How would Nats cut tax? Where would the money come from?

Written By: - Date published: 10:54 am, September 16th, 2008 - 22 comments
Categories: election 2008, national, slippery, tax - Tags:

Bill English has confirmed that National still intends to give the average worker a $50 tax cut. That’s $18 a week more than they will get in Labour’s tax cuts after 2011.

If National’s would increase the cut for all taxpayers by around $18 a week it would cost nearly $3 billion a year. In reality, that won’t happen because Key has said there will be no additional tax cuts for low-income workers.

So, what form of tax cut could deliver $18 a week for someone on the average wage of $46,000? Cutting the 33% rate to 29% would do it. The cost would be about $600 million a year, the 1,400,000 million people with incomes below $20,000 would get nothing and the 230,000 people earning $80,000 plus would get $46 more a week. Basically, tax cuts for the rich. Of course, that does nothing about the dreaded 39% tax bracket and you would have the economic purists still in tears about the gap between top income tax rate and the corporate rate but it would cost a billion to bring it down to 33%.

So, where would the money come from for these tax cuts for the rich? Even the cheap option costs $600 million – hardly chicken feed. It’s not going to be funded from cutting waste. Just get the idea out of your head. For all their chirping, National has identified only 1% of the waste that would need to be cut to fund even their cheapest tax cut option. National hasn’t talked about spending cuts anything like $600 million a year; indeed, they have had to guarantee to maintain Labour’s spending in all major areas except education. There’s virtually more cash surpluses either. That only leaves one option… and it becomes clear why National is so desperate to borrow more and sell-off our assets.

[numbers from Treasury]

22 comments on “How would Nats cut tax? Where would the money come from?”

  1. Gustavo Trellis 1

    Maybe treasury made a mistake? You know…again.

  2. The PC Avenger 2

    One thing to keep in mind is that National appears to be driving towards making SOE’s (such as TVNZ) produce a profit. As Gordon Campbell suggests, it’s pretty likely that this is to generate the funds to pay for their tax cuts.

    http://election08.scoop.co.nz/%e2%80%98horse-race%e2%80%99-political-journalism/

  3. insider 3

    More pertinently, where will the money come from for the expected labour promises/bribes, given that the cupboard is apparantly bare and nothing more could possibly be spent that isn’t already being spent. More borrowing is apparantly reckless.

    So that leaves only one option to fund more spending – more tax.

  4. insider. we don’t know the scale of the spending in those promises so we can’t make any serious comment about them. hasn’t stopped you though.

    There is basically no more money in the kitty for the next year, a bit more in the out years but not billions.

  5. kk 6

    Hey, insiders is onto something: “More borrowing is apparently reckless.” – you been following the financial turmoil in the US mate? It’s got Key’s philosophy written all over it

  6. Pascal's bookie 7

    “How would Nats cut tax? Where would the money come from?’

    That’s just an old political battle from the past Steve, that the National Prty doesn’t want to talk about.

  7. NeillR 8

    According to the link to treasury you provided, the top 15% of taxpayers (those who earn over $60k) pay 53% of the income tax. So if there were to be tax cuts it should go to those who actually pay the most – you say that those at the bottom get nothing, but they pay nothing so where’s the problem?

    [“The rich pay more tax so they should get the biggest tax cuts.” non sequitur. SP]

  8. Phil 9

    Interesting…

    Barak Obama claims he will deliver a tax-cut package by going through federal spending line-by-line and cutting unnecessary or wasteful initiatives. The Dem’s cheer loudly, and the Indy’s nod approvingly.

    John Key claims he will deliver a tax-cut package by going through government spending line-by-line and cutting unnecessary or wasteful initiatives. Bloggers at TheStandard gasp in horror, and draw comparisons with cheese.

    What a funny world we live in.

  9. Matthew Pilott 10

    Phil – the two are incomparable. If I were you, I’d just be thankful that we don’t have the US’ excess of pork-barrel spending that Obama is attacking. I can think of an example here – $1bn for home insulation, tacked onto the ETS. Not a real example, because it is relevant to the bill. In the US, you’d get $500m for a Senator’s pet project, like an industrial plant, tacked onto S59 or something equally ridiculous.

