National’s tax policy

Written By: - Date published: 8:14 am, March 7th, 2022 - 107 comments
Categories: Christopher Luxon, national, same old national, tax - Tags:

National has reverted to type and in a predictable policy response to just about any problem it sees has promised tax cuts.

Yesterday in his state of the nation speech Chris Luxon promised to reverse Labour’s regional fuel tax, the proposed light rail tax, the extension to the bright line test, interest deductibility on rentals, as well as the new 39 per cent income tax rate and the proposed job insurance scheme.

If in power National would also adjust the bottom three income tax thresholds to account for the inflation seen in the last four years.

The Regional Fuel Tax as applied in Auckland is anticipated to raise $1.5 billion in the next decade.  This unlocks a further $4,3 billion of Government spending.  Doing away with it would knock a big hole in the $31 billion Auckland Transport Alignment Project spend and put us back into the situation, where we were in 2017 there was a $4 billion funding shortfall.  This is the ATAP that the fiscal geniuses in National signed off on.

And it is strange but National has fought all the way Auckland’s Regional Fuel Tax but its MPs still show up to the photo opportunities presented by ribbon cutting events for projects that rely on the extra funding.

Doing away with the proposed light rail tax will do nothing for current cost of living pressures or for that matter congestion.  The tax is not in existence yet and is designed to be a value capture tax so that when property values along the route increase, at some stage in the future where a portion of that increase is realised by way of capital gain.  Private land owners will benefit from possibly the most significant public project since Julies Vogel started building the National Rail system.  National appears to want to kneecap the project every chance it gets.  It prefers that we rely on gas guzzling cars that will only pave the way to some dystopian world wrecked by climate change than build a project that will transform Auckland for the better.

The extension to the bright line test as is the bright line test and the removal of interest deductibility on rentals are having a significant benefit. A combination of policies and events, higher interest rates, a large number of new builds coming onto the market and landlords exiting the market has caused the banks to predict a 6-7% house price reduction in the coming year. Why National would do this while at the same time as complaining about increasing housing affordability is beyond me.

Particularly in relation to the removal of interest deductibility Treasury has said this:

We expect the removal of interest deductibility will have a material impact on house prices. Without this tax change we would have forecast an increase in house prices of 34% over the forecast period. Due to the removal of deductibility we revised our forecast to around 14%, a downgrade of around 16%.

And reversing the 39% new top tax rate will help those earning over $180,000 of which there are not many.

This cut and preventing tax creep will apparently save $1.7 billion a year. And the proposal is heavily weighted to the wealthy.

National’s rhetoric is deceptive.  Luxon in his speech said:

Even after accounting for the $1.7 billion cost of these tax cuts, the remaining $4.3 billion would still be the biggest allowance for new spending initiatives ever. Or Robertson could even use some of it to pay down debt – but that’s not really in Labour’s DNA.

The $1.7 billion is the cost of reindexing tax rates back to 2017 levels and takes no account of the cost of the further tax cuts proposed.  And to keep Auckland’s Transport projects on track a further $4.3 billion will be required to be found.  National’s sums do not match up.

This is not the first time it has engaged in misleading rhetoric about tax cuts.  Remember back in 2009 when they claimed that tax cuts they implemented would be fiscally neutral?

At a time when the country is reeling from a Covid surge and buckling down to address climate change the policy makes no sense. Trust National to seek to rely on personal greed and anti government rhetoric to try and curry support.

107 comments on “National’s tax policy ”

  1. Where is Luxton going to get the money for the Tax Cuts ?

    Put GST up to 20% ?

    • Barfly 1.1

      His "state of the nation" (/barf) made clear Luxon's contempt and disdain for the poor and disadvantaged – AUSTERITY for the poorest would be his solution.

    • Nic the NZer 1.2

      Unfortunately this piece is written inside a fictional framework called fiscal responsibility. This is shared by both main parties in their exercise of fiscal policy, often to the detriment of NZers.

      Simply put there is no requirement for the money for budgeted tax cuts to come from anywhere. The NZ government has absolute discretion over its spending in NZ$, that's because (excluding cash and coins) every single electronic transaction in NZ$ occurs inside a payment system operated by the RBNZ (effectively a government department). If the NZ government wants to pay somebody (or for them to pay some tax/payment) then the RBNZ can clear that payment. This also includes payments around lending to the government, which happen.

      There is a bunch of fiction, often held up in the media, that this implies the government is dependent on wealthy money lenders for its fiscal capacity and so fiscally constrained. Nothing could be further from the truth.

      It becomes important here to understand that most of what is going on around budget day is a lot of forecasting. Some forecasts are made of what spending is committed and based on that what is forecast for the state of economic variables, including the government books in future time periods. These budget forecasts are often off by billions of dollars over the course of 6 months, as you can read from later reports that the country is doing either better or worse than forecast. Of course the financial managers in parliament like to give the impression that everything they touch is carefully budgeted and that it takes a financial genius to balance the country on a tight rope without tipping off into financial ruin. In reality (and as you can probably tell from actual tales of government expenditure disasters) the government could not bankrupt itself if it was trying.

