Nats useless on economy

Written By: - Date published: 8:00 am, September 9th, 2014 - 49 comments
Categories: Economy, election 2014, national, tax - Tags: , , , ,

The Nats are useless on the economy, and their major election policies are getting hammered by editorial comment.

By way of context, the Nats have run up record debt. “Growth” is a consequence of temporary factors (Christchurch rebuild) which is why projected “growth” is in trouble as dairy prices fall. Meanwhile inequality in NZ is worse than most people realise.

National’s ideas for the economy? Well, according to Bill English, they haven’t got any:

But on a finance debate on The Nation this morning, Mr English failed to name one new thing he wanted to do in order to grow the economy.

That’s reassuring.

In the absence of new ideas, the Nats have turned to their one old one. Tax Cuts! Tax Cuts! Look over there! Tax Cuts! Oh dear:

Editorial: PM’s promise of tax cuts shows lack of judgment

As expected, the National Party’s announcement yesterday on proposed tax cuts was short on specifics and long on conditionality. Absent was an indication of how much any individual taxpayer might get in the hand, just a pointer to the cuts being “modest”. Further, said the Prime Minister, they would not apply before April 1, 2017, and be made then only if “economic and fiscal conditions apply”.

But that did not make the statement any less significant. Or diminish the degree of misjudgment. In any list of the incoming Government’s top priorities after the September 20 election, tax cuts should not rate a mention. …

Some have probably picked up on the apparent reservations of Bill English, who seems some distance from the Prime Minister on this issue. The dictates of strong economic management, the very focus of much of National’s election campaigning, support the Finance Minister’s view.

This is not a time for any party to be making tax cut pledges, whatever the provisos. Least of all one that boasts of its expertise in this area.

Even more pointed:

Nats fail hypocrisy test

John Key must think we came down in the last shower.

After days banging on about the fine detail of Labour’s capital gains tax policy National has released its ‘‘tax cut’’ plan with about as much detail as throwing paint at a barn door. …

The announcement also failed the hypocrisy test. National has included Labour’s tax credits in the Opposition’s ‘‘spending’’, but does not count its own tax cuts as spending. …

After demanding Labour and David Cunliffe explain various capital gains hypotheticals, along the lines of ‘‘what happens if I inherit a family house in a trust, move into into a rental but don’t get any income for a year, then live in it’’ Key and his finance minister’s tax cut plan shows amazing gall.

The other “big” Nat policy, pouring fuel on the house price fire, was also savaged by economists (and Treasury).

National is useless on the economy, and the sooner we the people wake up to this fact, the better off we will be..

49 comments on “Nats useless on economy”

  1. Enough is Enough 1

    “the sooner we the people wake up to this fact, the better off we will be”

    Hear Hear.

    11 days to wake up New Zealand.

    I am very afraid about this election. Very afraid.

    • Tom Gould 1.1

      But as Corin Dann interjected in a TV debate the other week, the economy is doing so well all we need is more of the same. With this level of propaganda, the facts no longer matter. It’s a rock star economy and everyone is doing well so long as these lazy dim-witted chooks keep lying to people, day after day.

    • Kiwiri 1.2

      Much greater intensity this time from those wanting to throw out Nats and they are expressing their distaste for the current government by way of advance voting in significantly higher numbers, I believe.

      The Nats are useless on the economy

      Nats are just really useless and so they resort to putting the ‘con’ into ‘economy’ such as by their tax-cut bullshit.

      • Colonial Viper 1.2.1

        expressing their distaste for the current government by way of advance voting in significantly higher numbers, I believe.

        I am cautious about that…in 2011 advance voting was noticeably up on 2008…yet overall turnout still proved to be depressed. And advanced voting in 2011 slightly favoured National: by 1%-2% compared to the overall result.

        • Kiwiri 1.2.1.1

          greater intensity does not necessarily translate into greater volume/overall numbers (whether in terms of total votes cast, or greater number cast against the party in power).

          And, for clarification, I was not stating the latter.

        • Tracey 1.2.1.2

          Perhaps nat voters are more likely tobe out of their electorate, or country on election day, socio economicallyspeaking?

          • Kiwiri 1.2.1.2.1

            Would be nice if there are advance voting figures for elections prior to 2011 to compare over the years, and to track against current figures and 2011’s.

            I had a quick search online but would appreciate if someone can point them out if those figures are readily available.

