Associate Finance Minister Steven Joyce has dealt his government’s economic credibility a serious blow by attacking Labour’s costings of its fiscal plan and getting his own numbers wrong. David Cunliffe looks to be enjoying himself as he rips Joyce apart on Red Alert, in the Herald, and in the Dom. So much for Joyce’s dreams of succeeding English as Finance Minister.
From Cunliffe’s blog post:
First, Mr Joyce alleged that our tax plan had not replaced the capital value of the non-sale of SOEs: “You see Labour done a big lie, and said it is a choice of asset sales or their tax package. But they have not calculated for any increased borrowing through no sales”.
I love that Cunliffe has quoted from Kiwiblog and just attributed it to the real author, Joyce.
Our numbers do incorporate the asset sales revenue because it’s in National’s net debt track and our net debt track is based on theirs. Not getting that revenue is essentially the sole reason why our net debt track is above National’s in the first few years.
That graph from BR’s guest post yesterday shows the two parties’ net debt tracks.
Sure enough, Labour’s is about 1% of GDP higher than National’s at first from not getting in the money from asset sales but in the long-run, it’s below National’s because of the dividends and CGT.
Second Mr Joyce tried the line that we had not modelled in the cost of interest on debt. Wrong again. Interest costs are fully included.
Dear, oh, dear. Hope you didn’t run Mediaworks’ books yourself, Steven.
Third, he argued we would achieve “$0″ on our tax avoidance crackdown. Wrong again: IRD says there is $3.5 bn in collectable tax debt (of $5.5 bn total); and over $300m p.a. in avoidance through trust structures; as well as -$500m on the $200 bn invested in property. Bill English says there is $5 back for every extra $1 in IRD tax collection. IRD says 30:1. It all makes our provision that rises over 5 years up to $300m look pretty modest.
Three strikes and your credibility is out, Steven.
Finally, there’s this on Stuff:
Mr Cunliffe singled out National’s claim about the cost of a tax-free threshold for income up to $5000, which would give every taxpayer $525 extra a year.
Mr Joyce had claimed the policy would cost $2.2 billion more than Labour had budgeted over 12 years.
But Mr Cunliffe said National had used the wrong Treasury model, which took into account wage growth and the impact of taxpayers moving into higher tax brackets.
Neither affected the cost of a tax-free zone, which rose only as the population of taxpayers increased – something accounted for by Labour.
For National to be right, there would need to be more than a million extra taxpayers by 2024.
Christ. You know, when your tech staff forget to click a box on your youtube video to prevent related links coming up, that’s a little embarrassing. When your Associate Finance Minister is clueless about finance, that’s a disaster. Time for English to start looking for someone who is up to the job, methinks.
Hey, just a thought. When are we going to see National’s numbers on their economic policy? And, no, the Budget isn’t good enough because they haven’t counted the loss of dividends from asset sales. I hope National will be putting out real figures soon, and I hope they don’t get Steven Joyce to do the calculations.
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