Written By:
mickysavage - Date published:
9:06 am, January 31st, 2019 - 82 comments
Categories: auckland supercity, Economy, grant robertson, Media, national, newspapers, same old national, Simon Bridges, tax, the praiseworthy and the pitiful, transport, you couldn't make this shit up -
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National has laid out what will be its big policy next election and wouldntyaknowit it’s a tax cut. Or more accurately changes to the tax system so that bracket creep does not occur.
But get this. Not only is National going to build more motorways, give teachers a hefty pay rise, improve infrastructure so that raw sewerage is not pumped into hospital walls, pay down Crown debt but also give us some of our tax money back! They must be economic geniuses!
If you believe this there are ten bridges in Northland that I can sell you.
Grant Robertson describes how unlikely this is in this Herald article:
Robertson said National had to show how they would cover not only the $650 million hole, but also the “billions” needed to reach National’s debt-to-GDP target, its plan to improve state highways while also scrapping the Auckland regional fuel tax, and for more teachers’ pay – though National has not said how much more teachers should be paid.
“Ultimately they have to answer the question: What will they cut? Because they cannot afford what they’re saying they want to do,” Robertson said.
“Probably Simon Bridges has found Steven Joyce’s [$11 billion] fiscal hole in his backyard. All we’ve seen today from Simon Bridges is effectively a slogan … The National Party really is the dog barking at every car that goes by.”
…
A spokesman for National said the party would release its full fiscal policy – including its debt target – closer to the election.
Robertson also questioned whether the indexing policy for tax thresholds was worth it.
“If we take the numbers at face value, it is worth $8 per week to the average earner in 2021. For someone on $40,000 a year, it would be $1 per week.”
National also wants to consign Auckland to congestion hell by stopping the regional fuel tax. As Matt L points out at Greater Auckland this will stop $4.5 billion worth of projects from proceeding, projects as varied as bus priority improvements, ferry facilities, safety projects and possibly major roading projects like Mill Road and Penlink. The tax was to largely plug a rather large $5.9 billion dollar hole identified in the Auckland Transport Alignment Project. Without the tax ATAP is going to suffer.
Hopefully the media will subject the announcement to the same sort of scrutiny that it has in the past to Labour announcements. Although judging by this article by Kate Hawkesby critiquing the dress sense of two Labour MPs and criticising the presence of baby Neve at the caucus retreat I would not be confident. The article is the greatest waste of three minutes of my life I have ever experienced.
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Inflation indexing of the tax bands is not really cutting taxes. In fact it is merely stopping tax rising. If spending is reliant on increased tax take as a result then that spending should be looked at. I’d suggest the easiest way to account for it would be to ditch fee free tertiary education.
The money is in Treasury’s account forecasts so it is money that is programmed to be spent. Reducing this means the money will need to be found elsewhere or spending cut or debt will increase.
Yes Treasury is very good at accounting for tax rises.
So tax needs to be in line with treasuries predictions now so it can be spent by the government with no impediment
Stunningly Soviet of you Mickey. Well done
Gosman, no doubt your are familiar with Shakespeare’s quote,
“A rose by any other name would smell as sweet”
Apply that to Simon Bridges’ “tax adjustment”. In other words, “A tax cut by any other name, would still reduce tax”.
Frank it isn’t a tax cut. Let me put it to you this way. If inflation meant everything was increasing in price by 10 percent a year do you think you would be getting a pay rise if you received an 8 percent increase in your income?
Inflation is only bad when it raises the prices of goods and services, like housing and milk. Not when it increases the tax take to the government.
Then any efforts to lessen inflation need to be fully costed, treated as a cost and then derided. People can’t be trusted with more of their own money
“If inflation meant everything was increasing in price by 10 percent a year do you think you would be getting a pay rise if you received an 8 percent increase in your income?”
Yes, you would. The pay rise would be real. It just wouldn’t keep pace with inflation. Ie, the rise in pay would not match the rise in inflation.
The same with Bridges’ “tax adjustment”. It’s a tax cut by another name. The end result is the same: less money for the government.
Semantic game-playing doesn’t change the outcome, Gosman.
Does anybody really take Kate Hawkesby seriously?
Who’s Kate Hawkesby?