      To highlight how this works think of the extremely dire situation which arose early in 2020. Note that none of the prior budgets expected that the country would be locking down during the following year, nor that the government would be paying a massive wage subsidy to a lot of the private sector. In fact, in raising that kind of expenditure, you would no doubt have been told your spending plans would bankrupt the country. Of course when the need arose however, well it turns out that the RBNZ has plenty of ways to facilitate fiscal capacity. Quickly they selected a conventional one called QE and now hold a significant percentage of govt debt. That is the govt presently owes itself that amount of its own debt (Note the RBNZs balance sheet folds into the central govts balance sheet).

      However to simplify things you can just keep in mind that what ever tax and spending decisions are made by the government, these are always at their discretion. Yes, that includes both sides of the National party tax changes in 2009.

  2. Ad 2

    I was kinda hoping for more.

    I do want Labour to shift tax brackets this budget because frankly it's the only thing that will ensure Labour get a third term.

    Also if he wants to investigate fuel taxes, he needs to address that the entire NLTF is under threat and maybe he needs to fully replace fuel taxes with a RUC for every vehicle. That would cut all our wasteful travel, per driver.

    And if National really want to start putting a ruler over value for money, they might want to start with NZF's Regional Investment Fund to see what it's actually delivered.

    • mikesh 2.1

      With inflation apparently on the rise I would have to agree with adjusting tax brackets. I think also that, in principle, universal road user charges should replace the excise on gasoline, but not just yet. The government wishes to encourage a move to EVs and the lack of road user charges for EVs provides an incentive for that to happen.

      • Ad 2.1.1

        NZTA needs to prepare for a replacement for fuel taxes. Expanding RUC from diesels and particularly the commercial fleets would be a test for the government since it will be an enforcement nightmare over about 3.6 million drivers and 4.5 million vehicles.

        But fuel, if we haven't guessed it already from the Russian invasion, is the key cause of global instability and the kay cause of global warming.

        So it's time we put the cost of that onto drivers by a more targeted means than fuel taxes. National could always take the lead on that if it felt like doing something creative and for which there's plenty of commercial opportunity.

        • ghostwhowalksnz

          Petrol taxes are already directly related to the mileage done and thus targeted. Drive much more and more petrol used. Its simple arithmetic

          The greater need in Auckland is met by the Regional fuel tax

          Targeted . Done and Done

          • Tricledrown

            Less bearaucracy required to collect taxes for a direct tax encouraging more fuel efficient cars as well.

    • AB 2.2

      People on low incomes do pay too much income tax – they're also hit by GST. I'm hoping Robertson does a tax shift – lowering taxes on low incomes or implementing a tax-free threshold at the bottom end, but also at least partially offsetting this by higher taxes on high incomes. This would recognise that markets are intrinsically perverse – and people are often rewarded in ways that are disproportionate and unrelated to the actual value they create.

      • roy cartland 2.2.1


        This is so obvious, why can't Grant just say it? Yes, we're in favour of tax cuts – for those that are actually stuggling as Chris says. Those that earn hundreds of thou, especially through not actually working (like say, owning 7 houses), can pay for it. Surely we're mostly in the first group, who would be left to complain?

        • felix

          Grant can't say it because he's a giant ballsack with no philosophical or moral compass.

          It's just sports to him. Red team blue team. He's measuring his performance against Bill English and Steven Joyce. He is never going to have a meaningful vision to offer. Labour has no future with him holding the purse strings.

      • Jester 2.2.2

        This is why they should change the lower tax bands to give people more in their hand instead of increasing the minimum wage rate to $21.20. Give it to them as a tax cut.

        • Ed1

          I don't know what the situation is now, but some years ago those paying the highest effective rate of tax were those earning enough that benefits were being phased out – the abatement rates meant that they lost more of any real increase in pay to tax and reduction in benefit than the top tax rate. It would be a reasonable policy to limit abatement to the equivalent of the top tax rate – but has that problem been solved already?

          • Descendant Of Smith

            Couples on one income pay a large amount of extra tax as well when compared to two people working on the same income. Some support for couples without children would be appreciated by many – particularly those supporting spouses who are unwell.

            The extra $5,000 or so I pay a year in tax might mean we could actually put one of us in Kiwisaver for instance. Once you could claim a tax rebate for non-working partners. This was scrapped along with life insurance rebates in the mid-80's.

        • Gypsy

          Exactly. David Farrar published a schedule that showed that reversing the bracket creep disproportionately assists lower incomes. I'd go further and lower the lower tax band rates, as you say.