  10. Matthew Pilott 11

    NiellR, the top 15% of tax-payers earn what percentage of New Zealand’s income?

    Hint: more than that percentage of tax you quoted.

    Think about that for a sec.

  11. Phil 12

    MP,

    Fair point.

    But, how many voters in NZ are capable of differentiating the two?
    Probably less than you or I think…

  12. Felix 13

    Well Phil, so far in my (not very statistically sound) survey it’s come out at about 2 to 1.

  13. gobsmacked 14

    The big story on tax in the US campaign is Alan Greenspan – a hero to many conservatives, including John Key, who used to be on his team. Greenspan has attacked the McCain tax plan:

    “I’m not in favor of financing tax cuts with borrowed money”.

    It would be interesting to know what John Key thinks of his former mentor’s view.

  14. Stephen 15

    The Rudd government made a similar commitment to cut waste, but it was in the form of something like a ‘all Ministries reduce your budget by 5%’ edict.

  15. Matthew Pilott 16

    Phil – a good comparison would be comparing what, specifically, they’ve identified as waste – I wonder how many grams of mainland cheddar Obama would get for the average US citizen. I wouldn’t be surprised, though, if they are both as vague as each other – that is also something they superficially have in common.

    P.s. ‘fewer’ than you think! Don’t let those billboards corrupt you!

  16. Pascal's bookie 17

    3-1

    Pile on 😉

  17. Well if National really thinks it can make enough fiscal room to cut tax, I suggest it start right now, as a show of good faith to the public of New Zealand, and “less bureaucrat” the Opposition researcher for a senior Nat who spends part of their day, while on the state payroll, digging up dirt on the left, and then blogging under the nom-de-plume “steady eddie”.

    Lest this person be unmasked.

  18. Jasper 19

    Well, if it’s raining on November 8th, National will have a chance to cut funding across all levels.

    If it’s fine, they may not.

    Labour better be praying for fine weather. Their core voters seem to melt in the rain and don’t have cars.

    I wonder if any KFC’s or Maccas in South Auckland will be set up as Polling Booths… certainly be able to kill two birds with one stone there. Get a feed and cast a vote.

  19. insider 20

    MP

    The home insulation fund IMO is classic pork barrelling. Getting taxpayers to fund a pet project that would otherwise not fly and questionable paybacks

  20. Matthew Pilott 21

    I can see your point, but it is in line with what the greens stand for, and isn’t the worst type – it can benefit anyone, not a specific area or group. Since it’s also related to the bill being passed it’s not a clear-cut bribe for support!

    Questionable paybacks? I thought that the argument was very compelling actually, what about it didn’t work for you?

  21. insider. you don’t understand the definition of pork-barrelling.. it’s when a representative gets the Government to fund projects specifically for their electorate that is not logically or ideologically justified but will help them win re-election. If you think the Greens only want to insulate the houses of the poor to get more votes you’ve got a pretty distorted view of humanity and a frankly ignorant view of the Greens… maybe you should get along to a Greens event and meet these people.. then you could really start to consider yourself an insider

