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Nats substitute tax cuts for economic plan

Written By: - Date published: 12:08 am, February 19th, 2010 - 21 comments
Categories: Economy, gst, tax - Tags: ,

An interesting piece from One News. Bill English gave another underwhelming speech on National’s economic plan, which basically boiled down to ‘tax cuts!’.

We assume that business people are obsessed with tax cuts too but that’s simplistic. A young businesswoman, Anna Hamilton-Manns, told English she wanted a real plan. His response was ‘tax cuts’. To which she said, “when you’re doing well, tax cuts is almost semantics” (ie. you get the benefits from the tax you pay in public services it provides you and your community). Hamilton-Manns said what she wants to see is an actual plan, not just reflexive tax cuts. It was a refreshing and intelligent outlook, and cuts to the heart the of the hollowness of National’s economic plan.

National automatically assumes that tax cuts will somehow lead to growth but they don’t seem to be able to explain how that happens. It reminds me of the South Park underwear gnomes:

  • phase 1) cut taxes.
  • phase 2) ?.
  • phase 3) growth!

Let’s be 100% clear on this. There is no evidence to suggest and no reason to think that the kind of tax changes National is talking about will improve New Zealand’s economy. Putting up GST on middle New Zealand to give tax cuts to the rich few and claiming that this will boost growth because it somehow induces the supposed businessman Atlases that ‘support’ us to work harder. It’s is just a re-hash of trickle-down economics without the name.

Trickle-down never worked and it won’t work now.It’s just an excuse for the rich to contribute less to the cost of governing the society that has enabled them to become wealthy in the first place. And actually many well-off people don’t want that. We are happy to pay our part for a better country.

Update: Anna Hamilton-Manns commented on this post

21 comments on “Nats substitute tax cuts for economic plan ”

  1. Draco T Bastard 1

    National and ACT are a bunch of simpletons. Roger Douglas and the Chicago School of economic (non) thought gave them an answer (Tax Cuts) in the 1980s and they’ve been harping on about them ever since. This is probably because of the failure of Muldoons’ time in office.

  2. He looked so lost and alone. I almost felt sorry for him, but then i remembered how he covered up his family trust involvement to try and screw rent money from the system…Shame !

    That Hamilton-Manns lady basically said, a tax cut is not enough of an incentive to keep her here and she’d be better of plying her trade overseas again, with the implication being, she’d probably make more paying the top tax rate and earning a shitload more overseas than she would grinding away here for less, even with the incoming reduced tax rate.

    I’m almost inclined to try my luck overseas as well.

  3. I have to agree with what this young woman said when you are doing well who cares if you are paying 33 or 38 cents. More and more people are going to take the hit sell up and go to Aussie.

    National have no economic plan never have done and the economy has not only stalled its been left to rot.

  4. Chris 4


  5. I always thought paying lots of tax was a sign of success.

    The right are very good at dressing up what is essentially greed in language that makes it not sound so bad. Phrases like “market forces” and “trickle down theory” are simply nicer phrases for the same thing.

    Good on Anna for actually asking for a proposal and for showing that our current emperors have no clothes.

  6. tc 6

    Here here Mickey…….you get paid more in Oz and you get taxed alot more…..this funds Oz’s education/health/infrastructure…..basic maths Blinglish and co ignore along with the MSM.

    TVNZ’s pretty graphic on tax rates after Johnny clowns sidestep tuesday ceased at the 70k bracket, beyond that Oz marginal rates are alot higher than NZ’s.

    NACT don’t want a CGT/land Tax (both decades old policies in Oz) so the wealth creation goes untaxed…….we live in a world of Finite resources and profit but NACT want large sections untaxed or reduced further as it’s the corporate tax take that’s hurt the inflows to govt coffers not GST/PAYE.

    A 100% relentless focus on doing stuff all except rewarding our backers…..as for the rest of you peasants bow down before your masters.

    The damage will take years to

  7. Zaphod Beeblebrox 7

    Its not a tax cut. It’s a redistribution of wealth. Unless we see govt investment in projects that improve productive enterprise GDP cannot go anywhere. Government cuts simply result in a vicious circle of contraction.