  3. Byd0nz 3

    Remember this. After becoming the next of many new leaders Luxon announced, here we are the new look National. Tax cuts!?New look?

  4. mikesh 4

    Interest should never have been deductible in the first place since it is a cost associated with the acquisition of the capital needed in order to make an investment. Businesses don't own capital, they own depreciable assets. Capital is always owned by individuals – landlords, business proprietors, or private homeowners – and is not therefore involved in the earning of taxable income as required by the income tax act.

    One of the problems with capital gains taxes and, for that matter taxes attributable to the brightline test, is that they don't take interest into account when calculating the base price from which the capital gain is calculated. A cheap house purchased when interest rates are high would attract a larger tax than a more expensive house purchased when interest rates were low, even if both sold for the same price. It seems reasonable to suppose that interest rates influence the price of houses.

  5. Tricledrown 5

    Another round of hospital staff cuts.

    No teachers.

    No pay rises for public services.

    Good old Austerity after 9 years of less than 1% per annum growth less than inflation.

    National have no new ideas just reheated failed policy.

    • Hongi Ika 5.1

      Same old, same old nothing new or inspiring about how they are going to improve the Economy and peoples lives. Still reading out strategies and policies from the old edition of the Crosby Textor Hand Book.

  6. DB Brown 6

    I wrote a bit about this last night. The financial case is not stated, but alluded to:

    Inflation is hitting the entire globe. Luxon trying to use this against the government is disingenuous. His ideas are stale and old.

    Their plan to save the day is… boom tish! tax cuts. I could sit here on any given day, muck about in excel, and produce a National Party speech. It's the same number fudging garbage that got assets sold and other assets run down, from this so called 'fit to govern' party.

    One idea I've heard that makes a lot of sense is to cut GST on fresh food (fruit, veg, nuts, grains, herbs, spices, fish, eggs, dairy & meat). This is a move that would actually benefit consumers and maybe even the government coffers in the long run.

    Reducing the cost of fresh food (not junk) encourages better eating – which leads to better health outcomes. We learn better, act nicer, get sick less, get in trouble less, think clearer, innovate faster? when we eat properly… Not to mention some financial (and thus mental) relief for all who are struggling…

    Apparently the reason we are gouging the shit out of our own populace… is because 'the market' can get a better price offshore. We should have local producers serving local community, not milking us for all it's worth. Why the hell are we forced to compete with wealthy offshore incomes for basic commodities we produce ourselves? And why is junk food so cheap yet good food so expensive? Are we supplementing junk food distributors who contribute to poor health outcomes right across society? Are we really going to look after our people, or just 'some' people, namely, business and land owners.

    I'm barely affected by food prices but I see how rapidly things are going up. Unfortunately the pains just begun due to Putin being yet another fucking stain on humanity.

    I will always advocate for gardening but less and less of you will even have room to garden as population centres intensify. And with the cost of everything being what it is, unless you're on some sweet ticket, you're probably already over-committed and time-poor as well.

    A removal of GST from fresh food. Talk about the idea, get in your MP's ear. It could make a real difference for so many.

    • Hongi Ika 6.1

      Inflation is caused by profit taking by the Global Corporates.

      • DB Brown 6.1.1

        Well no it's not actually. When we have 100 goods and $100 each good is worth a dollar. But if we pump another $100 into the economy, each good is, at least potentially, worth $2.

        If you print money but use it to make goods, you can kind of get away with it as total assets rise as well as total money. But if you print money and use it for something like wages, everything gets out of whack.

        There are others here who understand this stuff way better than I do.

        • Tricledrown

          DB you are partially right inflation hasn't been a problem for around 20 years.

          Even with the GFC in 2008 with trading blocks and countries printing vast sums of money there was virtually no inflation as supply chains weren't affected.

          And globalised countries could easily move production or buy product from cheaper sources keeping wages to a minimum like clothing production moving to Bangladesh cars from Japan to China,Vietnam and Thailand.

          This isn't happening plus microchip production in Taiwan has tanked due to severe drought . Microchips require vast quantities of water for manufacture.

          The world's economy is a lot more fragile than anyone would have thought.

          A massive wake up call.

        • mikesh

          This would seem to be an oversimplification. In general people don't spend money, but incomes. Incomes depend not just on the volume of money circulating, but also its velocity. Also, whether an increase in the supply of money would be inflationary depends on how much slack there is in the economy. The increase could give rise to more goods becoming available.

      • Tricledrown 6.1.2

        H I.That too but with most of the world on just in time delivery Covid has turned that upside many sick workers not keeping the supply chain functioning.

        Causing massive disruption now pootin has taken advantage of the situation to maximise damage to the global economy.

        • DB Brown

          Cheers for that.

          So – as long as we could keep growing with BAU (pay banks our interest as well as our loans) we were relatively unaffected?

