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National is not counting its chickens for granted

Written By: - Date published: 8:47 am, February 17th, 2020 - 27 comments
Categories: class war, Economy, housing, national, same old national, Simon Bridges, tax - Tags:

We are sprinting into election year and the policies are starting to emerge.  And today Simon Bridges and National are going to announce a new policy that will surprise and astound you.

Yes we are talking about tax cuts!  Who would have guessed?

From Derek Cheng at the Herald:

National leader Simon Bridges will today outline the party’s economic goals and who will benefit most from the party’s proposed tax cuts.

But he is keeping mum on how much people will be better off from the tax cuts, saying that will be unveiled later this year.

Bridges said the party will also target costs of living, including reversing new costs on landlords in an effort to lower rents for tenants.

But there would be no requirement for landlords to pass those savings on to tenants.

Figures will be announced later in the year.

Bridges has his own bullet list of things that he wants to achieve including:

  • Economic growth at 3 per cent per annum at least
  • New Zealand’s per capita growth rate in the top half of the OECD
  • Reducing the after-tax income gap with Australia
  • Reducing the number of New Zealanders heading overseas
  • Reviving business confidence

Of course this has been tried before.  Remember this from 2008?

And New Zealand’s growth rate for the March 2019 quarter compared to others in the OECD suggests that our growth rate at the time was 2.5% compared to the OECD average of 1.8% and the European Union figure of 1.5%.  

As for the reduction of New Zealanders heading overseas this is almost inevitable.  As the climate crisis worsens New Zealand will be seen as a haven and more people will stay put.  Not to mention Kiwis living in Australia thinking of returning home.

It is potent politics.  The combination of appealing to personal greed and hatred of government and politicians means that a sufficiently large number of people will think it is a good idea to make it viable. 

And it feeds into National’s reputation as being good economic managers.  Despite the overwhelming evidence to the contrary.

National is also proposing to reverse Government policies that have slowed down real estate price increases, including  loosening restrictions on foreign ownership of residential properties. In what way we do not know.  Obviously engorging out of control real estate prices is more important than making sure our kids can afford to buy a home.

27 comments on “National is not counting its chickens for granted ”

  1. Andre 1

    Some care needs to be taken in the framing around what a bunch of crap ideas they are. Trying to paint it as coddling the already-privileged is just going to appeal to the rabids already fully locked into the idea of eating the rich.

    I personally prefer talking about people paying back in to maintaining the system that has done so much to lift them and continues to lift them. But maybe that's a little too complex an idea.

    https://www.theguardian.com/commentisfree/2020/feb/16/labour-should-stop-demonising-the-rich-most-britons-like-them

    • RedLogix 1.1

      The critical line in that article is this:

      If someone has done well in life, we tend to assume they’ve worked hard and deserve it.

      In an ideal world every wealthy person would fit this description, but of course we all know this is not always the case, we understand that luck, social connections and being a thieving arse sometimes plays a part.

      But telling the difference is a non-trivial task, how to set the criteria for 'good' wealth vs 'bad' wealth is highly subjective and real people are complex. No-one is purely good or bad, we're all a mix of both. We've seen the marxist catastrophes when we try to use state power to impose this decision; the power always into the hands of the people you would least want to have it, the resentful and vengeful.

      Therefore we tolerate a certain amount of 'undeserved' wealth in our societies as a reasonable price to pay for the wider benefits it brings. We want people who work diligently and creatively to be rewarded, we all want a world in which there is the hope that life can improve through our own efforts. People truly value this freedom, the freedom to strive and accept the risk of failure this entails.

      After all this is the often unspoken goal of the left, improving the lot of the poorest and weakest in life, yet all too often it's drowned out by cries to pull down the most capable and successful. And most people see this for the bs it is.

      • WeTheBleeple 1.1.1

        "the power always into the hands of the people you would least want to have it, the resentful and vengeful." You could just as easily be talking about Trumps America. A billionaires pet project that says fuck you to the weakest and most vulnerable, fuck you to the middle class, fuck you to law, and fuck you to the planet.

        Bernie Sanders has a movement that says 'enough'. Millions agree and despite the best efforts of every self serving mongrel with skin in the game to deny he even exists, his base continues to grow.

        The 'hard working Joe' who is rich is largely a myth. Maybe 1% of the 1%. The idea of financial freedom is that you get so much money you can retire on passive income. Buy a house, use it as collateral, buy another. Nothing hard work about it. In other words total grifters and bludgers. Relatively useless people indifferent to the needs of any but themselves might be held up as role models, but really, fuck those people. If we were all as useless as the passive income crowd nothing would be done and society would become a shithole overnight. Even with society functioning, a few of them aka Nats aka Tories aka Republicans aka Liberals… in charge, and the rest of society nose dives into freefall.

