Written By:
Marty G - Date published:
4:02 pm, May 23rd, 2010 - 52 comments
Categories: bill english, budget 2010 -
Tags: guyon espiner
The frustration was palpable today as Guyon Espiner struggled in vain to get a single straight answer from Bill English, who was only prepared to twist, evade, and repeat lines:
GUYON Do you accept that for very high income earners, people on the sort of salary like your own of $276,000 a year, do you accept that giving those people taxcuts of $239 a week, you gave those people money they simply did not need?
ENGLISH Well look people on those incomes will be paying more GST, there’s various loopholes that have been shut down and the higher income groups tend to carry the burden of the extension of property taxes. But look we can’t run the whole economy on a very small number of earners on quite high incomes. The big shift here is giving us the result that about three quarters of New Zealand earners now have a marginal tax rate of 17½%, so if they work another hour of overtime, they put another dollar into KiwiSaver, that’s now taxed at 17½%. So we’re aiming at incentives right across the economy. We believe we have achieved a good balance of fairness between people lower and higher on the income scale, but in the long run it’s about lifting the economic growth so they can all get ahead, not just about the one off cash on the day.
So, English thinks it’s ‘fair’ to take tax off himself and put it on ordinary Kiwi families.
GUYON But you could have addressed that issue though, you could have lifted thresholds to where that top rate cuts in, left the top rate there and actually moved the threshold out further, and that way you wouldn’t have given those hundreds of dollars a week to people who already have very high incomes.
ENGLISH Well that would depend on how they structured their affairs. I mean one of the problems of the last ten years has been a top tax rate out of line with trust and company rates, that’s allowed for a lot of restructuring. Inland Revenue tell us that among their wealthiest taxpayers only half of them actually pay the current top tax rate, which remember cuts in at $70,000. So there’s people with millions of dollars of assets who aren’t even paying 38 cents on income over $70,000. So look there may have been some kind of symbolism in it but we don’t believe…
Um, the rates aren’t aligned now, Bill. In fact, when the company rate drops to 28%, the gap will be as wide as ever. And if half of the richest Kiwis no paying the top rate is the problem how is making none of them pay it the solution?
GUYON So what have you done to actually clamp down on someone like that. I know that the investment property has been looked at, but that affects a lot of ordinary Kiwis as well. What about someone like Sam Morgan, what is there to stop someone like that no paying much tax at all?
ENGLISH Well I have no idea about Mr Morgan’s circumstances and I’m not an expert on tax structure, but what I can tell you is that as a result of the changes we’ve made, for instance, there is not much point in channelling all your income through trusts to avoid the top personal tax rate, because now those rates are the same. And people like Mr Morgan will now be able to focus on how they’re using that investment to grow the economy and create new jobs, and not so much energy on structuring their affairs so they don’t pay the top tax rate.
A finance minister, who has just made the biggest tax reforms in 25 years says he doesn’t understand tax structures.
GUYON Sure you’ve aligned the top rate and the trust rate, but that’s in some ways rewarding tax avoidance with a tax cut, or as someone put it this week, it’s a bit like tackling doping at the Olympics by ensuring everyone takes drugs.
ENGLISH Well it isn’t, because it’s part of a package that is about improving the incentives right across the board. I mean let’s look at what’s happened for someone who’s earning around say $48,000 just under the average wage. Their marginal tax rate has now halved. So whatever’s happened with Mr Morgan, tens of thousands of New Zealanders are now in a position where two or three years ago they were paying 33 cents in the dollar, now they’re paying 17½ cents in the dollar, and we happen to think that the incentives for those Kiwis, which is the vast majority, are more important in the economy than a handful of people at the top end.
More dishonesty. A person on $48,000 was never paying the 33%, it only applies to earning above $48,000. And the majority of taxpayers have incomes below $30,000.
GUYON What impact Mr English does this budget have on the gap between rich and poor, does it increase it, does it decrease it, or does it stay about the same?
