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

  • Middle East, Africa deployments extended
    The Government has approved two-year extensions for four New Zealand Defence Force deployments to the Middle East and Africa, Defence Minister Judith Collins and Foreign Minister Winston Peters announced today. “These deployments are long-standing New Zealand commitments, which reflect our ongoing interest in promoting peace and stability, and making active ...
    BeehiveBy beehive.govt.nz
    5 hours ago
  • Climate Change Commission Chair to retire
    The Climate Change Commission Chair, Dr Rod Carr, has confirmed his plans to retire at the end of his term later this year, Climate Change Minister Simon Watts says. “Prior to the election, Dr Carr advised me he would be retiring when his term concluded. Dr Rod Carr has led ...
    BeehiveBy beehive.govt.nz
    6 hours ago
  • Inaugural Board of Integrity Sport & Recreation Commission announced
    Nine highly respected experts have been appointed to the inaugural board of the new Integrity Sport and Recreation Commission, Sport & Recreation Minister Chris Bishop says. “The Integrity Sport and Recreation Commission is a new independent Crown entity which was established under the Integrity Sport and Recreation Act last year, ...
    BeehiveBy beehive.govt.nz
    8 hours ago
  • A balanced Foreign Affairs budget
    Foreign Minister Winston Peters confirmed today that Vote Foreign Affairs in Budget 2024 will balance two crucial priorities of the Coalition Government.    While Budget 2024 reflects the constrained fiscal environment, the Government also recognises the critical role MFAT plays in keeping New Zealanders safe and prosperous.    “Consistent with ...
    BeehiveBy beehive.govt.nz
    11 hours ago
  • New social housing places to support families into homes
    New social housing funding in Budget 2024 will ensure the Government can continue supporting more families into warm, dry homes from July 2025, Housing Ministers Chris Bishop and Tama Potaka say. “Earlier this week I was proud to announce that Budget 2024 allocates $140 million to fund 1,500 new social ...
    BeehiveBy beehive.govt.nz
    13 hours ago
  • New Zealand’s minerals future
    Introduction Today, we are sharing a red-letter occasion. A Blackball event on hallowed ground. Today  we underscore the importance of our mineral estate. A reminder that our natural resource sector has much to offer.  Such a contribution will not come to pass without investment.  However, more than money is needed. ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Government sets out vision for minerals future
    Increasing national and regional prosperity, providing the minerals needed for new technology and the clean energy transition, and doubling the value of minerals exports are the bold aims of the Government’s vision for the minerals sector. Resources Minister Shane Jones today launched a draft strategy for the minerals sector in ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Government progresses Māori wards legislation
    The coalition Government’s legislation to restore the rights of communities to determine whether to introduce Māori wards has passed its first reading in Parliament, Local Government Minister Simeon Brown says. “Divisive changes introduced by the previous government denied local communities the ability to determine whether to establish Māori wards.” The ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • First RMA amendment Bill introduced to Parliament
    The coalition Government has today introduced legislation to slash the tangle of red and green tape throttling some of New Zealand’s key sectors, including farming, mining and other primary industries. RMA Reform Minister Chris Bishop says the Government is committed to  unlocking development and investment while ensuring the environment is ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Government welcomes EPA decision
    The decision by Environmental Protection Authority (EPA) to approve the continued use of hydrogen cyanamide, known as Hi-Cane, has been welcomed by Environment Minister Penny Simmonds and Agriculture Minister Todd McClay.  “The EPA decision introduces appropriate environmental safeguards which will allow kiwifruit and other growers to use Hi-Cane responsibly,” Ms ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Speech to Employers and Manufacturers Association: Relief for today, hope for tomorrow
    Kia ora, Ngā mihi nui ki a koutou kātoa Tāmaki Herenga Waka, Tāmaki Herenga tangata Ngā mihi ki ngā mana whenua o tēnei rohe Ngāti Whātua ō Ōrākei me nga iwi kātoa kua tae mai. Mauriora. Greetings everyone. Thank you to the EMA for hosting this event. Let me acknowledge ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Government invests in 1,500 more social homes
    The coalition Government is investing in social housing for New Zealanders who are most in need of a warm dry home, Housing Minister Chris Bishop says. Budget 2024 will allocate $140 million in new funding for 1,500 new social housing places to be provided by Community Housing Providers (CHPs), not ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • $24 million boost for Gumboot Friday
    Thousands more young New Zealanders will have better access to mental health services as the Government delivers on its commitment to fund the Gumboot Friday initiative, says Deputy Prime Minister Winston Peters and Mental Health Minister Matt Doocey.  “Budget 2024 will provide $24 million over four years to contract the ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Residential Tenancies Amendment Bill passes first reading