Kate Hawkesbury is Mrs Mike Hosking. Their style of writing is indistinguishable.
A reduction in tax will only lead to reduction in government services, especially those for low income earners. National’s tax cuts were funded by:
Ending free will services by Public Trust
Hiking prescription co-pays to $5
Slashing DOC’s budget, closing tracks and huts and outsourcing conservation
Restricting access to student loans
Tightening access to state housing, meaning people have to stay homeless or living in some shithole.
Purging hospital waiting lists
Tightening access to ACC claims
Freezing school operations grants and inreasing class sizes
Etc.
Between 1990 and 1998 National closed dozens of hospitals to pay for tax cuts. This has had the result of people in rural areas having to travel for treatment. They also closed down mental hospitals.
you forgot selling assets, destroying SOEs, bringing in almost a million migrants, driving down wages, destroying our public education system and undermining teachers no wonder no one wants to be one. And how many people have died prematurely because they couldn’t and didn’t get public health treatment. The list goes on in the meantime soimon has just offered us enough money to buy a pie and a cheap drink to wash down the pie what a cheap skate he is and a c…t
you forgot not paying into the cullen fund
I take it you also borrow money to put it into your savings account?
“If we take the numbers at face value, it is worth $8 per week to the average earner in 2021. For someone on $40,000 a year, it would be $1 per week.”
Not a problem from National’s perspective, since people on $40,000 tend not to vote National anyway. There are two planks to this:
1. It will offer significant tax cuts for people who earn a lot more than $70,000 a year, ie National’s core constituency.
2. It lets them take the moral high ground – they’re the stout fellows who’ll put a stop to inflation giving you effective tax increases.
Risky strategy though – easy to promise this when you’re the Opposition, a lot harder to deliver it when you’re the Government. Which is why they’re promising it now rather than delivered it when they were in government.
You seem to ignore that not all incomes are based on full-time jobs/employment. For example, the average weekly paid hours for female employees is around 30 hours.
national, trying to attract voters through greed.
Newsflash not everyone is in it for themselves these days.
Didn’t work last election, our population is evolving, well being for all is a greater priority than a monetary bribe.
Very excited for the well being budget.
Watched a doco the other night on Al Jazeera, called “Growing Pains”, it questioned why a country measures their success by GDP, rather than by the well being of it’s people/environment. Resonated strongly for me. Will find the link.
“A look at the global and political obsession with economic growth and the ecological and humanitarian consequences.”
https://www.aljazeera.com/programmes/specialseries/2019/01/growing-pains-ecological-cost-insatiable-economy-190121045037084.html
As for crusty kate hawesby, bitching about clothing style and a baby will not win people over. It reeks of jealousy, shallowness and insecurity. Newsflash kate, you ain’t all that.
kate and her husband are shallow , bitchy and irrelevant but so are many NZders
Well it has been 24 hours, but I still can’t get my head around the left being against this.
a) It isn’t that expensive in the grand scheme of things
b) It isn’t even a tax cut
c) It affects lower paid workers for the good more than anyone else
Wonder what it is then
Oh. It’s National that want to do it. Must be bad.
Try reading the post. It will illuminate you, answer your question, and you will look less like a stupid dickhead troll.
Spot the sensitive one
[lprent: Try reading the comment – ignorant dipshit. I didn’t write the post. I just responded to a stupid troll who clearly hadn’t read the post. The post that addresses exactly the point you tried to raise. If you can’t address the post, then don’t comment here. Next time I won’t be so tolerant. ]
“Stupid dickhead troll.”
One of LPrents greatest hits.
Lynn well into his sixtieth decade and still unable to rein in his inherent cuntitude.
[lprent: It appears that I lack your degree in senility. Having problems remembering magnitudes of numbers eh? ]
Lprent is 600 years old? No wonder he’s grumpy 😉
That’s a shitload of candles on his next mega-cake!!
Or more accurately changes to the tax system so that bracket creep does not occur.
FFS! Everyone knows this is a simple, logical fucking tax reform that should have been done at least a decade ago when Dr Cullen floated it. Or even earlier. But every damned govt and opposition get involved in play brain dead idiotic point scoring games with it. Stupid, stupid.
