How the Left won Budget 2010

Written By: - Date published: 10:42 am, May 31st, 2010 - 60 comments
Categories: budget 2010 - Tags:

On the back of last night’s poll that showed the Budget has done nothing for National, I thought a re-examination of the politics of the Budget is in order.

See, we got a whole lot of excited coverage at the time as the journos got swept up in the income tax cuts. Labour, the Tracy Watkins-types of the world pronounced, has been caught flat-footed. It wasn’t the tax cuts for the rich that the Left had been pre-framing the Budget as. Silly Lefties, that dreamie Johnnie beat you again.

Well, that level of analysis is, with respect, what makes Watkins not a very good political commentator. The Left’s positioning of the Budget worked.

Initially, National had wanted to align the top income rate, the trust rate, and the corporate rate on, at most, 30% (options of 27%, even 25% were explored by the Tax Working Group), and there was no talk of lowering the bottom tax bracket. The political parties, the unions, and the blogs had strongly argued that any income tax cuts ought to be directed at lower incomes and giving it all to the rich would be fundamentally unfair.

The Left’s early framing made it politically untenable for the Nats to only give cuts to their rich mates. They were forced to cut the upper rates less than they had hoped and partially compensate the poor for the GST hike but cutting the lower rates more, including the predictable (indeed, predicted) ‘rabbit from a hat’ of larger cuts in the middle rates than had been previously indicated.

So that was about the best outcome on substance that the Left could hope for – forcing National to slightly moderate the Budget. But it was still overwhelmingly a Budget for the rich. As my calculations show, 3 million (90%) of taxpayers got net tax cuts averaging a mere $4 a week. The very rich, the CEOs on million dollar salaries, received massive cuts.

And the Left is winning the politics on that too. Even the usually heavily right-leaning Herald online poll showed that about half of voters thought they would be no better off after the tax swindle. The Colmar Brunton poll shows no post-Budget bounce for National. Instead, the downward trend continues. Why?

Because the Left has successfully proved that the tax swindle takes money from the pockets of working New Zealand and gives it to the rich elite (a fact that fits very nicely with Labour’s emerging vision: ‘for the many, not the few’). Kiwis are not buying National’s spin and the silly excuses about aligning tax rates and supposedly boosting growth, they see a swindle.

And National losing the tax argument is only the start. The Budget is full of public service cuts and dodgy deals like PEDA. National didn’t catch the Left off guard in the Budget. No. They played their only trump and they’re finding it hasn’t worked.

60 comments on “How the Left won Budget 2010 ”

  • Comments are now closed

  1. just saying 1
    31 May 2010 at 11:19 am

    All sorts of people are talking about all those important things the budget pundits failed to inform them of. As someone said on another thread, even people who are usually supremely indifferent to politics. And the cumulative cuts in services, that have been going on almost from the start, are starting to reach a tipping point in the public consciousness too IMO.

    I’ve always felt uncomfortable about ‘the many not the few’. Couldn’t it be ‘the many, not just the few’? The slogan seems to me to be appealing to a tribal rather than a community mentality. Almost a bit of a reaction to “identity politics” to my ear.

    • Bright Red 1.1
      31 May 2010 at 11:23 am

      it’s not identity politics, it’s class politics.

      The problem, if I may be frank, with the liberal wishy washy left is summed up in a person who worries about whether or not to add ‘just’ to ‘the many not the few’. It’s that inability to take a firm stand on anything that saw the Right roll over the liberal left in the 1980s.

      I say f#ck the few, it’s what they want to do to the rest of us.

      • Bright Red 1.1.1
        31 May 2010 at 11:27 am

        I should point out that I’m not espousing illberalism. When I talk of the liberal left I mean the Russell Browns of this world. The weak-willed latte drinkers who are more concerned with identity politics than class politics. They successfully took over the Left in the 1970s and they lost the fight with the Right in the 1980s.

        • I dreamed a dream 1.1.1.1
          31 May 2010 at 11:36 am

          Are the liberal left mainly in the Greens now?

        • pollywog 1.1.1.2
          31 May 2010 at 11:41 am

          I had high hopes for Russell Brown once, but he’s kinda the Paul Holmes or Paul Henry for my generation now.

          They successfully took over the Left in the 1970s and they lost the fight with the Right in the 1980s.