          But now there's some issues… interest rates go up and banks write new rules and start to squeeze the shit out of us. Modern day land grab?

          We can't blame a minimum wage increase for inflation, as inflation is not NZ specific.

          I do wonder if throwing all that money at wage relief isn't at least partly to blame, though I'm not 'blaming' per se, as the wage relief saved a lot of people's asses.

          • Hongi Ika

            Increasing interest rates and rents squeeze the amount of disposable income families have to spend on food. Inflation is just a bullshit word used by Macro Economists.

      • Jester 6.1.3

        You should probably take Economics 101 this year.

    • Hongi Ika 6.2

      It was NZF Policy but I think Winston forgot about it in his old age. Having worked in the FMCG Industry fresh fruit and vegetables are the most profitable lines for the Supermarkets with weekly Gross Profit Targets of 40-50%, which means average mark ups of 80-100%.

      • Tricledrown 6.2.1

        Supermarkets dump huge amounts of produce because they want their shelves to look full it causes people to buy more.

        Fresh produce deteriorates rapidly so anything that looks limp is dumped.

        That's why the margins are so high to cover dumping waste rather than discounting to clear which you might see occasionally.

        • DB Brown

          Interesting. Public awareness of their food's supply chain is certainly on the rise, and demand for specifics of production methods, ecological footprint, etc. It might be driven by urban liberals but they are a lot of the market and can dictate change.

          I think the days of supermarket chains existing as a cash gouger, rather than community provider, should be in decline. But we're yet to see if anything gets done about the reports/enquiries into their practises. Better regulation, more competition, better protections for producers…

          "Supermarkets dump huge amounts of produce because they want their shelves to look full it causes people to buy more.

          Fresh produce deteriorates rapidly so anything that looks limp is dumped."

          That's a problem. Brocolli is a health food, not a wallet fluffer.

        • Hongi Ika

          Depends how good your Produce Manager is, wastage is not great if you have a good buyer and Produce Manager. If there are quality issues they claim back against the supplier or the grower. The Supermarkets are in a no lose situation.

          • Tricledrown

            With centralised supply chains most produce is supplied from just 2 warehouses 1 in the North Island 1 in the South.

            The 2 main players foodstuffs have cut out local supply largely to reduce staff to one buyer rather than a whole office..

            Foodstuffs hid their profits by claiming only 4 cents in the dollar is made at corporate level.

            They put individual supermarket owners profit as wages as anybody who knows a supermarket franchise owner they make millions and pay the absolute minimum in wages.Turning over staff deliberately to minimise longterm costs.

            Woolworths NZ hide by importing lots of product from Australia keeping profits in Australia.

            • ghostwhowalksnz

              Not how Pak n Save works . Each store largely is supplied directly from the manufacturer. Thats what my local PnS does and its what I hear from the people in its warehouse

              That could be the opening , divestment of the Pakn Save Brand and to make it fair take out Woolworths 'Fresh Choice' brand as well

              Voila , a 3rd operator that can largely stand on its own

      • DB Brown 6.2.2

        Che! Winston aye. He did come up with some good stuff. Gold card, anybody…

    • Hongi Ika 6.3

      Exports are also Zero GST rated hence the NZ Consumer is at a disadvantage when competing with export product.

      • Tricledrown 6.3.1

        No every country in the OECD charges GST if we charged GST on exports our country would be at a huge disadvantage.

        • ghostwhowalksnz

          But imports have GST added at the moment they arrive over the border right to the point the plastic is swiped

    • Craig H 6.4

      As great as no GST charged on food sounds, there are no guarantees that supermarkets or other shops would actually pass on the full amount of the reduction either immediately, or later on after people stop looking (so maybe after a couple of years).

      • DB Brown 6.4.1

        This is similar to arguing against wage increases because landlords just put the rent up. You do have a point. Greed needs regulating.

        I think it was Rosemary yesterday talked about business as a servant, as opposed to master, of the population. This thinking is anathema to those who feel they are born to rule, but really, a business should be judged by the quality of its goods and services, not how much they've managed to take from us.

        • Craig H

          If it's regulated, why does it also need to be tax free?

          • DB Brown

            Removing GST wont make the food tax free, it would make it GST free.

            Regulations are necessary due to exactly the sort of thing you allude to in 6.4, where owners adjust prices to boost their own coffers rather than at least share with consumers. Or maybe they buy REALLY cheap food, and you get ill. No regulations – sucker!

            Left to their own devices, and without oversight, businesses that once served their communities may become parasitic behemoths that lobby governments to try and stop any mention of more regulations in order that they may grow and earn more and lobby even more. These sort of folk have lost sight, if they ever had it, of what service is.

            Regulations are a necessary evil.