    The Coalition Government’s Residential Tenancies Amendment Bill, which will improve tenancy laws and help increase the supply of rental properties, has passed its first reading in Parliament says Housing Minister Chris Bishop. “The Bill proposes much-needed changes to the Residential Tenancies Act 1986 that will remove barriers to increasing private ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Montecassino Commemorative Address, Cassino War Cemetery
    Standing here in Cassino War Cemetery, among the graves looking up at the beautiful Abbey of Montecassino, it is hard to imagine the utter devastation left behind by the battles which ended here in May 1944. Hundreds of thousands of shells and bombs of every description left nothing but piled ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • First Reading – Repeal of Section 7AA of the Oranga Tamariki Act 1989
    I present a legislative statement on the Oranga Tamariki (Repeal of Section 7AA) Amendment Bill Mr. Speaker, I move that the Oranga Tamariki (Repeal of Section 7AA) Amendment Bill be now read a first time. I nominate the Social Services and Community Committee to consider the Bill. Thank you, Mr. ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • First reading of 7AA’s repeal: progress for children
    The Bill to repeal Section 7AA of the Oranga Tamariki Act has had its first reading in Parliament today. The Bill reaffirms the Coalition Government’s commitment to the care and safety of children in care, says Minister for Children Karen Chhour.  “When I became the Minister for Children, I made ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • China Business Summit 2024
    Kia ora koutou, good morning, and zao shang hao. Thank you Fran for the opportunity to speak at the 2024 China Business Summit – it’s great to be here today. I’d also like to acknowledge: Simon Bridges - CEO of the Auckland Chamber of Commerce. His Excellency Ambassador - Wang ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Assisted depatures from New Caledonia
    Foreign Minister Winston Peters has confirmed a New Zealand Government plane will head to New Caledonia in the next hour in the first in a series of proposed flights to begin bringing New Zealanders home.    “New Zealanders in New Caledonia have faced a challenging few days - and bringing ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Assisted departures from New Caledonia
    Foreign Minister Winston Peters has confirmed a New Zealand Government plane will head to New Caledonia in the next hour in the first in a series of proposed flights to begin bringing New Zealanders home.  “New Zealanders in New Caledonia have faced a challenging few days - and bringing them ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Government to rollout roadside drug testing
    The Coalition Government will introduce legislation this year that will enable roadside drug testing as part of our commitment to improve road safety and restore law and order, Transport Minister Simeon Brown says.  “Alcohol and drugs are the number one contributing factor in fatal road crashes in New Zealand. In ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Minister responds to review of Kāinga Ora
    The Government has announced a series of immediate actions in response to the independent review of Kāinga Ora – Homes and Communities, Housing Minister Chris Bishop says. “Kāinga Ora is a large and important Crown entity, with assets of $45 billion and over $2.5 billion of expenditure each year. It ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Pseudoephedrine back on shelves
    Associate Health Minister David Seymour is pleased that Pseudoephedrine can now be purchased by the general public to protect them from winter illness, after the coalition government worked swiftly to change the law and oversaw a fast approval process by Medsafe. “Pharmacies are now putting the medicines back on their ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • New Zealand-China Business Summit
    Tēnā koutou katoa. Da jia hao.  Good morning everyone.   Prime Minister Luxon, your excellency, a great friend of New Zealand and my friend Ambassador Wang, Mayor of what he tells me is the best city in New Zealand, Wayne Brown, the highly respected Fran O’Sullivan, Champion of the Auckland business ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • New measures to protect powerlines from trees
    Energy Minister Simeon Brown has announced that the Government will make it easier for lines firms to take action to remove vegetation from obstructing local powerlines. The change will ensure greater security of electricity supply in local communities, particularly during severe weather events.  “Trees or parts of trees falling on ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Wairarapa Moana ki Pouakani win top Māori dairy farming award
    Wairarapa Moana ki Pouakani were the top winners at this year’s Ahuwhenua Trophy awards recognising the best in Māori dairy farming. Māori Development Minister Tama Potaka announced the winners and congratulated runners-up, Whakatōhea Māori Trust Board, at an awards celebration also attended by Prime Minister Christopher Luxon and Finance Minister ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • DJ Fred Again – Assurance report received
    "On the 27th of March, I sought assurances from the Chief Executive, Department of Internal Affairs, that the Department’s correct processes and policies had been followed in regards to a passport application which received media attention,” says Minister of Internal Affairs Brooke van Velden.  “I raised my concerns after being ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • District Court Judges appointed