ENGLISH Oh it’s about the same, given the shortcomings of the various measures…
GUYON So it’s important to you, but you haven’t done anything about it, with respect. That’s what you’ve told me, you’ve told me that it’s important to you, but you haven’t done anything about addressing that in this budget.
ENGLISH No, what we’ve done is we’ve achieved a shift in our tax system without making that problem significantly worse in a static sense.
Oh dear, ‘not made it significantly worse’, that’s the limits of National’s ambition for creating a more equal society.
GUYON Okay what about one of the other areas that, for people with small children, could erode some of these gains. You’re taking 400 million dollars out of the early childhood education sector, could you not in 70 billion dollars worth of government spending, find a better area than small children to actually take money from?
ENGLISH No we’re not taking 400 million dollars out of the early childhood education sector. What we’re dealing with there is a sector where for roughly the same number of children, expenditure has gone up 300% in five years from 400 million to 1.2 billion. When we came into this budget, it was going to go up another 200 million dollars of roughly the same number of children and same number of centres. So what we’ve done is, the increase is still 107 million, so it’s going from 1.2 billion to 1.3 billion, we’re not taking money out.
GUYON Okay so parents Mr English will not have to pay more? Because the fear is, and I want to get a straight answer on this, the fear that we’ve heard in the days after the Budget is that parents might have to pay between $20 and $30 a week more. Are you telling this morning that parents won’t have to pay any more money as a result of the changes you’ve made to this sector?
ENGLISH There’ll be some changes in the subsidy regime and it depends on how early childhood centres whether they pass it on.
GUYON Yeah but you must have done the research Minister and figured out whether you thought that they would need to pass it on. What is your estimate of the increased costs if any, for the average parent under the scenario? You must have looked at that before you took this money out.
ENGLISH Well I wouldn’t put an estimate on it, what you can say is that the early childhood centres have got three times as much government money now as five years ago, it’s my personal view they’re unlikely to have to pass it on.
So, English has gutted early childhood education and not done any research on the effects but confidently predicts everything will be OK.
GUYON Can I look at the economic impact of this budget now. Treasury estimates, the Budget document itself, says that economic growth will have an additional nearly 1% over seven years as a result of this tax package. I mean that’s hardly transformational growth is it?
ENGLISH Well it’s a pretty conservative estimate, the IMF have put out some recent work that shows that you might get about 1% lift in the level of GDP over four or five years, so a bit sooner. I think what’s important here is that there aren’t too many there aren’t any other mechanisms actually, certainly no policies that have been put in front of me as a finance spokesman for a long time, that would lift growth by that much. That is actually quite a big impact, that’s tens of thousands of extra jobs.
This is pixie at the bottom of the garden stuff. Treasury says the tax changes may produce an undetectable amount of extra growth (maybe enough to eventually reverse the added concentration of wealth in the wealthy that the Budget has created) English blithely assumes it will be better.
GUYON Okay well let’s talk about the future in the last few minutes that we’ve got in this interview, because I know you’ve ruled out asset sales in this term. You said that in the election campaign, you’ve said you won’t break your word on that, but what you did do on Friday was float the idea of partial floats for state companies such as KiwiBank. That’s a message that you’ve been saying for a number of years now, so presumably you favour the policy of floating some partial stakes in our state owned companies?
ENGLISH Well look it’s an option that may or may not work, actually the government hasn’t done any work on that.
It won’t work because it never has worked.
GUYON Do you favour it though Mr English, do you favour it? Because you’ve said it a number of times. Have you changed your mind, or do you still believe that we should give New Zealand investors some stake in those state companies by floating them on th4e sharemarket?
ENGLISH Well look as I said the government hasn’t done any work on that. What we’ve been focusing on is managing the 200 billion dollars of assets that the government owns, and as I pointed out in the Budget, they’re going to grow by 35 billion over the next four years, the government is investing about six billion a years, our focus has been on doing a better job of managing that 200 billion of assets.
GUYON Yes but you floated that idea on Friday. I mean you’re an intelligent and considered man, you wouldn’t have done that for no reason. You floated that idea, do you believe in it? That’s what I’m asking, a straight simple question. Do you believe in it?