          How did they do it and if so how can the ‘radical’ left reclaim what was lost ?

          • uke 1.1.1.2.1
            31 May 2010 at 11:59 am

            “How did they do it and if so how can the ‘radical’ left reclaim what was lost ?”

            Chris Trotter is continually writing about this (check his blog at Bowalley Road).

            • Lew 1.1.1.2.1.1
              31 May 2010 at 12:01 pm

              Except Chris doesn’t represent the “radical” left in 2010 — he represents the socially conservative eurocentric Marxism of the 1970s and prior. At the time it may have been the “radical” left, but the world’s changed.

              L

              • Bright Red …
                31 May 2010 at 12:09 pm

                yeah, Trotter seems to think the answer is to be illiberal and dog-whistle racism. He’s yesterday’s man/

              • uke …
                31 May 2010 at 12:23 pm

                Yes, I know Chris has a bit reactionary.

                So who are some others who are discussing the issue that Pollywog raised?

                (I’d like to know too.)

              • RedLogix …
                31 May 2010 at 5:18 pm

                Chris Trotter can still write the arse off anyone else around, and more importantly he remembers all the mistakes that have been made along the way, mistakes we forget at our collective peril. Does this mean everything he says is holy writ? Of course not, but derisively dissmissing one of the most experienced voices on the left is just plain dumb.

                And the term ‘yesterday’s man’ is foolish term that most non-Western cultures, who retain some respect for their elders…. would find offensive.

          • Draco T Bastard 1.1.1.2.2
            31 May 2010 at 2:17 pm

            How did they do it and if so how can the ‘radical’ left reclaim what was lost?

            Bryce Edwards has a rather good summation in his Identity politics vs class politics series.

            • pollywog 1.1.1.2.2.1
              31 May 2010 at 4:50 pm

              Cheers for that link DTB.

              Nice that Goff has been pushing his ‘for the many not the few’ line since the 70’s. Dunno that pandering speeches hoping to score the average working class Maori vote is gonna improve Labour’s standing among Maori or his own base though.

              Best to cut his losses and let the nats try and make a foreshore and seabed the Maori party are comfortable lying in, then watch Hone burn the house down around them while he stands by with the water hose

              Then when the time is right, (around election time) hack off a big ol slice of humble pie, swallow some pride, cut a deal with the Maori party and wash it down with some STFU juice on anything racial and if he’s gonna play cards, then play the culture/class card of corporatism vs collectivism.

              In the meantime Goff really needs to work on his wardrobe and image. I could probably help him in that dep’t. 🙂

        • just saying 1.1.1.3
          31 May 2010 at 11:42 am

          Interesting. I really was just throwing it out there to see if anyone else felt uncomfortable about it. Loved the “weak willed latte drinkers” image.
          But actually my unease is more about people on the fringes; the poor the disabled, the unemployed etc. There a lot of disadvantaged minorities that Labour seems to be willing to sacrifice for the votes of ‘the many’.

        • Lew 1.1.1.4
          31 May 2010 at 11:49 am

          Except that by forcibly privileging class over identity politics, the tendency is to take illiberal positions (like the Foreshore and Seabed Act and current campaigns for tangata whenua to give up their own campaigns for their own goals and fall back in lock-step behind the rest of the left).

          Class and identity politics need to cohabit. Neither can function effectively without the other. A socially conservative eurocentric left is almost as bad as a socially conservative eurocentric right, and lacks the support of the genuine conservatives.

          L

      • big bruv 1.1.2
        31 May 2010 at 12:21 pm

        Thank you Bright Red, while I obviously do not agree with your politics (small minded and based on envy) I applaud the fact that you are one who is prepared to tell the truth about how the left see things in NZ.

        I wish a few more of your comrades would be as honest.

    • Lanthanide 1.2
      31 May 2010 at 11:28 am

      It might be more accurate, but it’s not a good slogan.

      captcha: brand

    • Lew 1.3
      31 May 2010 at 11:44 am

      BR is dead right — this is not a slogan of inclusiveness, it’s a slogan of distinction. This makes it a strong one, but also a dangerous one, in that there’s a chance that the “wrong” people could find themselves on the other side of the divide. The strategy requires that some people be pissed off with Labour, and that’s a good thing — you can’t keep the whole electorate happy, and if your ideological enemies don’t hate and fear you, then you’re not doing your job properly.