    Attorney-General Judith Collins has announced the appointment of three new District Court Judges, to replace Judges who have recently retired. Peter James Davey of Auckland has been appointed a District Court Judge with a jury jurisdiction to be based at Whangarei. Mr Davey initially started work as a law clerk/solicitor with ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Unions should put learning ahead of ideology
    Associate Education Minister David Seymour is calling on the Post Primary Teachers’ Association (PPTA) to put ideology to the side and focus on students’ learning, in reaction to the union holding paid teacher meetings across New Zealand about charter schools.     “The PPTA is disrupting schools up and down the ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Craig Stobo appointed as chair of FMA
    Commerce and Consumer Affairs Minister Andrew Bayly today announced the appointment of Craig Stobo as the new chair of the Financial Markets Authority (FMA). Mr Stobo takes over from Mark Todd, whose term expired at the end of April. Mr Stobo’s appointment is for a five-year term. “The FMA plays ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Budget 2024 invests in lifeguards and coastguard
    Surf Life Saving New Zealand and Coastguard New Zealand will continue to be able to keep people safe in, on, and around the water following a funding boost of $63.644 million over four years, Transport Minister Simeon Brown and Associate Transport Minister Matt Doocey say. “Heading to the beach for ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New Zealand and Tuvalu reaffirm close relationship
    New Zealand and Tuvalu have reaffirmed their close relationship, Foreign Affairs Minister Winston Peters says.  “New Zealand is committed to working with Tuvalu on a shared vision of resilience, prosperity and security, in close concert with Australia,” says Mr Peters, who last visited Tuvalu in 2019.  “It is my pleasure ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New Zealand calls for calm, constructive dialogue in New Caledonia
    New Zealand is gravely concerned about the situation in New Caledonia, Foreign Minister Winston Peters says.  “The escalating situation and violent protests in Nouméa are of serious concern across the Pacific Islands region,” Mr Peters says.  “The immediate priority must be for all sides to take steps to de-escalate the ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New Zealand welcomes Samoa Head of State
    Prime Minister Christopher Luxon met today with Samoa’s O le Ao o le Malo, Afioga Tuimalealiifano Vaaletoa Sualauvi II, who is making a State Visit to New Zealand. “His Highness and I reflected on our two countries’ extensive community links, with Samoan–New Zealanders contributing to all areas of our national ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Island Direct eligible for SuperGold Card funding
    Transport Minister Simeon Brown has announced that he has approved Waiheke Island ferry operator Island Direct to be eligible for SuperGold Card funding, paving the way for a commercial agreement to bring the operator into the scheme. “Island Direct started operating in November 2023, offering an additional option for people ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Further sanctions against Russia
    Foreign Minister Winston Peters today announced further sanctions on 28 individuals and 14 entities providing military and strategic support for Russia’s invasion of Ukraine.  “Russia is directly supported by its military-industrial complex in its illegal aggression against Ukraine, attacking its sovereignty and territorial integrity. New Zealand condemns all entities and ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • One year on from Loafers Lodge
    A year on from the tragedy at Loafers Lodge, the Government is working hard to improve building fire safety, Building and Construction Minister Chris Penk says. “I want to share my sincere condolences with the families and friends of the victims on the anniversary of the tragic fire at Loafers ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Pre-Budget speech to Auckland Business Chamber
    Ka nui te mihi kia koutou. Kia ora and good afternoon, everyone. Thank you so much for having me here in the lead up to my Government’s first Budget. Before I get started can I acknowledge: Simon Bridges – Auckland Business Chamber CEO. Steve Jurkovich – Kiwibank CEO. Kids born ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New Zealand and Vanuatu to deepen collaboration
    New Zealand and Vanuatu will enhance collaboration on issues of mutual interest, Foreign Minister Winston Peters says.    “It is important to return to Port Vila this week with a broad, high-level political delegation which demonstrates our deep commitment to New Zealand’s relationship with Vanuatu,” Mr Peters says.    “This ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Penk travels to Peru for trade meetings
    Minister for Land Information, Chris Penk will travel to Peru this week to represent New Zealand at a meeting of trade ministers from the Asia-Pacific region on behalf of Trade Minister Todd McClay. The annual Asia-Pacific Economic Cooperation (APEC) Ministers Responsible for Trade meeting will be held on 17-18 May ...
    BeehiveBy beehive.govt.nz
    1 week ago

Page generated in The Standard by Wordpress at 2024-05-24T09:43:49+00:00