ENGLISH Well it’s not a matter of whether you believe in it, that was a bit of speculation, the government hasn’t done the work.
We’ve been here with National before. Throw out an idea, deny all, try to soften up the public with increased mentions of the idea, set up a hand-picked taskforce to investigate and supply the answers they want.
GUYON Well it was your own speculation though Minister, it was your own speculation. You said if I went out into the market, I’d have a lot of people who are keen on this idea, you said KiwiBank needs capitalisation, needs money, a good place to find that is from Kiwi mums and dads. I’m asking this morning whether you agree with yourself.
ENGLISH Look the government simply hasn’t done the work, certainly hasn’t done the work on that proposition. I get asked all the time by people when or if they’re going to have good opportunities to invest somewhere, anywhere, because finance companies have been in trouble, they’re not sure about the sharemarket, they see the housing market now going sideways, it doesn’t look quite the sure bet that it used to. And actually the more important issue there is getting financial market regulations sorted out, so that as the economy recovers people have the confidence to get back into investment, so we don’t have all this cash sitting in the bank when it could be creating jobs.
I can’t believe that the Minister of Finance thinks savings just ‘sit in the bank’. Doesn’t he understand that the banks lend it out to businesses and home buyers? It appears not, which is pretty concerning to put it mildly.
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Guyon’s attempts to get Bill-ya-later English to talk straight were worth watching if just to cheer Guyon on and to watch English squirm. Top marks Guyon. Bill, you are a dishonest man.
Look at the frustration and disappointment etched all over Guyon’s face and the quiet smile of satisfaction on Bill’s face at the end of the interview that was more about Guyon than the best budget in living memory that gave tax cuts to ALL taxpayers. The winner on points is clearly in the BLUE corner.
Bill? Is that you?
Guyon is slowing waking up to the fact he has been duped. That maybe Blinglish and “Smile and Wave” are not quite the good guys, the “straight talkers” of their propaganda… and that maybe he played a part in getting them elected.
Usually Guyon is a lot softer than this, it’s a nice change. Hope this comes across more in his reporting as well.
Of course he doesn’t think savings just sit in the bank – he just thinks you think that.
p.s. video here: http://tvnz.co.nz/q-and-a-news/q-guyon-espiner-interviews-bill-english-3564398/video
That was going to be my reply too. He’s not stupid.
Please remind me again, what was in the secret tapes from the Nat conference? No wonder they were so annoyed when they surfaced, they were the most honest thing said at that conference.
Just hope that Guyon has the balls to do exactly the same to Key
He is like Keys little dog most of the time’
But yes today a journo had the balls to actually ask some tough questions and go hard
Could be hope then
Attack, Labour! Attack!
More solid proof that National has absolutely NFI how the economy works.
So, the fact that we are coming roaring out of the recession, unemployment has dropped and deficit predictions have been slashed can be attributed to what then? If not National, what has caused it?
Certainly not the Labour party – their plan was to spend our way out of the recession, and look where that has gotten other economies?
“Better But Fragile – The outlook for the financial system has improved over recent months, reflecting a recovery in the New Zealand economy driven by stronger trading partner activity and a sharp lift in the terms of trade, Reserve Bank Governor Alan Bollard said when releasing the Bank’s May 2010 Financial Stability Report. RBNZ”
So – yes – brilliant work by National.
Given that National has done absolutely nothing to stimulate the economy how could your ‘roaring out of recession’ be attributed to anything they have done? How do you know that the economy might not have done much better under Labour’s policies?
The only possible effect you can claim is that National has kept public debt to a slightly lower level than Labour might have. But with public debt still much less than 25% of GDP it’s not the item of concern Indeed over the last 18 months or so, the difference between National’s do nothing policy and a more stimulatory Labour one would have added only a few percentage points at most to Public Debt to GDP . This difference is trivial compared to the 110% of GDP worth of private debt this country owes.
It was only the fact that Dr Cullen got public debt down so low BEFORE we hit the GFC that the markets have been content to tolerate our excessive private debt.