            Bosses have a right to make money but workers have a right to a decent living & consumers have a right not to get ripped off. Ideally, this can all occur without needing regulating, but some people…

            Making good food cheaper in this manner directly affects the poor and working class the most. Especially parents feeding several mouths. It is a forward thinking holistic idea, to contribute to reduction in all manner of social harms that arise from poor food, or good food being too expensive.

            There's a lot of eggheads backed up the school lunch program because there's a lot of science pointing to the benefits of nutrition. This really would be a useful move.

            If business people are sitting there waiting on government moves to help fill their coffers, they're not very good business folk really, are they.

            • Craig H

              I don't have a problem with regulating food prices to within an inch of their lives so to speak, especially in light of the current ComCom enquiry into supermarkets, I just don't really see the point of zero-rating food as well unless there is a clear commitment as to how the money from GST on food will be replaced in the Budget.

              Reducing GST overall, adding a land tax, and upgrading the brackets and increasing income taxes in the higher brackets would be my preference to changing individual GST settings.

              • DB Brown

                I'm thinking along relatively simple lines – namely our basic human needs. Housing is under-taxed, but food is over-taxed. While more money in pockets may equate to better eating, it may also equate to simply more junk eating and obesity.

                The idea is to have fresh food effectively compete with processed and junk foods. It's a bit of number juggling, but that's not the point.

                How does it pay for itself?

                More money circulating in households weekly spend. Savings on food rolls on to other spending to help other businesses.

                Less heart disease, obesity, cancer, diabetes, auto immune diseases… all correlated to a gut microbiome enterotype (Bacteroides) associated with western (red meat and processed food heavy) diet.

                While the healthy enterotype associated with decreased risk in all of the above (Prevotella) is cultivated via the consumption of fresh whole foods.

                An accountant might not see it. They'd have to turn the ledger forward a few pages.

                • ghostwhowalksnz

                  When GST was implemented and each time it was raised there were specific increases to benefits to compensate for the loss of purchasing power

                  Rents for homes are never GST rated I dont see your point on that

            • Tricledrown

              We need to bring Aldi to NZ.

              They have less of a range but much cheaper and fresher because of high turnover.

        • Patricia Bremner

          DBBrown 6.41yesdevilThat was me 'Business as a servant not a master.' Many like Luxon think business do things better than Government. The market will provide. They had no planning to meet the covid pandemic and it was social government help they sought. Now they think they don't need goverment they can do it better. Read that as "back to skimming the cream' His tax changes would do just that.

          • DB Brown

            Such a good way of describing the difference between business (Servants) and parasites (Masters).

            Those whose aims are to serve their communities in good faith don't need PR teams and lawyers to justify their every move.

      • Hongi Ika 6.4.2

        Craig H I agree however it would give the small independent's the opportunity to gain some market share off Foodstuffs and Countdown who currently control 85-90% of the fresh fruit and vegetable trade here in NZ.

    • Patricia Bremner 6.5

      smiley Yes I agree with all your points. DB

      The gardening idea is something all can do even in an apartment. After a discussion with our son who lives in a flat and was missing fresh garden goods we looked up pod gardening.

      Rather than buy all the components he created his own raised pod garden, with a table a purchased green container $60 and door mesh cover supported on hinged struts. He grows some herbs tomato corgette lettuce spinach and spring onion. To make it look more attractive he has planted companion flowers marigolds etc in pots each end of the table. He topped the table with a piece of commercial vinyl. He layered the base of the container with charcoal and 3x20L of potting mix.

      The Whole thing broke even first year and saved him money from then on. He found family and friends would steer him towards which things grow best. The cover keeps out the neighbourhood cats!!

      When we lived and travelled round NZ as members of the NZMCA we had two bucket gardens Lettuce that you took leaves off spring onions parsley and radish.

      A small raised area planted as 30cm x 30 cm x 6. gives good room for 6 types of plant or more. Allows 6 plants at least in each.
      Micro greens are easy and rewarding to grow for salads.

      As to National, it is all austerity, coupled with partnerships with the wealthy who make money in good times and hold out their hand in bad times.

  7. Same old, same old nothing new or inspiring about how they are going to improve the Economy and peoples lives. Still reading out strategies and policies from the old edition of the Crosby Textor Hand Book.

    • tc 7.1

      Same old national, reward the top end, bash the welfare recipients, trash public transport etc.

      Bet he's hoping noone remembers All those state houses they flogged for purely ideological purposes.

      Health's still reeling from their last 2 innings.

      • Jester 7.1.1

        If the tax bands are adjusted correctly, why would this not reward the bottom earners?

        • Craig H

          I think this needs to be done as a system adjustment, but the biggest gains from the changes in brackets/bands go to those who earn the whole amount of the bracket or more i.e. higher income-earners get more out of them than lower-income earners in terms of total reduction in tax.

          As an example, for someone on $50,000 p.a., increasing the $48,000 threshold to $55,000 means $2,000 will be taxed at 17.5c/$1 rather than the current 30c/$1, which would save $250 p.a.