      Labour’s challenge, in plain economic terms, is to set things up so they have the majority of the electorate both objectively benefitting from their policy programme and realising that they do. In general they’ve had one or the other — most recently, it’s been people benefitting, but not really being aware that they do, or not identifying that advantage with the Labour party responsible for delivering it; or in the ’80s, they didn’t benefit but were persuaded that they did.

      National’s job is ultimately the same — except they have the slight disadvantage of a policy programme which actually doesn’t objectively benefit a majority of the population. However they have the considerable advantages of knowing what the hell they’re doing when it comes to running the politics, and of a strong leadership team whom the public instinctively feels is competent, efficient, positive and trustworthy.

      L

      • just saying 1.3.1
        31 May 2010 at 11:53 am

        There are already many “on the wrong side of the divide” – that’s my point.
        Maybe I wouldn’t hear it in the slogan if I wasn’t seeing it in Labours actions. They are sacrificing the poorest and weakest to to pander to the dog-whistling right.
        The few, on a plate, in return for an unknown number of soft tory votes.

        • Lew 1.3.1.1
          31 May 2010 at 11:58 am

          JS, a few of the many being sacrificed, I guess is what you’re saying. That’s a fair enough comment, but it has ever been thus.

          In 2004-08 it was tangata whenua sacrificed for the middle ground. I think that was a bad call, but not because of the mathematics: in terms of the numbers, it was clearly the right call. But things other than numbers matter, and the FSA and subsequent positions taken by Labour have so severely undermined their relationships and reputation that I don’t think it was worthwhile over the long term.

          L

          • ianmac 1.3.1.1.1
            31 May 2010 at 12:10 pm

            Well Lew. It will certainly be interesting to see the outcome of the revised F&SAct. If it is not really improved then I think that all bets will be off. The MP were formed to remove the Act. (Perhaps they might be caught in the Act.)

          • just saying 1.3.1.1.2
            31 May 2010 at 12:15 pm

            I agree with you the sacrifice of the legitimate interests of the tangata whenua is a perfect example.
            Thing is, I think the tory swing to the right is the perfect opportunity for labour to swing left and still catch the disgruntled middle class.

      • RedLogix 1.3.2
        31 May 2010 at 12:11 pm

        However they have the considerable advantages of knowing what the hell they’re doing when it comes to running the politics, and of a strong leadership team whom the public instinctively feels is competent, efficient, positive and trustworthy.

        Conservatives always have the advantage of being able to point to the status quo as what they want. The ‘do nothing’ option is always in the short-term easier to accomplish, and easier to look competent at… than the left’s fundamental desire to change things for the better.

        Most people are rather risk averse and suspicious of change, for this reason it’s always easy to sell reform if it only imapcts a relative few at the margins. Which is why Prostitition Law reform worked and the S59 Repeal didn’t. Yet liberal identity politics inherently contains this double-edged sword, while it may well deliver real gains for specific groups, it equally it can alienate the majority if they are resentful of their deteriorating position.

        The fact is that real wages have declined 30% over the last 30 years, and the wage share of GDP in this country is an abysmally low 42% and dropping. This hurts the many, regardless of identity. The left could afford to do liberal identity politics while the illusion of prosperity remained and the majority were content with their position, but the last 18 months has ripped this away.

        Unless and until the left talks directly and openly on these fundamental inequality issues, and unless it can convince the many that it has a competent plan to deliver on such a major change…then the majority will prefer the apparently safer option of sticking with what they have.

        • Lanthanide 1.3.2.1
          31 May 2010 at 12:20 pm

          Labour said they’d put the minimum wage up to $15 over two years. That would seem to be directly talking to the fundamental inequality issue, and would give a real shot in the arm of the 42% and flagging wage share.

          Expect to see them campaign on it for the next election, and coupled with National’s tax cuts for the rich/companies and hopeful end of the recession, it’ll be hard for National to defend against it.

          Such a raise to $15 hour equates to an extra $74.25/week for someone on the current minimum.

  2. pollywog 2
    31 May 2010 at 11:25 am

    yeah, but the leftie politicians still took the taxcut as high paid earners and have directly benefitted from the swindle.

    If they dont agree with what the gov’t has done, then don’t accept the payments and claim to be on the side of the many.