  8. J Mex 8

    I couldn’t believe Anna Hamilton-Manns got the air time she did and it’s a shame nobody could tell her what they probably really wanted to tell her. Conversation would have probably gone something like this:

    [Hamilton-Manns] But where’s my pony?
    [English] Sorry?
    [Hamilton-Manns] Where’s my pony? You mention tax cuts for business, but no pony for me. Please explain
    [English] Um…what business are you in?
    [Hamilton-Manns] Event management
    [English] What is that?
    [Hamilton-Manns] I run events for businesses. They spend their discretionary spending on running marketing and networking events
    [English] How is that going for you lately?
    [Hamilton-Manns] Bit rubbish actually. No businesses seem to have much discretionary spending right now.
    [English] Yes, businesses have cut down on that sort of, um, er, “extra” spending in NZ. That can happen in a recession. It isn’t limited to New Zealand. In fact, try running an events Management business in the US right now.
    [Hamilton-Manns] So, what are you doing about my pony?
    [English] Well, it’s very difficult to help a particular industry without adversely affecting another one. We think that it’s better to try and assist all business equally. Look – I’m responsible for providing a good general economic environment to help all business. I can do that by cutting unnessesary compliance cost, monetary policy and allowing businesses to keep more of the money they earn. These things well generally be good for business. I can’t hand out individual Ponies. In fact, this cut is the equivilant of a pro-rata pony to every business – Not just the “event management sector”
    [Hamilton-Manns] So you’re saying I should just quit and have kids?
    [Guy sitting next to Hamilton-Manns]Whoa! He never said anything about kids. He seems to be saying that he is going to try and supply generally good conditions for business and it is up to us for us to make our businesses work.
    [Hamilton-Manns] Well, if I can’t have a pony, I’m heading back off to Qatar! Why can’t we have a plan like Qatar?
    [English] Qatar grew by 11% last year through utilising their natural gas reserves and providing a low tax environment. Gerry Brownlee also has some ideas…

    • felix 8.1

      Wow J Mex, that’s like almost the exact opposite of the video!

    • Pascal's bookie 8.2

      shame nobody could tell her what they probably really wanted to tell her

      What was stopping them?

      • J Mex 8.2.1

        Probably, just the general facileness of politics.

        Hamilton-Manns economy of choice to emigrate to was an economy that taxes individuals and business somewhere between 0 and 10%. Yet Eddie holds her up as an example of someone refreshing and intelligent.

        I know Hamilton-Manns. Had English asked her for her ideas, she would likely have some up with some ideas that got Roger Douglas excited. Again, for Eddie to hold her up as an example of someone refreshing and intelligent is amusing and ironic. She is intelligent but not for any of the reasons that Eddie would suggest.

        Eddie seems to like her because she didn’t like English’s (plan) and is happy to leave it at that. If Eddie one day spent ten minutes talking to Hamilton-Manns about HER ideas to improve business and the common, he would treat her with disdain.

        • Pascal's bookie

          I have no doubt. I guess my point is that Hamilton-Manns’ line here is based on taking the National party’s rhetoric seriously. I have no idea if she actually does so, but her questioning is a direct response to National’s own marketing. That disconnect between what National is selling and what they’ve got, is starting to get noticed on multiple fronts.

          • J Mex

            You’ve got a woman who doesn’t think Nationals policy goes far enough.

            You’ve got a bunch of people on The Standard who think the changes go too far.

            You have nothing in common except that you dislike National’s plan.

            It’s like Rodney Hide stood up at the end of Bill English’s speech, and said “Sorry mate, but where’s the beef?”, and all the Standard commenters stood up and cheered – That is weird, no?

    • Bright Red 8.3

      I think the problem is that, unlike in your fantasy, English doesn’t have a plan, just tax cuts.

  9. aj 9

    I find myself in the uncomfortable place of agreeing with both J Mex and Bright Red 🙁

  10. Anna Hamilton-Manns 10

    Thank you Eddie for encapsulating in your piece the point I was trying to get across to Bill English, we need a robust economic plan that will drive economic growth for the benefit of us all. One of the symptoms of an underperforming economy that I questioned Bill around was the exodus of talent. Last decade this was referred to as the ‘brain drain’ it’s know an inconvenient truth. And I could go on, however it seems that the vast majority of people on this forum understand the issues.

