Keeping the buggers honest

Written By: - Date published: 3:00 pm, May 18th, 2011 - 31 comments
Categories: john key, national/act government - Tags:

This rolling post is intended to be a record of the lies, misrepresentations, and misdirections the National government and its allies try to foist on us. It’s a ‘facts only’ post.

Today’s topic: borrowing for tax cuts

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John Key said in Parliament yesterday:

National’s tax plan 2010—it does not matter how many times Labour members want to disagree with it; they are just making it up as they do with so much other stuff—was fiscally neutral.

The Budget, however, is quite clear:

It’s pretty clear. The cost of the tax cuts is $1.085 billion in the first four years alone, or $415 million if you count “macroeconomic effects”, which sounds a lot like wishful thinking.

Lying in Parliament. Isn’t there something that can be done about that?

– – – – – – – – – – – – – – – – – – – – – – – – – – – –

The claim: The 2010 tax changes didn’t involve borrowing for tax cuts
The truth: The 2010 tax changes will cost $1.085 billion over the first four years, which will need to be borrowed.

The claim: Public sector wage growth under Labour vastly out-stripped private sector wages, justifying real wage cuts for public servants under National even if strong private sector wage growth occurs.
The truth: Median public service wages rose 41.8%, private sector wages by 39%, between 1999 and 2008.

The claim: rich families are milking the WFF system, so it should be cut.
The truth: Over 97% of WFF payments go to families on below average incomes.

If you’ve got an instance of the government or its allies being caught out like this, click on the ‘contribute post’ button and tell us about it. If it stacks up, we’ll add it to the list.

31 comments on “Keeping the buggers honest”

  1. ianmac 1

    Is it possible to make say $100,000 a cut off for WFF?
    I seem to remember Michael Cullen saying that it was not cost-effective to fiddle around the top edges.

    • Blighty 1.1

      that would create an over 100% effective marginal tax rate.

      Say you’re getting $500 a year in WFF on $99,999. Earn one more dollar and lose $500. In fact, you’re worse off until your gross income is about $100,850. They generally recommend against taxes of over 100 cents in the dollar.

      And it would be for a trifling $10 million a year savings.

      captcha: compute

      • Bunji 1.1.1

        Given the government apparently doesn’t even need the $72 million from the cancelled fuel tax rise, $10 million should be easy to make up…

  2. Deadly_NZ 2

    Yeah but we all know that ol’ smile and wave won’t want to annoy the rich people so it will be people like me who have been made redundant and now have medical problems who will have their WFF slashed while shonkey grant’s his mates yet another tax cut, and me and mine and people like me will starve.

  3. tsmithfield 3

    Key claimed that public servants have been getting paid more. Even the figures The Standard cites confirms this (41.8% v 39%). Where is the lie?

    So far as the problem of bracket creep goes that The Standard has identified, National is trying to eliminate this problem with tax changes. So National’s tax changes are good, right?

    • Lanthanide 3.1

      Um, no, National has not tried to fix bracket creep at all. Bracket creep is when your salary increases by a fixed amount, putting you into the next bracket where you are paid more.
       
      The only way to fix bracket creep is to adjust the brackets (or completely remove brackets altogether). National has not completely removed any brackets, and they have also not moved the brackets at all. The shift from $60k to $70k, and $38k to $48k for the top brackets were from Labour’s tax cut in the 2008 budget that took effect in October 2008, that Key likes to take credit for in all the stats he gets Bill English to cook up for him.

      • tsmithfield 3.1.1

        Are you saying you would like to be rid of tax brackets?!!! You’ll be a paid up member of ACT next. 🙂

        • Lanthanide 3.1.1.1

          No, not at all. I am saying your assertion that National is trying to eliminate bracket creep is 100% wrong, because they have done precisely nothing to “eliminate” bracket creep.

          They have helped to *alleviate* bracket creep by reducing tax rates, but that’s not the same as *eliminate*.

          • Armchair Critic 3.1.1.1.1

            They haven’t done nothing, Lanth. John Key would love to see wages drop, and that would eliminate bracket creep.

            • Lanthanide 3.1.1.1.1.1

              But John Key himself has repeatedly said that average wages are rising. So clearly he’s failed to even manage that.

              • Armchair Critic

                So it’s a total fuck-up all round?
                Where is tsmithfield, surely he must know the answer. Or burt? I’m picking it is probably Labour’s fault.

    • Roger 3.2

      Less than 2% cumulatively over 9 years cannot really be considered as “typically…having higher levels of wage increases prior to National coming into office” now can it. Its funny how you have to clutch at straws to try to prove that Key is not trying to mislead the public.

      • tsmithfield 3.2.1

        A lie is normally when the facts contradict the statement. In this case, even by the figures stated, 2% is higher than 39%. So, even though the amount is small, the facts align with Key’s statement. Also, the public sector is likely to enjoy other cushy benefits such as higher redundancy packages etc that the private sector can’t afford. So the headline figure doesn’t necessarily equate to reality.