    Either redirect their taxcuts into charity and show some leadership/moral backbone or risk being called hypocrites paying token lipservice criticism to the few/rich elites they themselves belong to.

    • Clipbox 2.1
      31 May 2010 at 11:29 am

      Good point…

    • Lew 2.2
      31 May 2010 at 11:50 am

      Not to charity. Into a fighting fund to help win elections. BR did the numbers and reckoned it would be around $200k per year across the Labour and Green parties. Talk about using the master’s tools to dismantle his house …

      L

      • pollywog 2.2.1
        31 May 2010 at 12:09 pm

        I reckon it wont take much money or effort to reinforce what the public are slowly starting to realise Lew, that the John Key they voted for is not the John Key they thought he was.

        and that the Bill English, they voted for is the very same one they rejected in previous elections but who is now currently in charge of the public purse.

        We didnt kick him out the front door so he could wheedle his way in through the back, and likewise for Key. We let him in the front door on good faith, he abused it, so now we need to show him where the back door is and shuffle him towards it.

        captcha : passing (through)

  3. I dreamed a dream 3
    31 May 2010 at 11:39 am

    It feels like a shock victory, but it also feels so good!

  4. ianmac 4
    31 May 2010 at 12:05 pm

    “The many not the few”. Brilliant. That really was a very important phrase.
    For most people I suspect that the finer points of a budget are lost in the busy life etc. So slogans sum up the detail. Think of terms like the Black Budget, Mother of All Budgets, Lets Stop for a Cup of Tea, and how they resonated down the years. “Smile and Wave” (and Duck) sticks. Tuhoe Cheated. Mine the Conservation Land. Not yours. Mine. Transparent Trusts.
    In other words the philosophy has to be summed up with those easily remembered calls.

    • Lanthanide 4.1
      31 May 2010 at 12:16 pm

      “Mine the Conservation Land” could work for a Brash-style billboard:
      National: Mine the Conservation Land
      Labour: Mind the Conservation Land

      • Lew 4.1.1
        31 May 2010 at 12:34 pm

        “Yours” and “Mines” works better, as Labour’s essentially already done. The great virtue of Ansell’s billboards was their brevity.

        L

  5. Mike 5
    31 May 2010 at 12:35 pm

    The Colmar Brunton poll also asked questions directly about the budget itself, whether people will be better off, whether it was fair etc, I imagine the results will be revealed tonight.

  6. felix 6
    31 May 2010 at 12:52 pm

    On the possible interpretations of “the many, not the few”:

    It just doesn’t matter. To the intended audience it is obviously a statement about class/economics. And it’s working.

    Let’s get on with it, shall we?

    • Lew 6.1
      31 May 2010 at 1:10 pm

      Exactly right. It’s a strong slogan because it speaks to the “middle” class or “average” New Zealanders whom are indistinct and numerous. In the US, around 85% of the electorate define themselves as “middle class”, even those who aren’t really.

      In NZ it might not be quite that high, but it’s still a lot, running the gamut from people who earn above minimum wage and have no assets to speak of but don’t usually have trouble making rent each week to those who own the family home freehold and have a few rental properties and holiday homes besides, but only drive a 5-series as opposed to a 7-series BMW.

      This is why the “workers of the world unite” rhetoric of the unreformed Marxists is dead: because, like it or not, most people don’t think of themselves as “workers”, so they don’t consider that exhortation to apply to them (or they’re slightly uneasy about the objective fact that it does). Capitalism has won to this extent, and while it’s a grand goal to roll that back, pretending it hasn’t taken hold is not the path to success.

      L

    • RedLogix 6.2
      31 May 2010 at 1:13 pm

      Just minutes ago I’m told about a third suicide in three months among a group of underclass people I’m in contact with. Each one has it’s own complex story, but equally each one has the same underlying logic…hopelessness.

      (At this point I’ve deleted a noisy, and ultimately pointless rant.)

      A new govt isn’t going to magically stop any of this overnight, but the current one is taking us in completely the wrong direction and each step is killing hope among the voiceless ones at the bottom of the heap.

      We know what the story is, it’s 30 years of a few rich pricks skewing the game, parasitically looting from the common fabric of society and pretending that their theft makes them better than us.