Now is the perfect moment for Labour to just quietly do it in the next budget, get it done and off the table.
Cullen was wrong. It’s a perfectly reasonable way to store up some money over the three years to fund party manifestos – without resort to borrowing.
The perennial choice tax cuts (and if so targeted to families or not) or spending (state housing, education health etc).
PS Adjusting the tax scales for inflation when there was a recession would just make the budget situation worse.
But at some point shifting your tax thresholds to adjust for inflation has to be done; doing it automatically in small increments every year is the smart way to do it.
Smart for everyone except the innumerable payroll systems sitting out there. They all have be updated synchronously for hundreds of thousands of sites.
This is a major expense not only to do it, but also to check that it has been done.
That is the main reason that bounds are shifted occasionally rather than frequently.
“except the innumerable payroll systems sitting out there. They all have be updated synchronously for hundreds of thousands of sites”
well in that case they are really badly written payroll systems.
the easy way to handle a variable like that is to hold it on file and reference it from there when it’s needed, then when the variable changes it’s a five minute job or less for the operator to change it on file. no software changes needed.
hard coding the crossover points is lazy and stupid.
when gst was introduced and i had to update my software, i put the percentage on a control record, not believing their promises that it would never be more than 10%, and also included a changeover date.
then when it went to 12.5% no more changes were needed in the software at all.
also i allowed for different rates for different products, fortunately that has never been needed.
Lazy and stupid is frequently the refuge of the overworked, lowest-bidding contractor.
Sure that is what any system should do. That isn’t what usually happens even if that was built in.
There are about 144k organisations in NZ with less than 20 employees (see my comment at 7.1.1.1.2.1). Most of them have in-house payroll entry of varying calibre ranging from hand-jobs with a calculator to online bureau services like Xero. The only thing that you can be reasonably be sure of is that there are thousands of different payroll systems out there in this layer of our economy and few are run well.
Virtually none of the staff or employers in that level of organisation doing the payroll is competent at it or has any idea where to change rates or even how to load a software upgrade with those settings. Most have been doing the procedure from rote for something that someone else set up long ago.
Getting every small organisation on the same tax page when there are changes happen is a frigging nightmare. Just mailing them and their accountants is a major task. You should have seen the level of repeated paperwork that goes out everytime that there is a tax change.
Just updating the unconnected systems gives a collossal lot of additional site support work to accounting firms, business IT companies, tax companies and peoples nephews… And there aren’t enough of them.
Which is why change to taxes and especially payrolls happen so seldom. Too many companies here with very small businesses.
[Lots of little enterprises/companies] here with very small businesses.
(I am sure that it isn’t a case of suggesting that there shouldn’t be many small businesses, and always more getting going, and lasting out there juvenile stage of say three years.)
I have just had an example of how micro-small businesses can’t manage their computerised systems, internet etc. I had to send something through to Christchurch, decided to fax it. Had the fax number taken from the internet site. Had phoned the company and knew that number was right, so assumed fax number ok also. The shop helped me in the end, by phoning the company as to why the fax wasn’t going through. Answer, they didn’t have the fax any more.
There must be lots of companies with incorrect information, outdated information on their internet sites. I suggest that we have a nation-wide date of 1 April (the jokey date would stick in people’s minds), and on that date companies or other entities would check their internet details and the outdated ones would be changed by some tech-capable person. Good idea! We could do this if we wanted to be effective and efficient.
Remember – spread the idea 1 April to update your details or you’re a fool!
[There are lots of little enterprises/companies] here with [that are] very small businesses.
(I am sure that it isn’t a case of suggesting that there shouldn’t be many small businesses, and always more getting going, and lasting out there juvenile stage of say three years.)
I have just had an example of how micro-small businesses can’t manage their computerised systems, internet etc. I had to send something through to Christchurch, decided to fax it. Had the fax number taken from the internet site. Had phoned the company and knew that number was right, so assumed fax number ok also. The shop helped me in the end, by phoning the company as to why the fax wasn’t going through. Answer, they didn’t have the fax any more.
There must be lots of companies with incorrect information, outdated information on their internet sites. I suggest that we have a nation-wide date of 1 April (the jokey date would stick in people’s minds), and on that date companies or other entities would check their internet details and the outdated ones would be changed by some tech-capable person. Good idea! We could do this if we wanted to be effective and efficient.
