Tax cut cynicism

Written By: - Date published: 6:20 pm, August 25th, 2014 - 51 comments
Categories: bill english, election 2014, john key, same old national, tax - Tags: ,

The kind of waffle John Key is trying to spin around the topic of tax cuts is breathtaking. There might be room for tax cuts, but he can’t promise anything, but maybe they’ll see, and Bill English saying there won’t be tax cuts was both true and untrue at the same time, like a fiscal Schroedinger’s Cat.

National seem to be running on pure instinct at the moment, and unfortunately their instincts are messed up. For six years they’ve had a brilliant strategy:

  1. John Key is nice but non-committal
  2. Be relentlessly negative through proxies like Cameron Slater
  3. We can manage the economy, Labour can’t
    3a. Tax cuts!

Unfortunately 2 has been blown to pieces by Nicky Hager, 1 is crumbling fast under relentlessly gallery demands for yes/no answers, and 3 is being torn apart by conflicting tactics.

On the one hand, Bill English has decided that the smart move is to reject the idea of tax cuts. Play the “narrow surplus” card. Get Steven Joyce to constantly emphasise that Labour are trying to spend too much money and threaten our whole economic future in the process. Downplay any suggestion of a pre-election lolly scramble. Be the sensible economic managers.

On the other, there’s a crisis developing for National. Their support is still incredibly strong, but it’s slowly slipping away, and history tells us it’s all downhill from here. They have almost no credible coalition partners on their side, and their two middle-of-the-road options come with either a Winston Peters or Tame Iti sting in the tail. They seem genuinely worried that their supporters won’t bother to show up on election day. They’re on the brink of becoming our first biggest-party-in-Opposition under MMP.

And because they’ve been working on autopilot for years, the old instinct is kicking in: promise tax cuts. Even though it completely undermines everything the Minister of Finance has been saying, even though what National really don’t need at the moment is to look cynical or desperate.

The last thing they should be doing is adding fuel to the “National are tricky” bonfire – first “talking to me just means talking to my office”, and now “when he said a package he meant a specific package, not a package.”

51 comments on “Tax cut cynicism”

  1. mickysavage 1

    For a while I have been mentally parsing everything that Key says because he always seems to push the truth of what he says to the limit. It seems now from talking around that a lot more people are doing the same. Key is really pushing the truth here, trying to suggest that Labour is reckless with funds when it is clearly trying to be really careful, yet his suggestion of tax cuts is as reckless financially as you can get.

    As you say interesting times Stephanie …

    • Bob 1.1

      Bill English said there won’t be tax cuts, John Key says he can’t rule out adjusting tax thresholds.
      http://www.stuff.co.nz/national/politics/10421122/Nationals-tax-cut-mixed-message
      Adjusting tax thresholds is…well adjusting tax thresholds, no change to the tax rates i.e tax cuts.
      Come on Mickysavage, you know the difference between threshold changes and tax cuts!

      Even if they were looking at tax cuts, how is that reckless financially? http://www.businessinsider.com.au/sweden-anders-borg-2012-4

      • mickysavage 1.1.1

        Well bob there is no difference to adjusting thresholds and tax cuts. They both involve giving some people more money that the State could otherwise use.

        It is financially reckless because we now have about $80 billion of debt whereas 6 years ago in net terms we had none.

        • Bob 1.1.1.1

          “They both involve giving some people more money that the State could otherwise use”
          You really need a lesson in tax! When have you ever been ‘given’ tax? Firstly, tax is taken, not given. Secondly, increasing the thresholds at the rate of income inflation is neutral as you are simply taking the same amount of tax as you were previously, while leaving pay increases in peoples back pockets. Taking the same amount of tax is NOT a tax cut.

          “They both involve giving some people more money that the State could otherwise use.” Why doesn’t the state just take all of our money then?

          “It is financially reckless because we now have about $80 billion of debt whereas 6 years ago in net terms we had none.” Did you even read the link I gave you? Try this one instead then: http://www.spectator.co.uk/features/7779228/swedens-secret-recipe/

          • McFlock 1.1.1.1.1

            We could get into a bigarse semantic argument, but really all you’re doing, bob, is taking slippery-johnny’s weasel words and finding the sole, narrow interpretation where they might actually be consistent with blinglish’s.

            I mean, it’s not like any adjustment they make if reelected will exactly match inflation. It’s a dynnamik invirinmint, after all.