    J Mex I thought the pony story was gold and appreciate the creativity, if only it had been that interesting. And if you know me as you say you do then I guess you would also know that I not only lived in Qatar, but also, Italy, England, Kuwait and South Africa, a real mix of economies and tax rates. If you however you ‘know’ me from watching a 3 minute news item I can completely understand why you would have formed the phony.. sorry ‘pony’ opinion of me that you have. It was sensationalised to create controversy, and clearly it has, as long as the debate around the performance of this government and their economic policy is ignited then being collateral damage is a small price to pay, I’d even be prepared to pay a rate of 38% :-). At any rate I think personal opinions on me are rather irrelevant to the discussion and to be quite honest it’s a little bit creepy to have someone claim they ‘know’ me while at the same time hiding behind a nom de plume.

    Eddie, I’d be happy to meet you for that chat as J-Mex suggested if you ever fancied it, I’ll be arriving on my new pony.

    And below a comment from Duncan Garner on the TV3 piece that he interviewed me for that I found on another site, let the debate continue.

    Thanks for listening.

    Comments [27]
    Duncan Garner
    20 Feb 2010 11:58a.m.
    I just want add some thoughts about Anna Hamilton-Manns as I was the reporter who met her and did the story. She, in my view is not a selfish, rich, spoilt brat at all. Her concerns are genuine and after I met her I, later that day, spent 20 minutes on the phone with her talking about what she would like to see happen in New Zealand. Anna wants more incentives for people and businesses and more economic growth. Economic growth is not sexy for our politicians to speak about, but it is crucial if we are keep everyone in well paid jobs. Anna told me tax cuts are great and part of that package, but not the only thing. She doesn’t mind paying tax – she told me so – she doesn’t have a selfish obsession with tax cuts at all. I thought it was courageous to front Bill English over his plans. I didn’t think English offered too much in his answers. He was slightly underwhelming. At so many of these events political parties get soft questions from their business mates. English and Key ran around the country saying they could stop the brain drain. Good on you Anna for trying to kep them honest.

    • lprent 10.1

      Thanks, our authors always value having feedback (and so do I).

      Thanks also for standing up and arguing with Bill English. That impressed me because you were arguing for a wider discussion about where and how we move the longer term direction of the economy. Somehow, like you, I don’t think that simply repeating the tax cut mantra as a sole method of effective economic direction is a particularly useful or intelligent response by this government. They certainly don’t appear to have any coherent ideas about the way forward, but seem to focus on what are essentially PR stunts selected more for the ability to become slogans than anything substantive.

      Unfortunately I don’t think that the government is particularly listening. They seem to be myopically focused on objectives that derive from more from the 90’s ideology (eg National Standards), rather than raising the skill levels and encouraging the business startups we need for the coming decades. Somehow they seem to think that tax cuts fix everything. It is kind of hard to see how (for instance) that translates into getting more startup capital available in the local market – something that stymies growth over the long term. 😈

      You get the impression that this government seems to think we’re all idiots that want to get sucked into meaningless slogans. That ain’t good because our best and brightest would leave just because they can’t stand a government that treats them as if they were stupid and doesn’t do anything meaningful to secure our future.

  11. Anna Hamilton-Manns 11

    You are only welcome 1prent.
    You’ve got the issues nailed, and much more succinctly than I could get across in the heat of the opportunity, however I think it must have got through to some extent. I met with Bill the following day and presented him a document with all the ideas and feedback that I had received from people since the Thursday screenings, I really hope he read them.

    Keep up the debate and democracy alive, I will be. 🙂

  12. if its broken - fix it 12

    the only FAIR solution to tax cuts is to remove all tax off the first $9000 earned, by everyone and anyone. The first $9000 in any income bracket, goes directly to living costs and is spent immediately in the daily ecenomy.

    It won’t happen of course, because the greed of high income earners has no awareness of the hardship that hundreds of thousands of New Zealanders struggle with every day

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