          For someone on $55,000, that would mean $7,000 taxed at 17.5c/$1 rather than the current 30c/$1, which would save $875 p.a.

          • Hongi Ika

            Which is 5/8ths of fuck all, the price of 2 x mocha latte's per week isn't going to put extra food on the table.

            • Craig H

              Indeed, which is why it needs to be done as a system adjustment alongside other measures, not as the principal measure.

      • Hongi Ika 7.1.2

        Neoliberalism the developers made some huge profits around Glen Innes, Panmure, Mt Wellington.

    • Tricledrown 7.2

      Funny that Christopher robbing Luxon has made statements that poor people can't pull themselves up by their boot straps!

      That labour is responsible for pulling the ladder up on the poor by removing the bottom rungs.

      His tax cut policy is exactly that only those earning over $50,000 will get maybe $15 a week those on $75,000 $20 a week .

      While those on under $40,000 the majority of NZers get nothing.

      Luxons ladder pulling as National always does!

      • Hongi Ika 7.2.1

        National = Just knocking out a few more rungs of the ladder, like they did last time, the tax cuts never benefited the poor, they got absolutely smashed last time when they gave tax cuts out mainly to the wealthy, and then they put GST up by 2.5%, Key actually thought he was clever. The lower income brackets were paying an extra 2.5% on their food & grocery bill, however were only getting an extra $10.00-$15.00 per week in their pay packets. So the tax cuts for the poor were neutralized by the increase of GST by 2.5%. The Key & National White Collar Voters in the higher tax bracket were the major beneficaries as an average family of 4 x people probably spends the same amount of money on food in the lower socio economic brackets and the higher income socio economic brackets, probably more so.

        However Tax Cuts win votes so Luxton is laying out the burley trail and ground bait early to get the voters interested by Election Date.

  8. Inflation is caused by profit taking by the Global Corporates.

  9. Sanctuary 9

    The problem isn't tax cuts, it as Mickey alludes to – the inability of modern centrist right parties to come up with policies that indicate they are remotely interested in governing seriously in the 21st century.

    National hasn't updated it's policy thrust for thirty years. It's caucus is instead dominated by Evangelicals who want to use culture war tropes imported from the USA – fantasy anti-communism, the equating of the softest of pink centrist managerialism of Labour with "socialism' as if that is the dirty word here it is in the United States, old fashioned beneficiary bashing and tax cuts that mainly benefit those who have passive incomes (rents) – to play to their base and not much else.

    Labour isn't an ideologically dynamic party. it simply offers a party concerned with taking government seriously, a technocratic managerialism coupled with responsible leadership. But at the moment, that is more than enough to easily command the middle ground.

  10. Blazer 10

    Tax cuts=a breath of stale air from Christopher Noggin.

    Also 'we care about people'… sincerity.

    Reversing the brightline test is an admission that the Natz crave property inflation.

    They are so bereft of any initiative,yet claim to be the party that attracts…'talent'.

  11. vto 11

    why doesn't Luxon also cancel the previous national government tax increases and reduce GST back to 12.5%.

    That was surely a far bigger tax increase than all labour ones since.

    Go on you deceiving and poor-bashing Luxon – do the honest thing

    • Hongi Ika 11.1

      Good idea reduce GST back to 12.5% that actually benefits the less well off in society.

      • ghostwhowalksnz 11.1.1

        So those who buy new houses and new cars 'are the less well off ? A single new house would pay the GST for supermarket shopping of say $250 pw for 20-30 years

        In practice a reduction like that wouldnt be passed through to customers for the everyday items

        • vto

          "In practice a reduction like that wouldnt be passed through to customers "

          Having been in business for way too long I have to disagree completely and utterly on that. In my own business prices would instantly be peeled back to get an advantage over competitors. It would very quickly settle to new lower levels. This part of competitive business does in fact work "in practice" like this, in my too-long experience

          • ghostwhowalksnz

            No so. I know that supermarkets and others already price point items not a 'spreadsheet price' to give exactly a margin over cost price.

            Many items are priced up or down unrealted to costs.

            For instance canned soups increase after easter as colder weather comes and drop after Labour weekend. Same goes for a beverage like tea bags, which we buy practically every week , it will be up 25c purely because of our demand not the cost

            • Hongi Ika

              Supermarkets charge the highest price they can extract from the market, The Department Managers in each section have a Gross Profit Target, Grocery 18%, Bakery 35%, Fresh Fruit & Vegetables 40-50% based on my experience working in FCMG.

          • DB Brown

            Where competition exists. Our duopoly do seem to jiggle prices about in a rather opportunistic manner.

            • Hongi Ika

              Definitely was not a good idea letting Countdown take over Foodtown, I think there would have been some palm greasing done there.