Recent Comments

Recent Posts

  • Better protections for students in halls of residence
    The Government is moving swiftly to change the law to improve the welfare and pastoral care of students living in university halls of residence and other tertiary hostels. Cabinet has agreed to several changes, including creating a new mandatory Code of Practice that sets out the duty of pastoral care ...
    BeehiveBy beehive.govt.nz
    4 hours ago
  • New trapping guide for community and expert trappers alike
    The Minister for Conservation Eugenie Sage has launched a new comprehensive trapping guide for community trappers to help them protect our native birds, plants and other wildlife, at Zealandia in Wellington today. ‘A practical guide to trapping’, has been developed by the Department of Conservation (DOC), and was launched during ...
    BeehiveBy beehive.govt.nz
    10 hours ago
  • Widening Access to Contraceptives Welcomed
    Associate Health Minister Julie Anne Genter welcomes PHARMAC’s move to improve access to long-acting reversible contraception (LARCs). PHARMAC has today announced it will fund the full cost of Mirena and Jaydess for anyone seeking long term contraception, lifting previous restrictions on access to Mirena. “I welcome women having greater choices ...
    BeehiveBy beehive.govt.nz
    12 hours ago
  • Major upgrade for Taranaki Base Hospital
    The Government has approved the next stage of a major redevelopment of Taranaki Base Hospital, which will deliver new and improved facilities for patients. Health Minister Dr David Clark has announced details of a $300 million dollar project to build a new East Wing at the New Plymouth hospital. It ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Extra support for rural families
    Extra funding will allow Rural Support Trusts to help farming families, says Minister for Rural Communities and Agriculture Damien O’Connor. “I know that rural families are worried about some of the challenges facing them, including the ongoing uncertainty created by the Mycoplasma bovis outbreak. “Those concerns sit alongside ongoing worries ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Howard Leaque Beekeeper programme graduation
    Thank you for the opportunity to be here to present certificates to the 16 graduates who have completed a beekeeping course delivered by the Howard League.  Let us start by acknowledging Auckland Prison’s Deputy Prison Director Tom Sherlock, and Acting Assistant Regional Commissioner of Corrections Northern Region Scott Walker - ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Finance Minister to attend APEC meetings
    Finance Minister Grant Robertson leaves this weekend to attend the APEC Finance Ministers meeting in Santiago, Chile. Discussions between APEC Finance Ministers at the meeting will include the effects of the current global economic uncertainty, risks for APEC economies and sustainable development of the region. While at APEC Grant Robertson ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Pacific languages are a source of strength, they ground us and build confidence
    The Minister for Pacific Peoples Aupito William Sio says for Pacific people, language can be a source of strength. It can help ground us and give us confidence. When we speak them, our languages provide us with an immediate and intimate access to our identity and our story - and ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Major boost to support disabled people in sport and recreation
    The Coalition Government has announced an action plan to improve the wellbeing of disabled New Zealanders by addressing inequalities in play, active recreation and sport. The initiative includes training to develop a workforce that understands the needs of children and young people with a range of impairments, advocacy for fit ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • More prefab homes to be built as red tape cut
    The construction sector is being freed up to allow more homes to be built more quickly as the Government cuts through some of the red tape of the Building Act.  “Every New Zealander deserves a warm, dry, safe home and old inefficiencies in the Building Act make building slow and ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Further details of Prince of Wales and Duchess of Cornwall visit to New Zealand
    Prime Minister Jacinda Ardern has welcomed further details on the Prince of Wales and Duchess of Cornwall’s visit to New Zealand next month. Their Royal Highnesses will visit New Zealand from 17-23 November – their third joint visit to New Zealand and first in four years. They arrive in Auckland ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • O’Connor in Thailand to push for RCEP deal
    Minister of State for Trade and Export Growth and Minister of Agriculture, Damien O’Connor, heads to Thailand today to attend the final Regional Comprehensive Economic Partnership (RCEP) Ministerial meeting, as negotiations enter their final stages. “The RCEP Agreement would anchor New Zealand in a regional agreement that covers 16 countries, ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Young Pacific people can access earning and learning opportunities in Hawke’s Bay, Otago and South...
    Pacific young people living in the Hawke’s Bay, Southland and Otago regions will have access to support services that have proved successful in helping young people find new earning and learning opportunities. “Tupu Aotearoa is about changing Pacific young peoples’ lives. Our young people are talented, they are smart, they ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Protecting wellbeing – ACC HQSC Trauma Forum