            Anyway, ten more voting days to go and all shall be revealed for the grand total.

            p.s. figures now out for 8 Sep:

            21,379 (2014) as compared with 8,893 (2011)

        • alwyn 1.2.1.3

          This is, I think, the first election where anyone can vote before election day.
          In previous elections you could only vote early if you were going to be, or at least claimed you were going to be, outside your electorate on election day. There are also it seems more places at which one can vote ahead of the day.
          Because of these reasons I would expect a lot more people to vote ahead of the actual day this year when compared with previous years. I cannot see that there is any reason to propose that it would have anything to do with the party that one preferred whether one chose to vote early.

          • Kiwiri 1.2.1.3.1

            Regarding your first sentence, that is my understanding and that might account for the much higher advance voting figures coming through.

            The number of places for advance voting seem to be about the same in the electorates that I have passed through. But I have not systematically looked up details and compared them.

            I return to the point I made at 1.2 and that is I sense much greater intensity this time to toss out the party in government.

            I cannot see that there is any reason to …

            Yeah, you had better not. Nothing to see here. Nothing to think about for another 11 days. Go back to bed.

            • alwyn 1.2.1.3.1.1

              I interpreted your statement
              “they are expressing their distaste for the current government by way of advance voting”
              as proposing that it was only people who want the Government out who were voting early. That is the bit I cannot see a reason for.
              You say here that
              “I sense much greater intensity this time to toss out the party in government.”
              That is quite possible but does it mean that these are the majority of those people who are choosing vote early?
              People who are voting early are, I would expect, those who are quite firm in their views and have no intention of changing their opinion, regardless of which party they favour and this would be independent of their desire to change the Government or not.
              If they give a party breakdown of early votes by party, after the election we may be able to determine the truth in a few weeks.

      • aerobubble 1.2.2

        Its finance. When the profits are into leveraging up another notch the smart (and stupid) all get into the language and thinking of finance. The economy has suffered from thirty years of growing the finance sector while infrastructure, society, people go backwards. The GFC essentially was the market failure reflecting this disparity, misalignment, schism. Yet our elites who have stump up the cost can’t let go since they dont know how to talk, think, any other way.

        • Colonial Viper 1.2.2.1

          It’s “moneybags logic” as Dmitry Orlov would say. Where everything in society, and indeed the world, is perceived solely from the frame of making money, financial value, and other capitalist prerogatives.

          To be more explicit: it’s a kind of delusional/dream world that you act out into the real world from.

          • Kiwiri 1.2.2.1.1

            Hi CV

            On your point further above, have a look at this 2011 news piece which reported more advance votes being cast then as compared to 2008:

            http://www.radionz.co.nz/news/election-2011/92157/advance-voting-higher-this-election

            National still formed the government in 2011, but I guess it can be said that the higher 2011 turnout narrowed National’s winning margin as compared to 2008?

            And the tide is leaving National even more so now than in 2011?

            If the percentage of advance voting keeps on at this rate (much significantly higher than the rate of 2011 in relation to 2008), might change be in the wind, sniff sniff?

  2. wyndham 2

    “Some have probably picked up on the apparent reservations of Bill English, who seems some distance from the Prime Minister on this issue. The dictates of strong economic management, the very focus of much of National’s election campaigning, support the Finance Minister’s view.”
    English was/is not in favour of tax cuts. The first mention of cuts came from Key when his nice guy persona was covered in slime from his delving into the mire of whaleoil.
    I suspect the idea was then pushed by the Nat’s election strategist Steven Joyce. The whole idea smacks of the arrogant Joyce – – – along the lines of “Toss the peasants another bone.”

  3. Lanthanide 3

    I think if this video could somehow be distilled down into 30 seconds (and obviously apply to NZ, not the US), it would win a left-wing government an election pretty easily: https://www.youtube.com/watch?v=QPKKQnijnsM

  4. Enough is Enough 4

    David C needs to be hammering Key on this.

    In both debates he has complimented the Nats on their economic management through the GFC and earthquakes.

    Who the heck is advising him to make those ridiculous and quite false comments.

    • AmaKiwi 4.1

      A lesson from my days in sales: If you want to change someone’s mind, don’t crash into them and demand they reverse direction. Instead, take their arm, walk along side of them, and then steadily ease them 180 degrees in your direction. That’s what David is doing. He gets on side with a minor compliment and before they know it he has steered them 180 degrees and are walking in his direction.

      Try it. It works.

      Yes, I am angry, too. But campaigning is about winning hearts and minds, not about venting one’s own anger.

      Watch the debate on TV3 tomorrow (Wed.) night at 8:40 pm.

      • Enough is Enough 4.1.1

        Key and English’s proposition to New Zealand is that they are steady responsible managers of the economy and have lead us through the GFC and earthquakes well hence why they should be retained.