Besides much of what is being touted as recovery is an anemic, fragile rebound off a very low base.
The slight recovery at present looks as fragile as hell. The recession looks like it is still running to me. The tax and other changes by the NACTs appear to be impeding recovery more than it is helping – indeed it is hard to even see what the NACTs have done towards decreasing unemployment. Compare our ‘recovery’ with the aussies for instance.
In fact I suspect that if I had a look at the export stats, that almost all of the recovery is due to exports to Aussie where they have been running an active government campaign to ameliorate the effects of the recession.
The treasury forecasts were conservative to the point of worst case, just as they have been for the last decade. That was why Cullen kept getting bigger surpluses than expected. So now you have the NACTs and their idiot supporters who criticized this tendency for so long crowing as if they had something to do with it – how unexpected (and pathetic).
Frankly you look like a bit of an economic moron..
Bill English is totally inept in his portfolio,again. He is mismanaging the economy,again. He’s a robot with a Crosby-Textor sound-bites tape up his arse.
“I am asking if you agree with yourself” – Hahahahahahahahahaha. And he couldn’t even say yes.
I think Guyon pulled his punches. It was all too easy. Bungler Bill hadn’t expected anything other than fawning adoration such as he’d been treated with since the reading of the Budget.
Isn’t Fisiani hilarious!!!
Hey Fizzy! Down here in the South, they call Bill ‘the slack-jawed local’.
“A finance minister, who has just made the biggest tax reforms in 25 years says he doesn’t understand tax structures.”
More specious editorials from Marty. He didn’t say he “doesn’t understand tax structures”, he said he’s not an expert. That doesn’t mean, next to the lay person, that you wouldn’t call him an expert. Just next to a real tax expert (you know, someone who’s spent 25 years in the area) he wouldn’t call himself an expert.
“More dishonesty. A person on $48,000 was never paying the 33%, it only applies to earning above $48,000. And the majority of taxpayers have incomes below $30,000.”
No, he is exactly correct. In 2007, the 33% rate was paid for all income in the $38,000 to $60,000 bracket.
captcha: strict
anyone reforming tax structures ought to be an expert in those structures..
maybe I should have written ‘prior to these tax cuts’ but ‘never’ is obviously just a figure of speech, 30 years ago someone on 48.000 was paying 66%
Ok, so maybe you think he should be an expert, but that’s not what you wrote. You should be more careful with what you say, as it’s the sort of thing that RWNJs like to pounce on and make a big distraction over so they don’t have to address your real points.
Also you like to skewer the mainstream journalists a lot, and while of course your work is generally of much higher quality than their’s, you should still be careful in your work, especially if you want to engage those who have doubts about National and are looking for another perspective on things.
I personally thought this was an insightful Q+A in that there are pretty clear parallels between the plague of leaky homes caused by National 20 years ago and the consequences we’ll feel as a nation because of National’s cuts to Early Childhood Education.
By gutting Early Childhood Education National is creating the circumstances that will be felt and paid for in the future. It doesn’t seem like much to reduce ECE funding now because the effects aren’t immediately seen but the results of having fewer registered teachers in centres will be felt when kids are less prepared for school and the success rates drop. They’ve essentially lowered the standards on our children’s future just like they lowered the standards for the strength of our homes a generation ago. It’s a line of attack that I’d encourage Labour to take up.
Also, English repeatedly said how the cost of Early Childhood had increased 5 times in the past 10 years. That’s because there was woefully little money going in to ECE so multiplying a small amount can still equal a small amount. We’ve done a wonderful thing by professionalizing the the Early Childhood industry that in the long run would lower crime and have better students when they enter school but National is happy to create a leaky system that leaves our children out in the cold.
English doesn’t give an F and Espiner’s a lightweight…….a decent political journo would’ve cut blinglish to shreds but we don’t possess them anymore. Holmes is so far past his use by date yet this is the best TVNZ can do……this is one SOE I’d bee happy to see sold off.