      Call it the politics of anger…

  7. just saying 7
    31 May 2010 at 1:30 pm

    Given the strength of feeling that my comment about ‘the many not the few’ aroused, I’d like to say, for the record, that I am not wringing my hands with worry about the slogan. It doesn’t keep me up at night, and when I first heard it I thought it was a step in the right (left) direction.

    But I can’t help feeling that maybe my unease with it was justified, at least a little bit.

    Maybe I’m taking this out of context but “F#ck the Few” is something I do worry about in the politics of the left, when the “few” are the most disdained and powerless in the community. All the time I’ve listened to the “do-nothing “smile-and wave” theme and wondered who has to be affected for this governments brutal actions to count as “doing something”.

    This is something I do stand firm on Bright Red, and I don’t drink lattes actually.

    • Lew 7.1
      31 May 2010 at 1:37 pm

      I think BR’s (and Labour’s) definition of “the few” is the lionised and the powerful, not the disdained and powerless.

      L

  8. just saying 8
    31 May 2010 at 1:44 pm

    Appealing to ‘F#ck the few’ IS a double edged sword Lew, F#cking the weakest is just the other side of the same coin IMHO, at least as far as the way Labour is acting.
    ‘F#ck the rich pricks’ is the kind of slogan I could get my head around.

    • Lew 8.1
      31 May 2010 at 1:56 pm

      Trouble with that is people want to be rich. Believing themselves to be “middle class” people figure genuine wealth is just beyond reach. The trick is to appeal to their sense of middle-class-ness without crushing those aspirations.

      That comment by Cullen was probably the most damaging thing he said in a long and illustrious political career, and it’s what many people will remember him for despite hundreds of wittier and more insightful utterances. Part of the reason for this was that it actually didn’t ring true: he imposed a tax at a level not far enough above actual middle-class-ness that many people who should have been staunch Labour supporters began to feel his disdain applied to them, rather than to the real fat cats. National exploited this exceptionally well.

      So if Labour goes down the “fuck the rich pricks” path again (which they won’t) it had better set the threshold bloody high — somewhere around a couple of hundred grand — to as to make a very clear delineation. But even so, permanent growth being what it is, eventually a couple hundred grand could be middle-class as well …

      L

      • RedLogix 8.1.1
        31 May 2010 at 2:38 pm

        Trouble with that is people want to be rich. Believing themselves to be “middle class’ people figure genuine wealth is just beyond reach.

        Actually when you ask them what they really want is to be rich in family, friends shared values and a sense of achievement in their lives. A sense that they could leave the world a little better than they found it.

        Money is of only partial, limited relevance to this desire.

        So if Labour goes down the “fuck the rich pricks’ path again (which they won’t) it had better set the threshold bloody high — somewhere around a couple of hundred grand

        What Labour really needs to make clear is that we are all more or less in the same boat together, a pack of colonial peasants being farmed by banks for the profit a very few outsiders.

        • Lew 8.1.1.1
          31 May 2010 at 3:38 pm

          RL, I agree with the first bit — my response lacked nuance. The point remains, though: if you trample peoples’ hopes and dreams of one day becoming rich, they stick their fingers in their ears and go “NYA NYA NYA NYA”, so if you aim to garner their support it’s usually wisest not to do so.

          L

  9. just saying 9
    31 May 2010 at 3:31 pm

    So, sadly, no-one disagrees that Labour’s Us – the ‘many’, pointedly does not include those at the bottom of the heap.

    Most people never see the suffering of the ‘underclass’ first hand, New Zealanders occupy different worlds more than ever before.

    But ‘the many’ had better be bloody careful they don’t slip, because we are in the same boat, and it’s a lot further to fall than it used to be. Few get back up again.

  10. gingercrush 10
    31 May 2010 at 4:13 pm

    This post should go in the stupid pile too.

    The post makes a number of assumptions. Fundamentally, the post makes the assumption that the left won budget 2010 and points to a single political poll as evidence. Secondly, talks about how the left’s positioning forced National to make changes in their budget.

    That’s quite a stretch to make. First its one poll from a polling company that the left are quite happy to bash any time the poll disagrees with them yet is now being taken as gospel. I have no problem with the TVNZ poll but I like to see several polls before coming to any conclusions. And I believe neither opinion FOR or opinion AGAINST the budget was reflected in the poll.I just don’t. The budget was released two weeks ago and the poll is expected to reflect such opinion straight away? Hell no. That will take a few months. Secondly, there are several issues the government is currently facing. Mining, Super City, Christchurch and the regional council, discussion from all sides about the budget but previous to the budget and any other issue that may be important to the people who were polled. Therefore, why make such an assumption. That just makes you one of the dickhead politicial columnists you attacked in the post.

