National: looking after those in need

Written By: - Date published: 10:51 am, June 11th, 2012 - 22 comments
Categories: benefits, tax - Tags:

When Righties say we can’t afford to support solo mums, what do they think we can afford instead?

Cost of DPB for the 3,000 teenage solo mums and their kids: $50 million

Cost of tax cuts for the top 1% of earners under National: $600 million

Sources: MSD benefit fact-sheets, Budget Crown expense tables, IRD income distributions of individual customers

22 comments on “National: looking after those in need”

  1. Picking two narrow and unrelated figures and comparing them is meaningless. DPB and tax are quite different things.

    DPB – which happens to be one part of social spending – is a cost. It gives money to people.
    Tax is a revenue – it takes money off people.

    What is the “cost” of Labour’s tax cuts?
    How long can you keep claiming a tax cut is a cost?
    Would economic recovery and tax takes been further hampered without the tax cuts?
    Would increasing tax rates increase the tax take? (in some cases the reverse has happened)

    • Deano 1.1

      You really think that giving the 1% $600m in tax cuts per year has helped the economy?

      God, you’re so fucken stupid.

      • Pete George 1.1.1

        Initially it has probably mostly helped the economy by helping people retire private debt – and high levels of private debt is a major economic issue for New Zealand.

        But it was never claimed the so-called “tax switch” would have an immediate effect.

        Across the board income, company and savings tax cuts would have “an initial upfront cost” for the Crown coffers. But tax increases elsewhere and the steeply rising macroeconomic rewards predicted for the economy from the changes would see an initial $460 million cost in 2010-11 become a $175m benefit by 2013-14.

        And that is supported by some who should know a bit more than Deano, including PricewaterhouseCoopers chairman:

        “I think the right steps were taken,” Mr Shewan says.

        “There is no doubt that we want to come out of this deficit as quickly as possible, and that is dependent on economic growth. But the good news is that it’s absolutely clear that lower tax rates are better for economic growth than higher tax rates.”

        The soft revenue showing up in the Crown accounts at the moment is a reflection of an embattled global economy and has nothing to do with the tax switch, he says.

        “I don’t accept for a moment the proposition … that now that we’ve got a bigger deficit than expected that demonstrates the tax switch was the wrong thing to do.”

        But it’s still to soon to know for sure.

        The first full tax year under the changes only wound up at the end of last week. When the shape of the numbers flowing from those tax returns is known, the impact of the great tax switch of 2010 will finally become a little clearer.

        How this stacks up will probably be a major if not critical factor in the 2014 election.

        • McFlock

          A guy who (I assume, being PWC chair)  benefited greatly from King John’s tax cuts for the rich thinks they were a good idea.
          Colour me fucking gobsmacked. For your next trick you’ll announce that the chair of Mainfreight thinks that cutting diesel road user charges would be good for the economy (no idea if that is actually the case, but it would seem to be a good bet that they’d agree with the idea).

        • mike e

          Pretty Gormless around the world right wing governments have given tax cut to the well off.
          In every case govt debt has sky rocketed unemployment has gone up and their economies have stagnated.UFwit

    • Kotahi Tane Huna 1.2

      “in some cases the reverse has happened”

      Some cases? And which would those be?

      Let’s leave Petey to his unsupported assertions and ask an economist: “The New Palgrave Dictionary of Economics reports that estimates of revenue-maximizing tax rates have varied widely, with a mid-range of around 70%”

      Is Petey suggesting that we raise the tax rate to 70%, or is he just blathering involuntarily? Who can tell?

    • Lanthanide 1.3

      Well Pete, whether you like calling a tax cut a ‘cost’ or not is pretty irrelevant, because that’s how treasury and the politicians themselves consider it in their budgets and planning.

      • Pete George 1.3.1

        No, they consider tax cuts an adjustment in revenue, which is on the opposite side of the ledger to costs.

        • Deano

          by your hair-brained logic, we could cut taxes to zero and it wouldn’t cost a cent, it would increase growth off the charts, and we would actually raise more tax.

          dumb, dumb, dumb.

          The cost of tax cuts, just as the cost of spending, is the money that has to be borrowed which otherwise would not have been.

          • McFlock

            yeah – if you need to fiddle the books to show a profit, then you’re on a slippery slope.
            Stick with the fundamentals: money in > money out. 

    • freedom 1.4

      I saw the post on the main page and had a little bet with myself that PG would be first out of the gate and crying about how unfair it is to pick on rich people. A bit disappointed that he went the other way and spewed a nonsensical argument instead. My bet was if i was wrong, i had to reply.