        The last thing we want to do is agree to that yet I have heard Cunliffe do that twice.

        He doesn’t have to crash into that as you have said. But he sure as shit shouldn’t be supporting the proposition.

        • Hanswurst 4.1.1.1

          Key and English’s proposition to New Zealand is that they are steady responsible managers of the economy and have lead us through the GFC and earthquakes well hence why they should be retained.

          The last thing we want to do is agree to that yet I have heard Cunliffe do that twice.

          He hasn’t, actually. He made statements along the lines that he appreciated the hard work that Key + National had put in to steer the country through the GFC. It’s clear to me that the intended message is, “Mr. Key, I know you try, and you can be proud of the effort you put in. Have a gold star. Unfortunately, the results speak for themselves, and they suck balls.”

          It’s good in theory, because it allows people to keep a positive image of Key as a servant of the electorate while deciding that he just isn’t up to the job. However, I’m still somewhat ambivalent as to how effective Cunliffe’s framing of that has been. The “I know you try” bit came across quite clearly. I’m worried that the ballsucking bit might have got a bit lost, unfortunately – although I’m not sure.

  5. I am thinking that DC needs to hit Key on this, maybe call these tax cuts the 2017 election bribe? Which re-enforces how long until these so called cuts come into being. Maybe talk about the $ figure in 2017 $ adjusted for inflation? Also maybe the following line

    “So tell me John, How was it when Labour gave $10/week tax cuts in 2008[?] with debt paid off and strong budget surpluses they were irresponsible and laughable, but when National might give the same cut sometime in the future, maybe, it is fisically responsible even though debt is at record levels and any surplus is weak and dependent on the CHCH rebuild and volatile milk prices.”

  6. saarbo 6

    I still believe the attacks against Labour are driven by the CGT which will eventually and fairly transfer $billions from NZs lazy passive earning rich to areas that need it…This is balancing that NZ desperately needs and should have happened 20 years ago…and in this campaign I think we are seeing why it hasn’t.

  7. infused 7

    Tax Credit != Tax Cuts

    Tax Cuts is not spending.

    Who the hell wrote that?

    • Draco T Bastard 7.1

      Tax cuts are a decrease in government revenue and thus meet the definition of spending.

      • alwyn 7.1.1

        It doesn’t seem to meet any of the definitions in the article you link to.
        A tax cut isn’t disbursing money is it? It is not collecting the money in the first place. If you give me a tax cut it means that any money I earn has less taken out of it and passed onto the state. It doesn’t mean that they take the money off me and then pay it out as if the State is being generous.
        If you think it is spending just which definition that you link to qualifies for not collecting it at all?

        • McFlock 7.1.1.1

          But your honour, being in debt is when one has spent more than one earned. I merely earn less than I spend…

        • Draco T Bastard 7.1.1.2

          to pay out, disburse, or expend; dispose of (money, wealth, resources, etc.):

          Giving tax cuts is disposing of income.

          to use up, consume, or exhaust:

          Yep, giving tax cuts will certainly exhaust the governments income sooner causing the government to borrow even more.

          At the end of the day we do have to pay for what we use. We have massively increased government debt because we haven’t been and a large chunk of that .

          And you really should read The Myth of Ownership: Taxes and justice. It puts to rest the idea that taxes are taking something from you.

          • Nic the NZer 7.1.1.2.1

            Taxes are not government income in any meaningful sense. The government can spend with no income (because its the source and issuer of the currency). Govt currency is exactly like a debt (paying zero interest and always mature) in accounting terms. This pretty precisely shows that if the government had zero debt there would be no more money any more.

            • Draco T Bastard 7.1.1.2.1.1

              True but that’s not how things are done. We’ve been told for decades, if not centuries, that the government needs an income and so everyone believes it and so that is what our taxes are.

              That said, money needs to flow. The direction is out from the government as it spends into the economy and and back to the government as it destroys the money it first created. And that really is what taxes should be – the destruction of money.

              And then there’s the fact that an over accumulation of money into too few hands causes problems as those few a) try to buy up all the communities resources and b) then turn those resources into even more money for themselves. The system tat we have now which encourages this over accumulation must, absolutely must, result in extreme poverty for the majority of people and the rich turning into the aristocrats of a few centuries ago. We can see this happening now and Piketty shows us that it will accelerate while a NASA study shows that it is such an accumulation that inevitably results in the collapse of society.