Remember – spread the idea 1 April to update your details or be regarded as a fool.
While I hesitate to point to the US as exemplar of anything (except shitty international behaviour), US tax brackets, standard deductions and a whole bunch of other tax/payroll things get updated every year and have done so for decades. In the nine years I was working there I never saw so much as a hiccup from those annual adjustments.
There is a pretty good reason for that. The scale of the economic units in the US are far larger. That means that the various tax departments have a lot more scale, the accountants have more scale and there are a far large number of employees in the ‘small’ enterprises.
In NZ we collect off most taxes off PAYE, GST, and business taxes.
https://www.oecd.org/ctp/tax-policy/revenue-statistics-new-zealand.pdf
Basically in 2016, 37% personal income tax, 38% GST, and a mere 16% in company taxes.
Looking at the info below for NZ, it becomes pretty evident that
1. There are about 550 thousand taxable organisations in NZ. The US with its vastly larger population has something like 16 million.
2. The half of the employees in the top 2500 odd enterprises in NZare easy to reach, and that is what infused is talking about further down.
3. But in NZ there are about 144 thousand enterprises paying between 1 and 19 employees. From memory (too damn late to look it up) those small companies comprise more than 30% of all employees in NZ and a slightly higher proportion of the personal income tax take.
Those are the organisations that are so hard for the IRD to reach when there are tax changes and there are shit load of them. Every time there are tax changes in that level of company, there is a pretty high degree of chaos. Just ask any accountant who deals with them. Part of that is because per organisation there are vastly fewer accountants and IRD staff to service and inform them.
When you look at the tax take in the US you’ll find that the estimates of the payroll taxes from less than 20 employee companies is teeny. Almost all of the tax take is either from companies that are vastly larger than our largest.
https://www.naics.com/business-lists/counts-by-company-size/
From what I have heard about the US very small businesses is that they really are the grey area of the tax take there. They tend to either be part of the grey economy or to farm out payroll out to service companies who have economies of scale. We don’t have that scale and those kinds of services here because they aren’t profitable.
//—————————–
https://www.stats.govt.nz/information-releases/new-zealand-business-demography-statistics-at-february-2018
maybe if you had anything to do with writing it. shit ain’t that hard, lprent. even doign calculations on 5m+ people. If systems these days can’t handle this, someone needs to be shot.
I don’t think they can shoot that many HR admins and small business owner-operators.
I guess that you’ve never had to update thousands of systems (often manual systems) at small businesses remotely? It sounds like quite a significiant gap in your professional education. Ah but I forgot, you’re just a mere operator who appears to have virtually no idea on how businesses operate (and an self-over-rated opinion of your own skills).
It isn’t bad if they are running a centrally connected network system. However the market opportunity for the likes of Xero and MYOB online is still to replace the large numbers of stand alone systems. It is because there are a shitload of them out there. There are still at least two standalones in operation for every network connected one. And one of those standalones is probably a manual system.
That is because once a accounting system, manual or computerised, goes into a SME, they tend to just keep using the same system with periodic updates from their accountants. If it works then they don’t break it. Most didn’t have computerised payrolls then, and I seldom run across businesses with less than 10 employees who do now.
BTW: I’ve never written an accounting system or even part of one. After I became a programmer I deliberately avoided getting involved in coding that kind of work.
That was because I did spend a few years supporting a couple of accounting systems including payroll for SMEs about the time that GST was being rolled out. It gave me a whole new appreciation for just how limited the accounting systems and the IT support was in this style of organisation.
At that point virtually none of them had computerised accounting systems – they just passed boxes of paper to their accountants. Many of them still do.
Good heavens infused maybe there is something in the world that you are not an expert at. Maybe lprent and others do know what they are talking about.
Only if one favours across the board tax cuts rather than to families, or tax cuts to government spending.
Which one could sumarise as of a bi-partisan trend to the right in fiscal policy.
If you want to direct tax into particular areas (either by tax reductions or spending) then say so in your policy and make it explicit in the system.
Trying to achieve these outcomes by letting inflation do your work for you just kicks the can down the road and feels dishonest.