        The only time these self-indulgent types lift a finger is to vote to fuck everyone else over. Screw them, screw their illusions they contribute to society, screw their delusional superior horseshit stance. Pack of wankers, really.

        • Andre 1.1.1.1

          The problem with the idea that Sanders' base continues to grow is, well, the fact that his vote share in the Democratic primary so far is half what it was four years ago and shows no signs of being any higher in the voting states to come.

        • RedLogix 1.1.1.2

          If we were all as useless as the passive income crowd nothing would be done and society would become a shithole overnight.

          In essence this eliminates the notion of investment in the future. Over 20 years ago I started to invest in my retirement. My partner and I personally invested at least 6,000 hrs of our time over some years and considerable funds that I earned in my day job. For much of the past 20 years my tenants have lived in better houses than we do, they certainly have nicer furniture and flasher cars. Essentially I've been subsidising their housing with the expectation that once the mortgage is paid off the passive income will be my reward when I stop working.

          I could have stacked the same savings into a bank account, but that goes backward after inflation and tax. I'm part of the generation that had little regard for the NZ stock market because it's too small, essentially everyone is an insider to some degree, but I'm willing to consider something overseas.

          My father was forced into an early retirement at 58, now he is 91 and has been retired almost as long as he worked. His savings were used up a decade ago, and I've funded much of his costs since. Now I'm close to retirement, and my obligations to him alone considerably exceed my potential Super income.

          I'm not apologising for aspiring to something more than $320 pw income when I retire. The alternative strategy that is used in countries where there is no social security and little trust in the future is to simply have lots of children and hope that at least some of them will support you in old age.

          Everything from putting cash into a bank account, to property, to starting and running a business, to investing in bonds or shares … at whatever scale … all have the innate feature of generating a potential future income. This income only looks 'passive' if you don't account for the active investment at the beginning and the risks taken along the way.

          Shut down investment and eliminate all passive income as you demand, and you very quickly arrive at the marxist shitholes of the 20th century. I personally worked in Russia for a period about 20 years ago. Despite having gone through a decade of hell in the 90's, the first toast at every vodka session was "to freedom".

          And don't go all binary black and white on me; I continue to argue as I have done for years that a society that goes too far the other way and degenerates into extremes of wealth and poverty has another kind of problem. The correct answer is in finding the balance of policies between the two extremes. And in this the article Andre linked to is worth a read.

          • WeTheBleeple 1.1.1.2.1

            I'm merely flipping what was said about the left extreme to look at the right. Not so much interested in whataboutism as highlighting exactly what you came to in reply 'finding the balance in policy between the two extremes'.

            The extremes are recalcitrant assholes who've hijacked the narrative for all of us. It's pathetic I detest them equally and especially the media who feed off the 'controversy'. We don't converse we take sides of assholes we don't specifically agree with at all, but they resemble 'left' or 'right' so we jump on the bullshit wagon.

            Unfortunately, there's no balance from National at all. It is by the rich for the rich and any suckers they can bring along for the ride. The real estate market has been well and truly hijacked by investors, and the so called money gurus who tell their clients to buy housing. I've been to the seminars, drunk the kool aid, till I met the self absorbed folks involved – Exit, stage left.

            A society addicted to passive income is inherently lazy. This is not investment in anything but self. No business generated, nothing produced. A loophole in taxes. I got no problem with mom and dad investing for retirement, but earnings without tax has turned this opportunity into a free for all; and the housing crisis is a direct result of successive governments failure to address it. Time will tell if any of the coalitions moves make a change. So far, I don't know, and don't believe media's lambasting of all things coalition for a minute.

            The market is out of reach. Social housing seems to be the only out for many hard working people. People who work just as hard, and in most cases far harder, than the middle class. The same middle class who leap on-board a National government to get another tax break, while making claims of how well-intentioned they really are. Altruism gets a tax break too, apparently.

          • Alan 1.1.1.2.2

            well said

      • AB 1.1.2

        "Therefore we tolerate a certain amount of 'undeserved' wealth in our societies as a reasonable price to pay for the wider benefits it brings"

        Yes we do. And we used to have progressive income taxes that implicitly recognised that very high net incomes were likely to be aberrations – that someone had got themselves into a position where they were rewarded disproportionately by extracting value created by others. ticket-clipping, monopolies, predatory pricing, speculation, socialising costs onto tax-payers etc. So under those conditions we could shrug our shoulders and tolerate 'undeserved wealth' because there was a general (though imperfect) mechanism for correcting it. We simply didn't have to make impossible determinations of 'deserved' vs 'undeserved' .