              • Nic the NZer

                Economists used to be a lot more straight forward about this fact. But the big issue here is that what you (and I) have just described is not recognised by Joe public. Instead for a couple of decades ridiculus ideas like the NAIRU have been the actual justification for ‘balanced budgets’ and the public is miss-lead into believing that the govt might run out of money (it can’t). Once economics has to explain that their belief in the existance of hyper-rational inflation precient agents is the reason for keeping a good fraction of the workforce unemployed this can only disolve. Such ideas do not bear scrutiny.

  8. NZJester 8

    They are promising they might give them in 2017. You can bet cuts to other essentials or more asset sales will pay for those if they do go ahead with them.

  9. kiwigunner 9

    Of course the trick is frame them as Tax Cutters and Labour as Tax Takers. Tax Cuts mean service cuts. They mean increases elsewhere – time to remember Key’s promise of no increase in GST. They mean debt increases – time to recall where we were as a nation after nine years of Labour governments. They mean Key is a hypocrite because tax cuts are not targeted at low and middle income earners they benefit all taxpayers. They mean Key is a bullshitter – $10 tax cuts by labour fiscally irresponsible and cheap by his govt then wonderful news. call on decent NZ to reject their $10 and give it to those who need it – kiwis are kind they will do it.

    • Nic the NZer 9.1

      The govt can give out tax cuts without cuts to services if they want to. This is because money comes from the government, so they can essentially determine how much to spend at any time. The problem is that this government doesn’t want to run the economy that way, nothing more, nothing less. They would rather a large pool of unemployed which keeps a lid on wages and wage demands for employers instead.

      Notice when the economy tanked following 2008, this massively cut into govt revenue (as taxes are paid on income and profits so fluctuate with how well the economy is doing). Notice also that the government just went further into deficit, there was no pressing need to cut back spending due to income, in fact their spending increased at the same time. You or I can’t do that and would run into trouble with creditors if our income shrank by 20% or so suddenly. The household debt analogy which you are used to (and are implying here) doesn’t work the same way for a currency issuing government.

      Yes, this government behavior is why New Zealand can’t afford nice things!

  10. cogito 10

    http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=11321031&ref=rss
    “Key is deliberately confronting such households with what he calls a “stark choice” – more tax under Labour and its partners or less tax with National. National is expected to hammer that theme – especially in its advertising – in the run-up to Saturday week’s vote”.

    ….. and far too many ignorant kiwis will swallow it hook, line and sinker.

    • AmaKiwi 10.1

      Fear is all they’ve got.

      National is ashamed. Nicky Hager exposed them as corrupt. Their policies are trash. The Left is standing proud. We have the policies, the leaders, and our honor.

      Talk to your friends and neighbors. Call your local Labour/Green/Mana candidate. Offer to help with waving placards on street corners and anything else they need you to do.

      We have 11 days to make history. We can do it. On Sept. 15, Snowden and Dotcom will help us become a tidal wave.

      Do it now!

      • cogito 10.1.1

        Am doing all I can!

        Our family are all voting for a change of govt, and I’ve been lobbying friends and contacts and been along to events.

        Key has to go.

  11. Crunchtime 11

    I’ve heard tell by ex staffers at Stuff that the management there are very open about delivering this election to Key and National. That’s most of the nation’s newspapers, and many other media outlets.

    Their plans are starting to go a little awry.

    • Gosman 11.1

      I’ve heard tell by many that 911 was actually the work of the US government. Now if you had these ex-staffers actually come forward then you might be on to something. Otherwise you are just spouting errant nonsense.

      • Murray Olsen 11.1.1

        In a very deep, and very real sense, 11/9 was the work of the US government. The argument is whether the work they did was deliberate or not, or whether it was done over 60 years or much fewer.

        • Colonial Viper 11.1.1.1

          And that’s up to 11/9. The 100 days afterwards the fall of the twin towers were certainly very deliberate and purposeful.

  12. aerobubble 12

    The chilling effect of media bias….

    These things are bad things.

    Selling assets that return dividends.

    Borrowing vast sums.

    An Earthquake, its loss of growth, rebuilding insurance
    funds, and infrastructure, just to return to normal.

    Continuing housing bubble, needing six times income to buy
    a home!

    GFC sending many cash strapped kiwis home (Two dead in a WINZ
    office from one returned kiwi).

    These things are bad things.

    So why did Key give 40% of the tax cut to the top 10%,
    and zero to those at the bottom. Negative when you
    consider that the poor spend all and so get hit the
    worst by GST tax rises.

    Now we hear Key is going to lower taxes for lower and
    middle income earners. Wait, I don’t remember him promising
    the the tax cuts were going to the richest. In fact the
    media editors in TV, radio and print, who all take home
    massive incomes, have been telling us that the Key
    tax changes were neutral.

