The government that can’t tell us how much their asset sales policy will cost in lost dividends and sales costs, yet they’ve magicked up some numbers with all kinds of dodgy assumptions that supposedly show Labour’s tax package doesn’t add up. Well, I suppose they would know something about borrowing for tax cuts but their attacks on Labour aren’t credible.
Keith Ng, I/S, Bernard Hickey, Gareth Morgan, Brian Fallow, Rod Oram, BERL, and every other respectable economic analyst in the country has had a chance to see Labour’s numbers. They have concluded that they add up:
National’s first mistake is to assume that this is all of Labour’s fiscal package. Clearly, it this isn’t Labour’s complete fiscal package, it’s just the tax stuff. Taxes are taken off good things and put on to bad things. When you look at the costings, you can see how they offset each other.
Bugger all is on extra spending, most appears to be offsetting the revenue National has booked from asset sales, and getting debt down. In the end, Labour ends up with less net debt than National:
You can see that not only does Labour end up beating National’s official numbers, it beats by a country mile National’s actual numbers when lost dividends from asset sales are counted.
National’s come back at this with a shoddy piece of work that Bill English has washed his hands of, leaving Steven ‘Mediaworks handout’ Joyce to put his name to it:
Basically, they’ve decided to carve great hunks off the revenue from Labour’s new taxes and increase the cost of Labour’s tax cuts. There’s all kinds of pretty boring assumptions they made to do this. One is assuming that the cost of the $5K tax-free zone will grow as fast as tax revenue. That’s rubbish, since nearly everyone earns $5K and will get the maximum possible cut already, the cost won’t grow over time except from population growth. The most egregious assumption they’ve made, though, is simply not counting the $3 billion Labour will raise from anti-avoidance measures with the glib ‘the government is putting significant resources into this area’. All up, National has knocked $12 billion off Labour’s revenue and added $15 billion to their costs.
I also find it very interesting that they haven’t included the restart of Cullen Fund contributions, which Labour has talked about doing. How many billions extra would that add to the government books by 2025?
It comes down to who you find the most credible. The government that hasn’t been able to predict its own deficits within cooee year after year, hasn’t counted the costs of asset sales while booking the revenue, won’t admit the impact of restarting Cullen Fund contributions, and knocked out some dodgy numbers in a couple of days or the party that went to BERL to get their package costed, with numbers that have widely been assessed as very conservative?
The choice is yours.
– Bright Red