        But this isn't even the main problem – which is now cultural/psychic. By learning to tolerate undeserved wealth even without a corrective mechanism, we have simultaneously learned to tolerate undeserved hardship.

        • RedLogix 1.1.2.1

          By learning to tolerate undeserved wealth even without a corrective mechanism, we have simultaneously learned to tolerate undeserved hardship.

          Yes that frames it well. While typing out above a very similar thought came to mind and I acknowledge how this makes sense. Yet the weasel word is 'undeserved'. On what precise criteria do we make this judgement?

          How does a win at Lotto work for you? Or a good run at the TAB? Or a smart stock market tip? Are all these 'undeserved'? Because if you want to take that argument to the electorate good luck to you.

          The notion of the 'deserving poor' is equally a minefield of intrusiveness and moral judgements. Back when pensions were means tested, many elderly preferred not to claim what was due to them rather than go through the process. It's not a lot better nowadays when WINZ goes poking through your affairs to determine what you 'deserve'. This is largely why I've been a staunch advocate of a UBI for many years.

  2. Sanctuary 2

    National's housing proposals are straight out class war. They've basically written a policy designed solely for rich speculators and the privileged idle rentier class.

    • Graeme 2.1

      One word.

      Fundraising

      That's what they do.

    • Sacha 2.2

      National’s housing proposals are straight out class war.

      Verily. A clear choice at election time.

      Be interesting to see how a counter line like 'reduce crime by keeping rents in check' would play. Must be some way to appeal to the aspirational Nat voter who isn't wealthy enough to live in a gated community and send Jemima and Sebastian to a private school, but shares the anxieties the party exploits.

      • WeTheBleeple 2.2.1

        'Reduce crime by keeping rents in check'

        Sometimes your insight is so succinct I have to take a moment just to absorb and enjoy.

    • AB 2.3

      This is why National is so brilliant at 'delivery'. Don't go for massive, fiendishly difficult projects like drastically reducing CO2 emissions – that's too hard. Just a few quick legislative/regulatory/tax changes to tilt the table and make all the cash slosh in your direction. Done and dusted – delivery on steroids!

      • Wensleydale 2.3.1

        They're deliverers all right. Loads of cash for their entitled friends, and relentless misery and struggle for those at the bottom. Oh, and while you're struggling, they'll continually tell you how hopeless you are for having to struggle. "You're just not trying hard enough! Too much smashed avocado on toast! Where's the tightening of the belt and the personal responsibility?! Eh?! Wasters! The lot of you!"

        People have dreadfully short memories. Wave a fistful of twenties in front of the electorate and they're all "Oh, they weren't THAT bad last time, and I get a bit of extra pocket money to fritter away on stuff… so why not?"

        They were that bad last time. They were fucking awful.

  3. Adrian 3

    Getting rid of rental restrictions…Priceless!

    Getting rid of overseas buyer restrictions for $100,000 ( cut up in to manageable $14,999 lots of course )…Bargain!.

  4. Adrian 4

    Be under no illusions, that money came directly from the CCCP.

  5. NZJester 5

    Watch the tax cuts policies very carefully. At some point, there will be some announcement as to how he is going to screw over the less well off in order to afford those tax cuts for the rich who simply do not need them.

    • indiana 5.1

      If – and its a big IF – a 0% tax rate on the first $20k of your individual income is introduced, will that screw over the less well off?

      • Sacha 5.1.1

        Depends how much your rent goes up by, I guess.

      • Jimmy 5.1.2

        A review of the tax bracket rates on salary and wage earners is well over due. You only need to earn $48k to be paying 30% tax; and $70k to pay 33%. These brackets haven't moved since 2011?

        I reckon the first $10k should be tax free not sure about first $20k. They should also bring in a higher rate, say 45% on income over $175k for example.

        • Wensleydale 5.1.2.1

          But… won't that onerous tax burden on the affluent discourage 'wealth creators' from creating wealth? You know, so it can trickle-down to the rest of us plebs at the bottom?

          • Jimmy 5.1.2.1.1

            Too bad. If they are earning over $175k (which is just a suggested level) they can afford 45% on anything over that easily. Sure, some will get clever accountants to try and avoid, but more importantly is the lower end rates. Labour have done a good thing IMO raising the min wages, but they are now pushing more people in to the higher income tax brackets. $70k is no longer a high high income (and $48k certainly isn't where you start paying 30%). Those rich will also be better off if lower brackets increased which offsets some of 45% rate if brought in.

      • Muttonbird 5.1.3

        This would cost about 7 Billion annually. Please explain how you would pay for it.

  6. Muttonbird 6

    Bridges said the party will also target costs of living, including reversing new costs on landlords in an effort to lower rents for tenants.

    Hahahahahah! Anyone think this would happen?

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