    So besides the media elites and Key’s government all
    stuffing money into their pockets in the middle of a
    world wide banking contraction, what good has Key done.

    Now, unions are out asking for more money, why didn’t
    anyone tell them that shifting the revenue burden on
    them, which is what is what happens when the 40% of the
    tax cut goes to the top 10% of income earners, and
    Key cuts on holds spending down, mens they have to pay
    more to make up the difference in lost services.

    It takes time to come into effect. So while NZ was
    experiencing huge export demand for dairy and logs,
    Key was stuffing the money into the hands of the richest
    10%. Worse selling off assets, running up debt, all
    during the middle of the GFC. Which remarkable for
    an export nation has little acknowledgement by the
    talking heads, Hoskins and Henry. Why because unlike
    most who can shift their incomes around, they immediately
    benefited by such tax cuts, and also support the National
    party, so have no bones with any counter arguments against
    neo-liberal excesses. Excesses to their mind are all good.

    Its like we’ve landed on the moon and the cheese makers,
    who still make great cheeese mind, just won’t acknowledge
    the fact, won’t pay up for the fuel costs getting there.
    The GFC, our moon landing, the end of being bound to one
    planet Key, leaves our media silent, worse, misinforming
    us about the effects of a GFC.

    What are these? Well the US and EU printing money. China
    swimming in the stuff. Our assets going cheap at zero
    interest rates to foreign buyers. While others have CGT,
    GST off food, and limits on foreign ownership. Our overlords,
    the editors of NZ, have pulled the blinds down on what it
    all means, have stacked the conversation, Hoskins and
    Henry, the blindest of all, and push them into our homes.
    They will not talk about the GFC, they are immune to
    criticism of neo-liberalism, they are even rewarded further
    by being good little neo-liberal party supporters.

    Our democracy is dead why our economic discourse is hijacked.
    Informed consent, anyone, do our media editors know what
    that means. Slater feeds the spin, the narrative trajectory,
    the frame that cannot be crossed and the media editors
    dutifully obliged.

    A parliament worth its salt would call all the editors
    of tv, radio and print into a inquiry room and ask, in
    front of cameras, wtf are you thinking not discussing the
    GFC. The pending housing debt, the farm debt, are now reality,
    Key has given the profit of our nation to the top 10%
    when that money should have gone into paying down PRIVATE debt!
    Instead Key borrows and sells to increase the tax cut
    to the top 10%, shoveling yet more money into their hands.

    Without a mandate, with the media declaring that its all neutral.
    English, its all neutral, trust me. No its was never neutral
    when it shifted the burden onto lower and middle class tax payers.
    Its creepy how now they are concern to give half a cheese
    brick back in three years time! I could have had a brick
    a week for the last six years if we all had not been lied too
    by our TV gatekeepers!

    I dont remember Key ever saying he was going to give the
    largest share of the tax cut to the top 10%. I don’t
    remember the media ever telling us this until now that
    it happened. I do however note that the media has gone
    out of its way not to discuss the GFC in every day news.

    Never have so few lied to so many Kiwis about their nations
    economy.

    These are bad things.

    Not being able to swim in the rivers like we could. This
    means to swim we pay to heat swimming pools!

    Why is Key such a shithead? Shit for brains? Even his
    ad has a two boat NZ, us and them, we are all in this together.
    Key does not believe that, he believe its the rich, who can
    afford a slick boat, and racing togs, against the rest.

  13. Enough is Enough 13

    Well done r0b

    You have obviously spooked Farrar

    He is spinning like a top with some very dubious statistics. What a chump.

    http://www.kiwiblog.co.nz/2014/09/issues_that_matter_-_the_economy.html

  14. Gosman 14

    Yet business is generally happier with National party policies than with the left it seems.

    • Draco T Bastard 14.1

      Which is weird because they always do better under Labour. This tells me that they’re all ideological idiots dismissing reality in favour of delusion.

      • Macro 14.1.1

        Yes and completely lacking in vision. Their mediocre aspirations are focused solely on increasing their own wealth at the expense of others and they fail to grasp the fundamental fact that all human growth, and development, is as the result of cooperation, rather than competition.
        Interestingly one of the “giants” of industrialisation, Henry Ford, had some perception of this reality and realised that there was no way his workers could afford the cars they manufactured unless he paid them accordingly. In doing so, he not only increased the workers self worth and circumstance, he also increased his market dramatically.
        But having said that – their were many other practices by Ford that were despicable. Just noting that in amongst the garbage of industrial ethical practise there are some little gems of wisdom.

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