Look the competent professional sector in NZ, the good doctors, dentists, specialists, architects, accountants, enginneers, IT experts, tradesman electricians, plumbers are getting nothing like enough. The tax cut should have reduced the high level to 28%. Salaries for the professional sector need to be far higher. The taxes go to support a bloated health and social work sector that often does more harm than good and just intereferes and destroys the life of the poor. The work of Bagshaws and Bradfords needed to be erased and that of the Mintos and Brights stopped. To appeal llike to the good competent beautiful people who want to party and are into life and not social control of their neighbour we have to kick the doors open and the controlss down. The whole Goff, clark, Cullen programme was a criminal desire to maintain an doutdated and undesirable social cohesion. Family support and working for the families just encourge uninteligent working class people and proles to work, marry, have families and breed. Causing shocking missery bitterness and resentment all round. They should have spent there life partying and having multiple partners. And the pits of all, Margaret Wilson who said we will never reach the stage like America where people go out alone to drink and seek partners. I’d like to tell Margaret what she could do with that artificial leg.
There should be some used, cast-off artificials that can be generously stuffed into your many orifices.
At least, even though rejects, they would in their retirement now serve a more useful function than education has served you.
captcha: walk (!)
RobertM – more satire on The Standard but please learn to use the spellcheck
You sound like a Right-Wing fanatic, Like the rest of your ilk you seem to think working class people are stupid . May I remind of a quote by the late but great Nye Bevan ,he said that “if all the working class left the country the rich would starve , But if all the rich left life would still go regardlesl”
Personally have read your insulting comments I wonder who you are . The disgusting personal insult to Margaret Wilson puts you among the contemptibly.The couragious Margaret Wilson overcame unbeliviable pain but still became a Lawyer of distinction plus the Speaker of the House . An example to all. Your insulting remarks tell just what a creep you are
Robert.
It’s late on a Sunday night, maybe you’re a little drunk and in my experience that doesn’t mix well with blogging at all.
Look the competent professional sector in NZ, the good doctors, dentists, specialists, architects, accountants, enginners, IT experts, tradesman electricians, plumbers are getting nothing like enough.
Occur to you that perhaps they aren’t being paid enough?
The tax cut should have reduced the high level to 28%.
NZ already has the second lowest total income taxes in the OECD. Since this graph was produced we have apparently slipped below even Sth Korea. Contrary to the lies you have been fed by the right-wing propaganda machine, NZ is in fact a very low tax country.
All other civilised nations have higher income taxes than us.
The rest of the comment fades off into incoherent dreck that I’m afraid you might be embarrassed by in the morning. If you are lucky one of the moderators might take pity on you.
That’s funny, I read about as far as you did, and then lost interest in what he was blabbing about.
Hint to Robert: use paragraphs.
And most of them are doing than us. Wonder what the correlation is….
Double dip-shit English, As a top tax bracket sort of person, I am keeping my passports current and thinking fuckit! I can happily live in Europe. But I am not sure my son is going to want to live here.
Schrodigerscat sums it up, we’re going to see the same impact the last 2 nat govt’s had in so far as those not getting a fair deal will pull up stumps and depart.
Todays generation are much better informed as they don’t trust the msm (who can blame them) and now that the nat’s sheep suit is gone to reveal the wolf beneath this is a classic ‘screw the lower/middle….reward the already well off’ nat gov’t which will yield the same outcomes muldoon’s and shipley/bolgers did……….can’t say I’m surprised as that’s all they know….there never was a plan B.
“A finance minister, who has just made the biggest tax reforms in 25 years says he doesn’t understand tax structures”
But he does understand the structures surrounding Minister’s housing allowances. We should give the Rorter-in-Chief credit for that, surely.
No, aj, he didn’t understand the structures surrounding Minister’s housing allowances either. According to the Auditor General, English sought advice on that (which proved to be wrong) and then claimed an allowance he was not entitled to receive.
Toad
Fancy a Green bringing up the subject of Housing allowances, have you forgotten the way two of your unelected MP’s ripped off the tax payer?