Bringing in such a system speaks to an acceptance that government is adequately funded as it is. Which is not true.
We apparently cannot afford to do much about low paid education and health staff, lack of adult dental health cover, poorly resourced Pharmac, underfunded conservation and environment estates and a relative decline in social housing because of population growth.
The talk is about efficient systems redlogix not about whether it looks okay to you. Inflation happens and needs to be factored into the system, and it can be explained within the summary of the program, so there is open
information, no hint of dishonesty.
Free Tertiary Education and Regional Growth Fund are the two that I would expect to be gone by lunchtime
Free? Who pays for this free stuff?
yo momma
so you don’t care about our regions or our young people getting a step up on the ladder enough is enough what a selfish person you are
It has nothing to do with what I care about. I am answering Greg’s question.
That is what National will campaign on
Enough is Enough
When you make sarcastic comments like that please put /sarc – it is very discouraging for people distressed by the decline in conditions in NZ to read apparent agreement with this decline. Most here want to see improvements with a rise and balance of tax and spending on public services improved.
Labour suggesting National doesn’t know how to run the crown accounts is jumping the shark. Not a credible proposition for Labour to run.
The usual Labour attacks lines on health, education, etc are seen as more believable, not Labour being better on the accounts.
Wayne
Jumping the shark is maliciously inventing an $11 billion hole. Any party that resorts to that has zero credibility when it comes to economic and financial management.
You seem to be suggesting that National M.P’s have some real ability to run Crown accounts,irrespective of any experience doing so.
Do you base this on what is really meaningless P.R…’a safe pair of hands’-‘sound economic managers’?
Their overall record does not withstand objective scrutiny as to being any more effective than other parties.
That whole National is better for the accounts thing is a bullshit myth that’s been successfully perpetuated by mindless repetition over and over and over again.
It falls apart pretty quickly whenever anyone takes a serious look at the actual numbers.
Absolutely agree with you on that Andre.
“more believable”?
in spite of the fact that Labour is demonstrably much better at running the accounts.
Wayne, WOW You don’t say. Yet even Bill English admitted the books he inherited from Labour and Cullen were healthy. The big muck-up was Muldoon and National.
History doesn’t agree with you (H owever I hope you’re battling on ok)
Re-baby Neve, she went on to infer the presence of a seven month old baby as… weird.
Well, tit for tat time:
Anyone know what Ms Hawkesby’s teenage kids are getting up to these days? Any photos maybe?
You realise this is just a little tickle to see what the reaction will be?
Given Grant’s forthright response, Labour jumped the polling shark seems like quite a pertinent summary.
I guess Simon will show the money when Labour shows the houses.
The short answer is ending bracket creep is gradual (annual reduction in tax revenue). and is thus affordable.
Afforded by
1. having no money to fully staff hospitals and schools and improve wage levels
2. no money to increase state housing despite population growth
3. funding for Pharmac still restricted
3. no contingency for such things as fair pay etc
Thus they intend to govern in the future as they did “because of the GFC and earthquakes” without the GFC and earthquakes.
PS Mrs Hosking is a support act to National’s dandy, so their various shills are set on
1. gaming the Speaker
2. targeting the Immigration minister and policy
3. attacking the PM as a mother (Brash tried the other approach on Clark)
Part of the reason for targeting the “Immigration” Minister may be the move to fair pay awards.
Any hope of the our esteemed media asking serious questions around this policy is dead in the water because Tobah O’brian on Newshub gave it a glowing endorsement and everyone else with her included are bagging Twyford and the kiwi build lack of progress in achieving the numbers promised.
Nationals evil MP’S and their destructive behaviour has been dropped after one outing.
Nationals friends are are there in support for another year.
How Kate Hawkesbeak can take the piss out of anyone for their dress sense when she’s married to a serial bad taste offender like Hosking is beyond me.
Tories have no sense of their own innate vulgarity.
Ironic really, since they believe they are superior.
It’s seems very cowardly from Mickey that he would own a post titled “Show us the money Simon”, about a theoretical application of a taxation policy in 3 years time versus writing an opinion piece titled “Show us the houses Jacinda.”
Stop being a boy and grow some fkn balls.
Yeah, the election win caught them by surprise.