              • ghostwhowalksnz

                The dying days of the Shipley government, it was started then so couldnt be undone by the Clark government toughning of competition laws.

                Those were unusual cases of big firms buying policy from The national Government

                Im sure we will see it again when NZME does its grab of now NZ owned Stuff .

                The big accounting and law firms are ready with their legislation re-wording when National gets into power.

                Simon Power a lawyer with criminal court experience was given the job of Resources Minister exactly so the minerals on crown land legislation could be tailored for the big donors

    • Patricia Bremner 11.2

      yes vto.

  12. Most politican's and political parties are only interested in retaining power and their jobs for the next Election Cycle, so they can put on their suits and fly off to Wellington every week. Most don't give a rat's arse about the average New Zealander.

  13. ghostwhowalksnz 13

    National supported the 'light rail tax'. As of course they will as councils have been able to charge betterment taxes since the 1970s on highway and infrastructure changes that increase the value of land . A most recent one was the new bridge over the Waikato and a highway upgrade to a semi rural area that became desirable land for subdivision with the improved acess.

    National Party finance spokesman Simon Bridges said that while he didn’t support the light rail plan, he did support value capture schemes to fund major infrastructure projects. Future surrounding developments stand to make a lot of money off a big infrastructure project like this through the uplift in valuation and profitability it could provide.

  14. Barfly 14

    So Mr. Seven Houses Luxon wants the brightline test scrapped and interest deductibility restored on landlords house purchases financing costs.

    Conflict of interest anyone??

    • tc 14.1

      No conflict when your job is to ensure you and your peers do well at the expense of others.

  15. What Luxton owns seven houses you are kidding me ?

  16. Ed1 16

    Its a long way to the next election. This is a clear statement that traditional principles remain; it is all about money. Some of the ''promises'' may need to be modified in light of Labours profligacy in saving lives, they may be sufficient for some of the taps closed under Collins to be reopened to fund the National Party for the next election – with some of those coming from defectors to ACT . . .

  17. Tricledrown 17

    Hongi ikaWith centralised supply chains most produce is supplied from just 2 warehouses 1 in the North Island 1 in the South.

    The 2 main players foodstuffs have cut out local supply largely to reduce staff to one buyer rather than a whole office..

    Foodstuffs hid their profits by claiming only 4 cents in the dollar is made at corporate level.

    They put individual supermarket owners profit as wages as anybody who knows a supermarket franchise owner they make millions and pay the absolute minimum in wages.Turning over staff deliberately to minimise longterm costs.

    Woolworths NZ hide by importing lots of product from Australia keeping profits in Australia.

    • ghostwhowalksnz 17.1

      Yes. 'profit' is never a good measure of business'es money making ability.

      Cash flow and earnings and such are the real measures.

      Foodstuffs dont pay their owner operators 'wages' . The owner of the business but not the freehold or buildings pays rent and runs it as a private company and as such can have drawaings from thier own company.

      Once it was a no no to operate more than one supermarket and owners had to upgrade to a larger store if they wanted more money. Thats gone by the board as the earnings have grown so much that they are encouraged to get a second supermarket of similar size in the region. As when you buy a store you have to buy the entire stock and equipment, many millions now.

      A former All Black who become an owner -operator in Far North back in his home town, has another supermarket as well around Whangarei

      • Hongi Ika 17.1.1

        Having worked for one of the largest Supermarkets in the Auckland Area and having managed a couple of Departments within that store, I can tell you the Owners of these Supermarkets make some serious coin. They would make Jacinda's salary and Luxton's salary when he was at NZ look like Kitten Shit.

  18. Tricledrown 18

    National always promise tax cuts but only give them 6 months out from elections a sugar hit for the gullible middle classes .nothing but a few crumbs for the peasants with more user pays for the peasants such a prescription charge increases and also doctors visits.

    Then the next 3 yrs National use Austerity to cut the inflation tax cuts create so those who they are targeting those under $100,000 are much worse off without realising.

    Winston was sacked by Shipley for forcing National to make promised tax cuts early in the election cycle ruining the election year bribes.

  19. Corey Humm 19

    There's a couple things from this labour could steal that wouldn't bother me other than that it's typical Tory bollocks.

    Labours absolutely bonkers and plain electorally silly for ruling out changes to the tax brackets while National is promising to do just that, it's bonkers. National used to steal Labour policies all the time and that's why they were popular for so long. Labour seems stuck in its ways.

    Min wage workers should not be forced into higher tax brackets because a majority Labour govt can't be bothered. Silly and wrong and actually quite contemptible.

    The energetic, transformational, energy Ardern showed initially has gone and labour seems to be solely focused on managing the status quo and burning political capital on lofty constitutional stuff much of which isn't very popular.

    I emplore the govt to adjust the tax brackets. Wouldn't hurt to take gst off food either (was a labour party policy once) even for just six months to get through winter, labours going to be ripped to shreds this winter if it isn't a govt of action on these fronts.