          • tricledrown 1.1.1.1.2

            Bob the drowning in your own argument why not take no tax at all no roads ,no police ,no hospitals,no schools to educate dumrses like yourself !
            38% of all money spent in the economy comes from taxes take that away our economy would collapse like what happened in Argentina 1996-97 when just about all taxes were cut!
            ACT were using Argentina as an example of how good low tax economies work half way through the 1997 NZ elections no mention of Argentina ever again by your ACT mates!
            Bob
            Now looking at the US economy state by state Bob high tax states have low debt better health care Lower unemployment all have economic growth!
            Bob States in the US that have low tax have higher debt higher unemployment poor healthcare
            economic stagnation!
            Bob California after years and years of Austerity finally put Jerry Brown(Linda Ronstadts ex)
            Brown increased Taxes and solved California’s Massive debt problem after years of tax cuts by dumbarse Tories rule!
            Bob Desperado!

            • Bob 1.1.1.1.2.1

              “Bob the drowning in your own argument why not take no tax at all no roads ,no police ,no hospitals,no schools to educate dumrses like yourself !”
              Tricledrown, I am not suggesting taking any less tax, nor are John Key or Bill English from what I have read (and linked too), Mickeysavage is the one suggesting “giving some people more money that the State could otherwise use”, so please explain how I am “drowning in my own argument”?

              “38% of all money spent in the economy comes from taxes take that away our economy would collapse like what happened in Argentina 1996-97 when just about all taxes were cut! ACT were using Argentina as an example of how good low tax economies work half way through the 1997 NZ elections no mention of Argentina ever again by your ACT mates!”
              Tricledrown, fuck off with your ACT mates bullshit, they are a bunch of washed-up ex-Labour hacks and idiots drowning in ideology rather than realism. Again, I haven’t said anything about cutting taxes other than to point out to Mickeysavage that tax cuts (which, again to get it through your thick brain are NOT on offer) are not necessarily financially reckless and asked him to point out how they were. Try not to step into a discussion that you can’t comprehend.

              “Now looking at the US economy state by state Bob high tax states have low debt better health care Lower unemployment all have economic growth!”
              Tricledrown, citation please, this is a potential answer to the question I asked Mickeysavage, but the fact you haven’t understood any of the rest of our conversation doesn’t lead me to believe any point you make without citation.

              “Bob California after years and years of Austerity finally put Jerry Brown(Linda Ronstadts ex) Brown increased Taxes and solved California’s Massive debt problem after years of tax cuts by dumbarse Tories rule!”
              Tricledrown, citation again please, I have at least given links to support what I say, all you have done is take an entire conversation out of context and gone on a rant with nothing to back yourself up. Pick your game up Trickledrown.

              • framu

                ” I am not suggesting taking any less tax,”

                but doesnt shifting tax thresholds do this? (and vice versa)

                • Bob

                  Not if it is changed at the rate of wage inflation. Then it is just taking the same amount of tax and leaving people with more money from their wage increases.

                  • framu

                    true enough – but the headline thats running, and the one the nats want you me and everyone else to hear is… drum roll… tax cuts

                    and when they clarify it a little bit further – the message is still tax cuts

                    and wage inflation isnt happening for everyone

                  • McFlock

                    apart from the fact that actively reducing the amount of tax they will take is actually a tax cut.

                    The “adjusting for inflation” argument cuts both ways – if the government gathers a nominally-identical amount of tax from year to year, inflation means that the value of that tax is decreasing.

                    • Bob

                      So by your logic National is increasing tax rates at the election if they don’t adjust for inflation because they are taking more tax and catching more people in the top tax bracket?

                    • McFlock

                      lol
                      that’s your logic.

                      There is an argument for that, unless inequality is also increasing at such a rate that less people fall into the higher tax brackets even despite inflation-based increases in average incomes.

                      But really, if you have to rely on people shifting tax brackets to argue that the nominal tax take is increasing, then you’re not increasing taxes enough to cover our debt and infrastructure requirements. Cry me a fucking river.

                  • Draco T Bastard

                    Not if it is changed at the rate of wage inflation.

                    We could key it to median wage which, over the last few years under National, has been going backwards. This would result in the rich having to pay more taxes (not that they do though).

              • tricledrown

                Bob you need a snickers you purvey pure out of date propaganda!
                Google Californian economy then US dept of statistics!
                Huffington Post has Many Charts and lists of how each state performs!

              • tricledrown

                Bob my smart phone can’t do links!
                I am always reading how different countries and states of the US economies are performing!
                It easy to find out!
                Right Wing propaganda is never backed by hard facts like you still haven’t apologized for repeating the pack of lies published in the spectator!
                The right wing never look very deeply into anything other than their own wallets!

              • tricledrown

                Bob you did say why don’t we just pay all our money in taxes!
                so calm down when you try and push a ridiculous excuse to push your argument to bully others into submission don’t be surprised if someone points it out!