    To provide further evidence you point to online opinion polls. Are you serious? We’re not taking those to provide credibility. Well here’s one:

    Stuff.co.nz online poll.
    Are you happy with the personal tax cuts outlined in this budget?

    54.4 Yes
    11.5 No
    34.2 GST negates tax cuts
    18, 319 votes

    Now I won’t be taking that poll serious but if we’re going to use any poll as evidence. Then there you go Marty G. People are in favour of the budget.

    —

    Do the right have a desire for long term changes to tax? Yes. Do they have want a far bigger flat tax system. Yes. But most on the right understand that can’t happen straight away. Therefore I don’t buy your argument of 27% or 25% etc. Yes its desirable for New Zealand to have that in the future. But that would never happen over one budget. To do so would be absurd. Therefore your argument here fails.

    The left were pushing for no GST rise. Instead we did get a GST rise and not only that but its rather clear Labour realise they won’t be changing GST down to 12.5% when they get back into the government. Therefore, that is a win for National.

    But more importantly, any time there is a focus on tax cuts and even the left are talking about tax cuts. You know National is in a good position. That is why I disagree wholly with your post. The left lost Budget 2010 and its not because of popularity which from where I sit looks mixed. Its not from what the pundits are saying. Its because ultimately in all the screaming and shouting the left were doing and continue doing. National still managed to implement tax cuts to the top earners and have done in where reversing those tax cuts will be more difficult. And even Goff and others are saying the threshold should be lifted to 100, 000. Meaning if and when Labour get back into government they’ve said they’ll make such changes. They’ve lifted the GST rise and its clear cutting that GST is going to be more difficult. But its also a smart move because as more and more people in this country don’t get income taxed that will be someway offset by the changes in GST. That’s important and why a consumption tax is actually good for this country.

    We’re in a situation where the work force is shrinking. That means the government of the day and future will still need to get tax. How best than to do it via GST which everyone pays. Labour are talking about how they would have done bigger tax cuts for middle income earners (and rather noticeable they barely mention low income earners) and the Greens are talking a $10, 000 tax-free threshold.

    In other words the politics of today and politics in 2011 is going to be around tax. Labour are stupid to go down this path. They were stupid to it when in government and they’re stupid now. That’s why when budget day arrived Labour were rather gazumped and took a few days to even come up with coherent arguments. Yet still to this day they’re rather incoherent. Therefore, it is utterly stupid for you and anyone else to talk about the left won this budget when you didn’t. Because the fact we’re all talking tax cuts means the left is less focused on policy issues elsewhere. And on that front National don’t do well.

    —

    Budget 2010 was very successful for National and the centre-right. Tax cuts will be a huge focus in 2011. GST at 15% is here to stay. Even when the left gets back in we’re highly unlikely to see tax cuts be as high as 38% again and even then the threshold is going to go up. National implemented changes to depreciation so less businesses and individuals will get tax back that way. It also successfully sees National doing something about New Zealand’s investment in property without the need for a capital gains or lands tax. Some ways of paying less tax have been removed and there will be less need for trusts etc. All the while the budget has seen smaller increases in government spending (something the right desires) that have on the whole gone unmissed.

    And the left won the Budget 2010. No Marty G the left lost big time.

    • RedLogix 10.1
      31 May 2010 at 4:38 pm

      Therefore I don’t buy your argument of 27% or 25% etc. Yes its desirable for New Zealand to have that in the future.

      Why? NZ already has the second lowest total income taxes in the developed world. The only country lower than us is Mexico.

      On what possible grounds do you believe we should become the lowest? I’m serious, I really wonder why you believe this.

      • gingercrush 10.1.1
        31 May 2010 at 10:37 pm

        Because I believe in a tax system where tax on income should be low while consumption taxes are higher. That way people actively want higher incomes because they will in the end pay less on that tax if we have a flatter tax system. I also believe that if you remove the different tax levels in trusts, company and personal tax you’ll see less people avoiding paying tax. This government hasn’t done enough in that area. Nor have they included a tax-free threshold which I’d also like to see. I’d also like to see no tax on savings or investments under $150, 000. I’m not excited about a capital/lands tax though I do think the current system we have is problematic in this area. I too as most on the right prefer less government spending. As for the ability in this country to set up trusts, LAQCs and all other multiple things. We need major change in that area.