        • Pascal's bookie 3.2.1.1

          “In this case, even by the figures stated, 2% is higher than 39%.”

          That’s another fine mess you’ve gotten yourself into.

          • terryg 3.2.1.1.1

            out-pedanting a pedant 😀

            here’s a simple way to determine if someone is a pedant – tell them to “stop being so pendantic”. If they correct you, they are a pedant.

            Cue Python:

            hey you,
            you’re such a pedant,
            got as much brains as a dead ant,
            as much imagination as a caravan site

            • Vicky32 3.2.1.1.1.1

              Hey, speaking as a pedant, I gotta say, we are necessary, even if only as an irritant… 😀
              Vicky

              • terryg

                …..
                but I still love you,
                I still love you,
                ooh, ooh, ooh,
                how swee..e..eet

                (leaving off last line deliberately) ;}

            • Mr. Notpedanticintheslighest 3.2.1.1.1.2

              Of course, that would be a quote from a song by Neil Innes and not, strictly speaking, Python…

              • Jum

                Mr. Notpedanticintheslighest.

                So, r u b’ing ‘sly’ here, Mr N?

              • terryg

                (hangs semi-pedantic head in shame)

                Thanks! that’ll provide hours of entertainment 🙂

        • Roger 3.2.1.2

          The difference is just over 0.3% each year, or less than this if the principle wage is cumulative year on year, so let’s look at his statement.

          They have typically been having higher levels of wage increases prior to National coming into office; public sector wages outstripped private sector wages for a long period of time.

          Typically suggests that there is a clear characteristic of higher wage increases given to public sector workers. But if the average per year wage increase is around 0.3% then this suggests that they have not done better than private sector workers most years, or if they have done, the amount is miniscule and does not suggest a characteristic advantage.

          The comment about public sector wages outstripping private sector wages for a long time cannot be linked to the wage increases. The mix of private and public sector jobs is different, who do you compare police, judges, DOC staff etc to in the private sector. Do chief executives of public sector bodies compare positively to CEO’s of similar sized private sector companies? How do private and public sector doctors and teachers compare in wages? How many public sector employees are in jobs where no qualifications are needed. Public sector waiters, checkout operators?

          The reality is that Mr Key is trying to create the impression that public sector workers were milking it under Labour while the private sector were sweating it out. It’s rubbish

        • KINTO 3.2.1.3

          “Vastly” =/= 2%. QED.

  4. vto 4

    Starter for 10…

    How many shares did John Key and associated persons have in Tranzrail? Was it;

    a. 25,000
    b. 50,000
    c. 100,000

    • Kevin Welsh 4.1

      Depends on whether you are being asked by:

      a. Duncan Garner
      b. Guyon Espiner

      or

      c. Francesca Mold

  5. Afewknowthetruth 5

    When less than 1% of the populace can see what the real game is and everyone else chases the red herrings you supply, you are well on the way to fully-fledged fascism.

    • ZeeBop 5.1

      Its not a choice if one of two options you starve and lose your home.
      Gutter capitalism, gut and capitalize, is all National are.
      But where is Labour? Where is the principle language of rights?
      Labour were not much better, they also offered a tax cut,
      National just out brought the electorate promising no hike in GST,
      no savage cuts in services, the electorate will remember that.
      When Labour are returned it doesn’t mean anything much,
      it will still be the same more profits for absent landlords.

  6. Draco T Bastard 6

    The truth: Median public service wages rose 41.8%, private sector wages by 39%, between 1999 and 2008.

    That’s misleading as it gives an impression that public service workers are paid more for the same job. This may not be true. So, what are the wages to wages comparisons? I suspect you’ll find that they’re all within the ballpark of “market rates”.

  7. Peter 7

    Key in 2008 “After a decade of the most favourable global economic conditions in our lifetimes, all New Zealand has to show for it is an ocean of red ink 10 years into the future,”

    True to his word Key is doing as he predicted, creating an ocean of debt in the public sector and allowing it to expand in the private sector.

  8. Peter 8

    Key in 2008

    “New Zealand needs a Government that is prepared to walk the talk. ”

    That’s why Brash left, so as far as he is concerned Key has been less than honest.

  9. Jum 9

    The Standard,

    Great idea! I will be printing these out and keeping them in my wallet.

  10. National in Parliament are looking desperate today.  They are saying continuously that the tax cuts were broadly revenue neutral, if so I wonder where that huge hole in the country’s finances came from.
     
    And they keep saying that Labour will tax turnover and profit.  Nothing could be further from the truth.
     
    They should be talking up the budget.  Maybe there is nothing to talk up?
     
    And Jacinda has just called Key an “Empathy free comedian”.  Classic.
     

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