              • tricledrown

                Bob look up wikipedia Swedish economy and compare it to the spectators propaganda(barcley bros propaganda)

          • tricledrown 1.1.1.1.3

            Bob pure BS Sweden has huge foreign debt in excess of $1 trillion huge govt debt massive unemployment deliberately covered up govt work schemes!
            Tax Cuts haven’t delivered !
            the spectator article you refer to was published in 2012 so figures are from prior date’s!
            The Speculator is A Murdoch load of lies and 1/2 truths no accurate data!
            Pure Murdoch propaganda!
            Bob who is feeding you this pure BS.
            Desperado!

      • joe90 1.1.2

        Sweden huh, where an unelected bureaucrat oversees interest rates at 0.78%, debt at 40% of GDP, deflation on the horizon, falling consumer confidence, growing rates of inequality with ballooning youth and migrant unemployment, a housing bubble and record levels of household debt.

        http://www.tradingeconomics.com/sweden/indicators

        edit: oh, and the links you’ve posted are two years out of date – could you rustle up some more recent claptrap

        • Colonial Viper 1.1.2.1

          And where Swedish mounted police charged at anti-Nazi protestors, fucking them over under hoof. Charming.

        • Draco T Bastard 1.1.2.2

          edit: oh, and the links you’ve posted are two years out of date – could you rustle up some more recent claptrap

          It’s the same claptrap that the idiots were spouting in the 18th century. Updated links aren’t going to change that.

          The idiots are always looking to cut taxes and saying that it will boost the economy. In reality things are exactly opposite what they believe.

      • tricledrown 1.1.3

        Bob your propaganda lies are purveyed by Britains biggest tax dodgers the Barcley bros.
        Englands equivalent of the Koch bros you Koch head!

      • Tracey 1.1.4

        it’s financially reckless because if Labour was doing it, that is the post many would be writing here, WO, Kiwiblog and in the newspapers and on tv.

        Same as they would be screaming LOLLY SCRAMBLE at the proposed giveaway of $20,000 to first home buyers to buy their vote.

        Hope this clears it up for you Bob.

    • felix 1.2

      micky, I’ve been parsing his statements too. This one’s a doozy:

      But the long term message is, y’know as surpluses grow, as the economy continues to grow under a National government, y’know, we’d like to deliver some form of tax.

      Amazing.

      And people will hear that and think he said something about tax cuts.

      • North 1.2.1

        Bobby…….it’s called “The Fraud of Nice”.

        Devised by TheGodKey for consumption by The Mice.

        Thanks for your concealing mock-intelligence.

  2. karol 2

    Even Patrick Gower is calling Key/English “tricky”.

    The Dirty Politics scandal knocked Lochinver and foreign ownership off the agenda. But the latest poll shows it is a real vulnerability for National, especially when doubled down and merged with the housing crisis.
    It is populist and the Opposition is trying to cash in.
    Mr Key revealed a big play today, hinting there will be an announcement about tax cuts. It may seem confusing, as just last week under direct questioning Finance Minister Bill English ruled out a tax package and failed to mention any announcement.
    It’s all about language though and in politician speak, a tax “package” is technically different from an “announcement”. It’s still a promise; it just has fewer details.
    There is a word for this – it’s “tricky”.

    • Lanthanide 2.1

      Posted in OM earlier today Karol, that it looks like your prediction of “tax cut bribe before the election” is coming true.

      Only strangely it doesn’t seem to be an actual policy that they’ll implement soon, just details of what they “might” implement “later”. Truly bizarre.

      Seems that the reaction is about what I picked, too: /looking-at-the-big-policy-picture/#comment-871790

      • karol 2.1.1

        It wasn’t my prediction, Lanth. I heard someone in the MSM refer to Key mentioning it, or hinting at it, a few days ago.

  3. Man in a Barrel 3

    Looks like the wheels are coming off National’s Dream Run of an Economic Tail Wind, to mix three metaphores:

    http://www.stuff.co.nz/business/industries/10421920/NZ-economy-could-hit-the-rocks-economists

    ” But the current rate of growth is unsustainable, a panel of some of New Zealand’s top economists told a briefing in Auckland today.

    And they said many New Zealanders are not aware how much our economy is relying on one-off boosts like the Christchurch rebuild, or how quickly it could slow down when they come to an end.”

    It’s good that this is getting into the MSM, but Labour et al need to be hammering the point that the Nats can take little credit for the good times, and will be woefully unprepared when it ends.

    • disturbed 3.1

      +++++++++100%

    • Colonial Viper 3.2

      Labour will also be woefully unprepared for when it ends, because Labour believes in the nonsense of “balancing the books” just as much as National does.

    • Tracey 3.3

      “And they said many New Zealanders are not aware how much our economy is relying on one-off boosts like the Christchurch rebuild, or how quickly it could slow down when they come to an end.”