    Introduction As the Minister for ACC I thank you all for the work that you do supporting New Zealanders in their literally most vulnerable moments. From those who hold people’s lives in their hands, to the people who research technique, technology and trends, your work is highly valued. A special ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • NZ economy in good shape – notes prepared for speeches in Christchurch
    Notes prepared for speeches in Christchurch – Wednesday 9 October 2019 Today’s topic, “trends and opportunities for the New Zealand economy,” is certainly one getting a great deal of commentary at the moment. Looking across the media landscape lately you’ll notice we aren’t the only ones having this discussion. There ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • World Mental Health Day a reminder of the importance of mental health work
    Minister of Health Dr David Clark and Associate Minister of Health Peeni Henare say this year’s World Mental Health Day theme is a reminder of why the Government’s work on mental health is so important. “This year the World Federation for Mental Health has made suicide prevention the main theme ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Cultural Ministers Meeting
    Associate Arts, Culture and Heritage Minister Carmel Sepuloni will represent the government at Australia’s Meeting of Cultural Ministers in Adelaide this week. “This year’s meeting is special because New Zealand is expected to become an International Member of the Meeting of Cultural Ministers at this Australian forum,” Carmel Sepuloni said. “The meeting is an opportunity to ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • 608 claims resolved by GCCRS in first year
    The Greater Christchurch Claims Resolution Service has resolved 608 insurance and EQC claims in its first year in operation, Minister Megan Woods has announced. The government service, which celebrates its first birthday today, provides a one stop shop to help Cantabrians still battling to get their homes repaired or rebuilt ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • NZ economy in good shape
    Today’s topic, “trends and opportunities for the New Zealand economy,” is certainly one getting a great deal of commentary at the moment. Looking across the media landscape lately you’ll notice we aren’t the only ones having this discussion. There has been an increasing amount of attention paid to the outlook ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • NZTA to refocus on safety following review
    The Government is acting swiftly to strengthen NZTA’s regulatory role following a review into the Transport Agency, and Ministry of Transport’s performance as its monitor, Transport Minister Phil Twyford said today. An independent review by Martin Jenkins has found NZTA failed to properly regulate the transport sector under the previous ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Joint Cooperation Statement on Climate Change between the Netherlands and New Zealand
    The Netherlands and New Zealand have a long-standing and close relationship based on many shared interests and values. We value the rule of law, our democracies, and multilateralism.  And we value our environment – at home and globally. Right now there are major global challenges in all of these areas – ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Government putting right Holidays Act underpayment in Health
    The Government is putting right a decade’s worth of underpayment to nurses, doctors and other health workers, says Health Minister Dr David Clark.  Initial sampling of District Health Boards payroll records has found that around $550-$650 million is owed to DHB staff to comply with the Holidays Act. It’s expected ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Government accounts show strong economy
    A strong surplus and low debt show the economy is performing well, and means the Government is in a good position to meet the challenges of global economic uncertainty. “The surplus and low levels of debt show the economy is in good shape. This allows the Government to spend more ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Ministers approve application to expand Waihi mine
    New applications from mining company OceanaGold to purchase land in Waihi for new tailings ponds associated with its gold mines have been approved. Minister of Finance Grant Robertson and Associate Minister of Finance David Parker considered the applications under the Overseas Investment Act. Earlier this year, applications from OceanaGold to ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Tuia 250 Voyage flotilla launches with tribute to tangata whenua
    New Zealanders in Tūranganui-a-Kiwa / Poverty Bay will witness Māori, Pākehā and Pacific voyaging traditions come together today as the Tuia 250 Voyage flotilla assembles for the first time, Māori Crown Relations: Te Arawhiti Minister Kelvin Davis says. “Tuia 250 is a national commemoration and an opportunity for honest conversations ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Visit to advance trade agenda with Europe and the Commonwealth
    Minister for Trade and Export Growth David Parker leaves tomorrow for Dubai, London and Berlin for a series of meetings to advance New Zealand’s trade interests.  In Dubai he will visit New Zealand’s Pavilion at Expo 2020 where construction is underway.  There he will meet Minister of State for International Cooperation, Her ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • More cancer drugs confirmed – even more on horizon
    Confirmation that PHARMAC will fund two new cancer drugs is further evidence of the good progress the Government is making to improve the treatment of New Zealand’s leading cause of death, Health Minister David Clark says. From 1 December PHARMAC will fund alectinib (Alecensa) for ALK positive advanced non-small cell ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Boost for women in high performance sport
