The Herald is again demonstrating its economic ignorance with its call for spending cuts in today’s editorial:
Something has to give. If National will not postpone tax cuts due in April, it must trim some of the programmes it has inherited. The most costly of them, interest-free student loans, free childcare, KiwiSaver subsidies and the upper reaches of the Working for Families grants, should be means-tested more tightly to avoid taxing people to provide benefits they could pay for themselves.
Don’t you just love the fact the Herald is calling for free childcare to be removed? How do you think they’d feel if the new cry for austerity was met by, say, returning the company tax rate to 33%?
Even putting aside the dodgy class politics of big business calling for mums and dads to pay the price for the recession, the whole idea of meeting a downturn with spending reductions is absurd and when it was tried in the 1990’s it deepened and lengthened our recession.
But it is received neo-liberal dogma. If we do see a reduction in spending, and I think we will (albeit accompanied by spin designed to provide the opposite impression), then the next thing we can expect to hear is that in times of trouble the government should not be exposing taxpayers to the risks of business. And that will be business like banking, healthcare, broadcasting and electricity.
Mark my words.