.. 

      • Or, Mark, you might get a real person answering the phone when you call a hospital, school, IRD, police, etc, etc…

        And if you get into a spot of bother overseas, you might get a real kiwi diplomat coming to your assistance.

  12. Mark 13

    You might get a “real” person on the phone, experience has shown that you will probably get someone whose job is guaranteed, whatever their performance, skill or attitude. You probably won’t get someone who is dynamic, organised and resourceful.. the PSA would have held them back. I would rather have the excellent automated systems that cost less and are more effective thanks.

    If I get in a spot of bother overseas I would love a real Kiwi Diplomat, rather than a trougher who is there only because of time-served seniority and the desire to enrich himself on the back of Kiwi taxpayers. 

    • “You probably won’t get someone who is dynamic, organised and resourceful.. the PSA would have held them back.”

      Or, “You’ll probably get someone who is dynamic, organised and resourceful.and the PSA would be quite happy.”

      Yup. Definitly sounds more positive. Less union bashing for bashing-sake.

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