What a surprise! What does a right wing party do when it is facing annihilation but promise tax cuts that favour the rich, even though a month ago it said it would not.
From Thomas Coughlan at Stuff from August 6 this year:
It has been an eventful week for Goldsmith. He’s faced down attacks from the Government over his goal of reducing New Zealand’s core Crown debt-to-GDP ratio to 30 per cent in a decade – attacks Goldsmith labelled as “scaremongering”. Then, on Wednesday morning, Goldsmiths’ leader, Judith Collins ruled-out tax cuts for National’s election platform
Goldsmith had been working on a tax package with former leader Simon Bridges. The part that got announced was a plan to index tax brackets to wage growth, stopping “bracket creep”, which saw people’s taxes rise as wage inflation put them into ever higher tax brackets.
The other part of that plan involved tax cuts and it’s been shelved for now. Goldsmith believes there’s simply too much borrowing to justify it.
“I’m sure we will have an opportunity to do that down the line,” Goldsmith said.
But with the Government slated to borrow $60b over the course of the next year, the Government needs revenue.
“These are eyewatering sums,” Goldsmith said of the borrowing, nothing that at the peak of the lockdown the Government was borrowing about a billion dollars – the equivalent of the Pharmac budget – every four days.
But while tax cuts may be off the table, its only for the time being.
“Once we get the economy up and running again, New Zealanders can be assured that the National party will always be looking for opportunities to reduce the tax burden,”
Fast forward to yesterday when National announced that it would bring in tax cuts. It appears that sub 30% polling has persuaded National that it should reverse its former position. Even if the promised cuts are temporary. And it brought out a tax calculator. This has been done before. It worked in the past but we live in interesting times.
We are in the middle of a pandemic and the Government has already shelled out tens of billions of dollars to protect jobs and make sure the health response was up to scratch.
Which it has done, rather successfully. With luck it may be that we have seen off the second community outbreak of the disease. And the Government is getting ready for the next wave. Future waves will occur. We need to make sure we have the resources ready for when the next one happens.
And debt is piling up. This week’s PREFU suggested that in the short term things are looking better than previously anticipated. Unemployment is not as bad as Treasury thought and the rebound in growth is better than anticipated. But longer term things look grimmer. It will take the world longer to bounce back to business as usual. Air travel and tourism will be screwed for longer than we thought. The environment may thank us for this but the bean counters will not.
Judith described the PREFU as catastrophic. You would think that she would stick to her earlier announced position.
So what does a responsible political party do? Make sure that the state has the resources available so that it can meet the next wave and resource the health response or engage in a lolly scramble?
National chose the lolly scramble. Even though previously it said it would not.
This is a sign of desperation, an attempt to preserve the support they have rather than put them into a position where they could win power. I can confidently say that the average kiwi prefers that the Government continues to do its job, rather than have enough for a couple of cups of extra coffee each week.
It has worked in the past but this time I don’t think so. Appealing to kiwi’s better sense is currently much more potent than appealing to their greed.