Has Guyon gone soft? Has he had a Damascene moment and sworn off his fawning adoration of all things National? Is this an insurance job, having a “balanced reporting moment” for the sake of future employment prospects? Did Guyon discover honesty? I smell a rat. There is something rotten in the state of Denmark……..
How much is Guyon’s apparent change of heart due to the producer of the show?
The plot sickens….what is known about the producer?
Qu & A producer is Tim Watkin who, IMO, tends to lean a little to the left:
http://www.pundit.co.nz/users/tim-watkin
http://tvnz.co.nz/q-and-a-news/heatley-question-3383236
Shades of pink maybe, poor Guyon, losing the power of manoevre…such a shame.
I don’t perceive Watkin to be highly radical, but I would imagine he subscribes to the public service ethos of asking some hard & critical questions of people being interviewed.
I am amazed that we are paying this guy 250k or whatever and he’s restructured the nations tax system and he now says he’s not an expert in it.
Me too, I would accept the $250K plus and do a much better job. Expertise is over rated, it tends to be self serving. Common sense and gut reaction, now thats what is needed. Double Dipton has neither.
“Qu & A producer is Tim Watkin who, IMO, tends to lean a little to the left:”
That’s my understanding too. In the recent past there has been a notable contrast between the treatment of both Phil Goff and John Key on that programme. One is fawned over, while the other is rarely allowed to finish his sentences. Indeed, I would go further than that and say he is often not allowed to start them! No prizes for guessing which is which.
I contemplated laying a complaint but maybe – just maybe – there has been enough of them to warrant a dressing down of both Holmes and Espinor by the producer?
Well my opinion is that that the programme is a vehicle for Tory propaganda for the political Right. As Holmes he’s a joke . His gibering at the start of the programme is like a Punch and Judy , As a LP activist I have to watch it ,but its becoming more painful each week. Where have al the Brian Edwards and Katherine Argyles gone?
I wonder how many ,who were watching this progamme noticed the sheer hate in English’s face . I think that the way his face changed when asked a tough question said it all.His face said it all ie ” I will do it my way regardless”
He’s a dangerous man and one determined to crunch the working class.
I wonder how he will deal with the unions ? I hate to think.
“I’m not an expert on tax structure” – I can’t believe he actually said that! How do you feel you can pick up your large salary and set the nation’s tax structure and say that?
Mind you Guyon was lucky to get an interview – it seems to be a regular refrain on RadioNZ of “we asked the minister to comment, but he/she refused the request.” Personally I like a bit of accountability from my democratically elected representatives – continually refusing to front up is not acceptable. It’s also unusual for a first term government – do they not feel able to justify their actions?
To red, pink and lazy susan I was no more intoxicated than when I conducted the media programme for F-16s and rail privatisation in the l990s. NZ may have comparatively low tax rates but the pay rates and sophisticated lifestyle options in NZ and Auckland are limited. Auckland definitely isn’t a 24 hour 7 day society. Margaret Wilson and Helen Clarks decision to surrender to the collectivism of ordinary NZ men, rural men and the police is what holds NZ back. We will never be a free happy society for intelligent and beautiful people unless we accept individualism and allow people to go out alone, drink and seek company. I mean to offend margaret wilson she is a tough embittered class warrior and in some ways I am on the other side.
Margaret Wilson and Helen Clarks decision to surrender to the collectivism of ordinary NZ men, rural men and the police is what holds NZ back.
What does this mean? I can’t make any sense of it.
If Espiner is the best that TV has it’s no wonder that politicians like English get away with the sort of ‘tripe’ that masqerades as answers. All he had to do was ask English where is the evidence that tax cuts for the rich creates growth for the economy. Pretty simple really.
The interview was a politician’s dream; English spoke heaps – and said nothing. It was the most skillful evasion of answering a question since Kim Hill asked Winston Peters what he had for breakfast (a double scotch and two ciggies).
I wonder what National supporters think of one of their ministers who can’t give a straight answer to a straight question…
By the way, Marty G; thanks for the transcript of the interview. It’ll be quite useful…