        • RedLogix 10.1.1.1
          31 May 2010 at 11:15 pm

          Well that’s a decent good faith answer worth unpacking a bit.

          Because I believe in a tax system where tax on income should be low while consumption taxes are higher.

          The reason why progressive income taxation is common in most civilised countries stems from several considerations:

          1. The most important is that wealth is not something generated in isolation. All genuinely rich people derive their income not from their own personal sweat or skills, but because a functioning society allows them to leverage ideas, opportunity and risk into disproportionately massive fortunes..fortunes they could never amass as an isolated individual. Therefore their debt to society is proportionately much larger than it is for the rest of us.

          2. By contrast consumption is within an order of magnitude, more or less the same for everyone. We can each only eat, wear and consume just so much …beyond that the money is directed not so much towards consumption…but towards generating more money. Consumption taxes are inherently regressive, in other words they are a larger portion of a poorer person’s expenditure than a wealthy person’s.

          That way people actively want higher incomes because they will in the end pay less on that tax if we have a flatter tax system

          Nah. I just cannot see it. A higher gross income equals a higher after tax income in all cases (setting aside for the moment specific cases where high marginal tax rates might apply.) Countries with much higher total income tax rates (the OECD average is 36%, while ours is barely 22%) seem to have plenty of people who have achieved very high incomes…far more so than is common in NZ.

          I also believe that if you remove the different tax levels in trusts, company and personal tax you’ll see less people avoiding paying tax.

          Again doesn’t seem to apply in most other countries. As has said before, why reward those who cheat on their taxes, by removing the tax? It’s like the referee in a football match giving up on blowing his whistle because one side persisently breaks the rules. No-one would accept that as fair.

          Besides the other obvious response is that while making a huge talking point of just this rather weak argument, the govt quietly went and reduced company tax rates to 28% …still leaving just as much incentive for the same cheating to go on.

          I too as most on the right prefer less government spending.

          Well yes… but again the right is very good at making noises about this, but when in power find the reality of actually governing rather different. The fact is that in order to make any realistic cut in govt expenditure they have to slash at least one of the big four line items, superannuation, health, education and welfare. And three of them are political suicide….which is why the burden of your dreams always lands on those who can least afford to support it.

    • zonk 10.2
      31 May 2010 at 10:02 pm

      Go by a scientifically conducted poll like the one of TVNZ
      most NZers believe they will be worse off after the budget

  11. gingercrush 11
    31 May 2010 at 10:28 pm

    Because the Left has successfully proved that the tax swindle takes money from the pockets of working New Zealand and gives it to the rich elite (a fact that fits very nicely with Labour’s emerging vision: ‘for the many, not the few’). Kiwis are not buying National’s spin and the silly excuses about aligning tax rates and supposedly boosting growth, they see a swindle.

    61% said the budget was good for the economy and 51% against 40% said the budget was fair. 53% also said they did not think the tax cuts would make them better off. Do they see a swindle when more people think the budget was fair than wasn’t fair and clearly they see it boosting growth considering 61% said so.

  12. Jim Nald 12
    1 June 2010 at 7:50 am

    The mark of a successful swindle is it is not detected by the many … not at first.

  13. rainman 13
    1 June 2010 at 1:46 pm

    “For the many, not the few” has been bugging me for a while, and I have figured out why.

    The phrase seems to be Brian Nicolle’s work – p47 of The Hollow Men quotes a fax from Nicolle to Brash, from 25 October 2003, before the leadership vote that installed Brash:
    His ‘Tactical Plans’ included purchasing full-page advertisements in the main cities on the (presumed) day before the vote, headed ‘An Open Letter to all New Zealanders’ and ‘Why I want to be Leader of the National Party’ – subtitled ‘For the Future Not the Past, For the Many Not the Few’.

    Captcha: worries. Indeed.

    It’s a fine sentiment, of course – but of questionable provenance.

  14. David Cunliffe 14
    1 June 2010 at 11:30 pm

    Top job MartyG. Loved the argument and the graphic! DC

Links to post