I think Twyford’s hangover would of been percolating with the thought ‘Cripes I need 2000 qualified builders willing to pull on a Kiwibuild T-Shirt and I’ve been bagging the crap out of immigration.’
All wannabe governments promise plenty. It’s usually an indication of what they’re going to be gas-bagging on about for the next 18 months rather than anything they’d actually achieve.
I see if John Tamihere wins the Auckland mayoralty he will rid the city of homelessness inside 2 years.
he will take the kiwi saver tax credit that is collected from the employer contribution.
Announce whatever you like then if you’re not going to achieve it just just announce a recalibration 😉
Owning the requirement for alterations is not a negative thing.
Every big task I’ve set off on has required adjustments along the way. The important things don’t roll over and die. They keep the fire burning. The admission that ‘OK, we need to make some changes here’ is no reason to bin the ultimate goal. This is what quitters do.
So basically a political party can say anything they like to get into power
Maybe we could call that marketing…. and add it too the reference manual?
The national Party Thesaurus of Propaganda… coming to a book store near you 🙂
PR 20.1.1 “basically a political party can say anything they like to gain power,”
No, not now.
The electorate had so many lies elections 2008 2011 and 2014 they now react unfavourably to a reboot of a plan, as they have become cynical about politicians motives.
This is a decision to amalgamate the ideas of improving the number houses.
Minister Twyford has had to revisit Kiwibuild because of a changing market.
Why has the market changed? The Government ban on buying houses by non resident foreign owners made a 20% difference to the Auckland Market, but no discernible difference to the regions according to One Roof a Real Estate’s collective.
Phil noted this and a small drop in the required bank deposit for first time buyers has seen a rise in their applications. At the same time a huge squeeze has gone on rental accommodation prices forcing a review of the H.N.Z house programme.
By bringing them under a common umbrella and giving the new entity increased powers of acquisition, he is set to ramp up the programme.
Not to stop it. There will be more houses not less.
“There will be more houses not less.”
Wow
“Minister Twyford has had to revisit Kiwibuild because of a changing market.”
And yet you go on to say that the reason the market has changed is because of policy implemented by THIS government…
“Why has the market changed? The Government ban on buying houses by non resident foreign owners made a 20% difference to the Auckland Market…”
As it is you have it completely wrong. The reason the KiwiBuild targets are being revisited is because Labour overpromised and under delivered, despite this being a key policy platform of the party for many years. Why didn’t they know the market would change? Why didn’t they know about the capacity constraints in the building industry? Or the serious problems imposed by Auckland City’s unwillingness to allow more sprawl?
Because this policy is being run by fools who have no idea about how houses get built.
I think our government could be doing more with what enjoys popular support and separates them from the sort of lines Simon will run.
eg: Let the Nats crow about 2000 extra policemen.
Every Kiwi would like to see those 2000 with nothing to do. A left approach is to taint the attraction of pursuing a life of crime. The creation of more attractive options.
The devil finds work for idle hands.
Mayor Tim used to entice students to study at his local tertiary facility with the offer of the first year’s fees on the house.
Our government’s initiative killed Tim’s unique enrollment magnet.
I see in a fresh ad Tim is stood infront of an accommodation block and with a hand gesture says “You can stay here free while you study.”
Our government is triggering differences that has us moving in the right direction: Opportunity Equality.
Kiwibuild reeks of an opportunity to secure a Labour/Green win next time at the polls.
Phil needs to focus on transport…I think it’s a portfolio big enough for 3 ministers.
“We got this wrong and this is what we’re going to do about it.” These are not the words of failure.
A few more state houses in the mix won’t lose an election. Pitched the right way, it’ll win them one. We all want to see battlers getting a leg up.
Rather than a 6 o’clock news item featuring the minister standing at a new front door, get the news crews to tag along while the minister asks a farmer, so how much do you want for this 300 acres? Next week, an artists impression in the paper. Next week, the news crews filming the infrastructure being laid.
Get it cracking and win an election.
Pepper the news releases with stories like ‘Yep, Kiwibuild developers can use the half price plasterboard price the govt negotiated for them in their non Kiwibuild developments.’
Make me want to be a Kiwibuild make it happen guy.
labour were pretty good at not answering this question for 9 years.
Aww, diddums.