    An additional $2.7 million has been announced for the Government Strategy for Women and Girls in Sport and Active Recreation on the first anniversary of the strategy’s launch. Sport and Recreation Minister Grant Robertson gave the opening address to the first Sport NZ Women + Girls Summit in Wellington today, ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Parent support to help retain skilled migrants
    As part of its work to ensure businesses can get the skilled workers they need, the Coalition Government is re-opening and re-setting the Parent Category visa programme, Immigration Minister Iain Lees-Galloway says. The move will: support skilled migrants who help fill New Zealand’s skills gaps by providing a pathway for ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Senior NZDF Officer to lead Peacekeeping Mission in the Sinai Peninsula, Egypt
    Minister of Defence Ron Mark has today announced Major General Evan Williams of the New Zealand Defence Force has been selected as the commander of a significant, longstanding peacekeeping mission in the Middle East. In December, Major General Williams takes over as Force Commander for the Multinational Force and Observers ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Nurses star as Govt rebuilds health workforces
    A record number of nurses are now working to deliver health services to New Zealanders as the Government’s increased funding and new initiatives rebuild key workforces start to show results, Health Minister Dr David Clark says. •    1458 more DHB nurses since the Government took office •    106 more midwives ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New agricultural trade envoy appointed
    Farmer and former Nuffield scholar Mel Poulton has been appointed New Zealand’s Special Agricultural Trade Envoy, Minister for Trade and Export Growth, David Parker, and Minister of Agriculture, Damien O’Connor, announced today. The position supports key Government objectives, including raising the value of New Zealand agricultural goods and services. Mel is ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Pacific and Māori voyaging heritage celebrated for Tuia 250
    New Zealand’s Pacific and Māori voyaging heritage is acknowledged and celebrated today as waka of the Tuia 250 voyage flotilla arrive in Tūranga / Gisborne. “Today we celebrate Tangata Whenua, the first people of Aotearoa, and the triumphs of the voyaging tradition that brought our ancestors here from Polynesia 1000 ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Pacific languages are a root from which prosperity will grow
    “Fijian Language Week starts on Sunday and the theme reminds us how important it is that we each have something to anchor ourselves to, something that can help us pause and feel in control in a rapidly changing world,” says Minister for Pacific Peoples Aupito William Sio. “Family, culture, faith, ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • NZ Government establishes innovative, industry-focused Airspace Integration Trials Programme
    The Government is establishing an Airspace Integration Trials Programme to support the safe testing and development of advanced unmanned aircraft and accelerate their integration into the aviation system, Research, Science and Innovation Minister Megan Woods announced today. The Government will work with leading, innovative aviation industry partners to test and ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Safety upgrades and certainty for Ōtaki highway
    Transport Minister Phil Twyford today welcomed the NZ Transport Agency’s decision to fund urgent safety improvements and confirm the designation of the Ōtaki to North of Levin highway. Safety upgrades will be made along 23.4km of the existing state highway, running along SH1 from the end of the Peka Peka ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Playing our part to support refugees in our region and the world
    New Zealand playing its part in Asia-Pacific and globally are behind changes announced today to the Coalition Government’s three year refugee quota policy, Immigration Minister Iain Lees-Galloway says. “We are proud to be a welcoming and inclusive nation committed to supporting some of the world’s most vulnerable people to rebuild ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Supporting thriving inclusive communities
    Creating thriving regions and inclusive local communities is the aim of the Welcoming Communities programme being rolled out across the country, says Immigration Minister Iain Lees-Galloway today. A successful pilot of the scheme ran over the last 2 years led by Immigration New Zealand and involved ten councils across five regions ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Takahē population flying high
    Takahē may be flightless but their population is flying high with the official count reaching 418 after a record breeding season that produced an estimated 65 juveniles, the Minister of Conservation Eugenie Sage announced today. “The population reaching a high of 418 is great news for takahē which were considered ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New Zealand makes further climate commitments
    New Zealand is today taking action to reduce the potent global warming hydrofluorocarbon (HFC) gases, Climate Minister James Shaw and Associate Environment Minister Eugenie Sage announced today. “The global agreement to reduce these potent greenhouse gases is another step in New Zealand’s commitment to reduce global warming. It is estimated ...
    BeehiveBy beehive.govt.nz
    2 weeks ago