    • Draco T Bastard 1.5

      DPB and tax are quite different things.

      DPB is paid from the tax moron. Decrease tax and the DPB can’t be paid.

      How long can you keep claiming a tax cut is a cost?

      As long as the income from taxes doesn’t match the outgoings.

      Would economic recovery and tax takes been further hampered without the tax cuts?

      A good writeup on that here. Short answer: No, in fact, the evidence shows that increasing taxes on the rich would have been stimulatory.

      Would increasing tax rates increase the tax take?

      Yes, see above.

      • North 1.5.1

        I don’t know how many times I’ve started a reply to your rubbish Pete George and given up, thinking “No, what’s the point……he’s a fruit loop and what’s more he’ll never stop…….why bother ?”

        Well this time Georgous………the gift of tax relief for the rich. How the fuck is it not a cost ? I think you’re so admiring of yourself……you know……..stood for Parliament and all that……… had the odd audience with King John and a few lessons in Bouffantry from your leader………then think you can talk any old shit you picked up from those narcissists and it redefines the world. LOL !

        Worse…….you do it all with such clerical posturing and solemnity. Urrgghh !

      • mac1 1.5.2

        “DPB is paid from the tax moron. Decrease tax and the DPB can’t be paid.”

        Draco T, your inadvertent typo by leaving out a comma after the word tax changes the meaning from the one you intended to point out another truth.

        The tax avoider,the tax evader and the socially limited don’t like paying tax, no doubt calling the payer a ‘tax moron’ and especially do many such types hate paying DPB. No doubt they would love to pay less tax so that the DPB is not paid.

        I’ve been trying to figure out why a man like Key, who normally has no problem with being ‘dinnamic’ and changing his stance, is being intransigent at the moment over not changing the Super age even when being offered a politicking-free debate and solution.

        My fear is that he is wanting to make Super so unaffordable (through low taxes and changes in demographics) that he will force through a solution of less money paid out rather than alter the age of entitlement. With English’s Cullen Fund changes and while tax take is low through a possibly long recession and lowered tax rates, this neo-con solution is still on.

    • Murray Olsen 1.6

      Let’s say I want to run a mum and dad business selling something. Snakeoil will do as an example. Costs are what I pay for the snakeoil, revenue is what I get from selling it. To make the business worthwhile, revenue has to be greater than costs. If I decide I want BMWs parked outside my shop and charge less for whoever arrives in a BMW and a Savile Row suit, my revenue goes down. This has exactly the same effect as if revenue stayed constant and costs went up. I end up with less money to feed, house and clothe my family.
      There, put in the form of a simple homily that even RWNJs should be able to understand.

  2. captain hook 2

    wtf does all that mean pete?
    no wonder the literacy skills in this country need work.

  3. Akldnut 3

    How long can you keep claiming a tax cut is a cost?
    For as long as it takes us to repay the total borrowed for those who dont need the tax cut in the first place

  4. This comment may not endear me to some Labour Party MPs or supporters – but SOME ONE has to say this!

    FYI- I am a constituent of David Shearer, voted for him and at the recent Auckland ‘Backbenchers’ event – personally handed him a copy of the following:

    Seems that he may not yet have made the time to read it?


    SOS! Save Our Super!

    “Young Kiwis face higher taxes to pay for pensions”


    Not if the ‘books’ were opened, and all the consultants and private contractors on ‘corporate welfare’ were removed?

    SOCIAL welfare – not CORPORATE welfare!

    Stop the long-term dependency on ‘corporate welfare’ by all these ‘PIGGIES-I-THE MIDDLE’ with their private snouts in our public trough!

    (At both central and local government level).

    Open the books!


    Penny Bright
    Anti-corruption campaigner’

    • ropata 4.1

      Agreed, the public sector ought to be run efficiently but not so gutted that contractors are needed to fill the gaps. But as an IT contractor I don’t complain too much 🙂

  5. tracey 5

    Pg, perhaps you missed the point. Did the top 1% need the tax cut compared to that same money being diverted to, say, preventing teen pregnancy, re training dpb mums with paid child care while they train?

    • mike e 5.1

      tracey solo mums according to pg need a tax hike on GST so the Rich can buy new bmw’s 4wds and look even further down their superior nose’s at them.

  6. North 6

    And Pete……..if your own narcissism is putting some lead in your pencil on account of you’re getting so much attention……..have another think……..ask yourself why my bro’.

    Damn….you’ll probably come up with the answer – ” Because they don’t understand how I’m an oracle…..”

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