    The fact the pm rejects that there's a living costs crisis in NZ is bizzare, there's been a crisis in living costs long, long long before this govt was elected.

    Considering what we've just been through with the looney tunes and wannabe insurrectionists outside parliament, I'd put the water reforms and hate speech reforms on the back burner for now, with the living costs crisis and the anti mandate lunatics out in force the last thing we need is hate speech legislation that the govt has struggled to define and defend and "she's taken your job, now she's taken your speech and now she's taking your water" recruiting more and more nutters and more and more demonstrations. Flag it, for now and focus on cost of living and housing.

    Don't give the right and nutters far more ammunition than they already have….

    Annnnd please for the love of god adjust the tax brackets

    • Hongi Ika 19.1

      Problem is there is a severe lack of talent or practical experience in the Labour Ranks these days, they have all been managing Covid over the past 2-3 years they have forgotten we actually have an economy and how it works. Corey Humm is 100% Correct Addressing the Basic Housing and the Cost of Living are the Two Critical Areas. Removing GST off fresh fruit and vegetables and necessary food items is a big vote winner, it was NZF Policy however Winston has been so busy with his court cases over his Financial Shennanagins that he has taken his eye off the ball and would rather be brawling in the Court Room with his Lawyer Brian Henry, than getting good policy through Parliament. Hopefully National will pick up the Removal of GST off Fresh Fruit and Vegetables and Essential Food Items.

      Housing is another story where we have building materials which are some of the most expensive in the Western World despite previously having a Wall Of Wood in Northland which foresters were worried about being able to sell. Something really screwy in the NZ Housing Market, there have been so many studies and reports done however nothing ever changes.

      • Ad 19.1.1

        Is Northland's "Wall of Wood" pruned and thinned so that it can actually be useful for the construction industry?

        It's not all going to get use as Triboard is it?

        If your forest is managed you get the good prices.

        If they aren't all you've got is a wall of wood.

  20. pat 20

    National/Act have been advocates of small government for years so tax cuts are no surprise….what is surprising is how often the average punter falls for it, even after we have had highlighted the impacts of underfunding of public services for decades.

    We get the government we deserve

    • Hongi Ika 20.1

      True we get what we deserve here in NZ and sensible voters vote for the least worst option, there is a severe lack of talent in Wellington and God Help this country if National and ACT get back in at the Next Election. NZF have good policy however we have a never ending Circus with Winston and his media controversies, hopefully they have elected a New Leader by the time the next Election comes around ? Winston should be in a Retirement Village in Whangarei.

  21. PsyclingLeft.Always 21

    "In terms of practical application of the bracket changes I think those are really, really important for working New Zealanders."

    This would mean those earning $45,000 would have an annual tax saving of $112, those on $ 55,000 would save $800 and those on $85,000 would save more than a grand.

    Wow. $112 Tax saving !! …….Well we can see who Mr Luxon is NOT vote buying.

    Oh and the ute tax. etc etc. Another header could be : Business leader conveniently forgets Labours Support and financial help.

    • Craig H 21.1

      Agree! Another header could be National Wants To Fight The 2017 Election Again.

  22. Ad 22

    Is this government really going to let the Commerce Commission ruling on the supermarket duopoly really slide when food inflation is spiking so high so fast?

    Why not open a political gift?

    What more political cover do these people need??

    • ghostwhowalksnz 22.1

      It could be a campaign theme for more action to differeniate from national rather than a pile on in now which means they spend the election defending it

  23. felix 23

    Thing is, the last time the Labour party had visionary leadership was in the 1980s. Unfortunately their visions turned out to be awful so ever since, the party has eschewed visionaries in favour of competent managers who pride themselves on maintaining the status quo and not fucking up too badly.

    Selfishness and greed may not be much of a philosophy but to paraphrase Walter Sobchak, at least it's an ethos.

    Don't underestimate this tax policy by writing it off as appealing only to the selfish and greedy when Labour is offering literally nothing but competent management.

    The near total absence of any vision whatsoever from Labour leaves a philosophical vacuum that National is only too happy to slide into with easy shallow promises.

    And the only way they won't get away with it again is if Labour comes up with a vision that's more compelling than selfishness and greed.

    And based on this government's performance to date I'm not going to be holding my breath.

    Also, if Labour don’t commit to compensating for bracket creep, they’re dead in the water. And that doesn’t even require vision.

    • Craig H 23.1

      Dr Cullen was visionary, albeit perhaps limited by what was politically acceptable. Working for Families, Kiwisaver and the NZ Super Fund are monuments to his vision even if he would liked to have gone further.

  24. higherstandard 24

    Labour offers competent management ?

    I know there's the need to make some positive noises on this blog but I think you're being too kind, many of the ministers have been utterly useless.

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