      And why arent they aware? Because national deliberately lies about it to them and MSM dont question it. Even ACT questions it, BIG TIME

      Why isn’t Labour

      • Draco T Bastard 3.3.1

        And why arent they aware? Because national deliberately lies about it to them and MSM dont question it.

        QFT

      • Man in a Barrel 3.3.2

        ..

        Why isn’t Labour?

        Because as Colonial Viper pointed out Labour are singing from the same dog-eared economic songbook as the Nats. Oh, it has a pink cover instead of a blue one and the dedication on the fly-sheet is different, there’s a different word here and there and variations in emphasis but the hymns inside are all written by the same incurious economic charlatans who studied the same bankrupt economic theories in the same churnemout institutions.

        Where is the vision, Labour? Where is the courage? Where is the humanity?

        Oh, that’s right. We mustn’t scare the horses, must we!

  4. kenny 4

    You have to hand it to Key – he is very good at this kind of thing. He has done it before whenever he feels things are slipping away.

    He only has to hint at tax cuts and he knows most of his supporters and those other greedy buggers will get in behind sharpish; tongues out in anticipation. He doesn’t have to deliver – just the ‘promise’ is enough.

  5. And the left only have to hint about more free stuff and those bludgers will get in behind sharpish, tongue out in anticipation, he doesn’t have to deliver, just promise is enough. ( it works both ways, politicians have been doing it for years) at least he can deliver if he chooses , who knows what we will get with labour, green, NZF , IMP

    [Stephanie: Could you scream “troll” any harder? I would advise making some constructive comments lest your future contributions fall into a black hole.]

    • Draco T Bastard 5.1

      who knows what we will get with labour, green, NZF , IMP

      A viable economy rather than the stolen economy that we’re getting under National.

    • Man in a Barrel 5.2

      With respect I don’t read Reddelusion’s comment as any more trollish and lacking in constructive criticism than kenny’s.

      And Reddelusion is right – no, that should be ‘correct’, well he/she is probably both – We know what we’ll get from Key because we’ve already had it. And it stinks. But we can only hope we’ll get from Cunliffe et al what they say they’ll deliver and I’ve been at the receiving end of politics for long enough not to hold my breath. Well, actually I’ve been at the receiving end of politics for long enough to know that holding your breath (and nose) when dealing with politicians of any colour is a good idea.

      Plato observed that the true measure of a man is what he does with power. We’ve got Key’s measure now, but Cunliffe has yet to be measured.

  6. tricledrown 6

    Blues Buy You Milk prices due to fall over a cliff Guardian UK!
    Log prices have already crashed!
    This country is 44th on value added economy list between Turkey and Serbia!
    Stephen Joyce has mucked the R&D around over the last 6 years now he is lying like his leader the economy is heading for the rocks relying on a primary industry commodity boom bust cycle!
    Natural disasters insurance payouts short term short sighted Policy!
    Relicofderision!
    Conservative Conmen!
    Economic Neanderthals!
    National have continued to lock our Economy into a pre industrial revolution mode!

  7. tricledrown 7

    Blues Buy You Milk prices due to fall over a cliff Guardian UK!
    Log prices have already crashed!
    This country is 44th on value added economy list between Turkey and Serbia!
    Stephen Joyce has mucked the R&D around over the last 6 years now he is lying like his leader the economy is heading for the rocks relying on a primary industry commodity boom bust cycle!
    Natural disasters insurance payouts short term short sighted Policy!
    Relicofderision!
    Conservative Conmen!
    Economic Neanderthals!
    National have continued to lock our Economy into a pre industrial revolution mode!

    • disturbed 7.1

      ++++++100%

    • Draco T Bastard 7.2

      National have continued to lock our Economy into a pre industrial revolution mode!

      National prefer not having to do anything because that costs money and so they go for an economy that provides nothing more than more cows. It’s also the simple type of economy that they can understand. Anything more complex is beyond them.

  8. disturbed 8

    Like this question; Iprent, Stephanie,

    Hey Mr Key, please answer this question below;

    How come first while in Wairoa on 24/8/12 after the storm washed out our rail you said “you didn’t want road to be the only option” after your Government said they couldn’t afford to reopen the rail, that was reported in Wairoa Star 28thAugust 2012,

    Question,
    Why now can you afford tax cuts – but not afford to fix our public railway service you destroyed by removing the maintenance funding that caused the washout?

    Maybe this was your plan to get another part of your cycleway built by stealing our railway and helping your foreign owned trucking companies.

    • Lanthanide 8.1

      Pretty obvious that the answer to that is “tax cuts would help grow the entire country, not just the Wairoa region”.

      • disturbed 8.1.1

        Lanthanide ; you said,
        In response to our question why is Key offering bullshit promise of tax cuts but not fix our rail line?
        Pretty obvious that the answer to that is “tax cuts would help grow the entire country, not just the Wairoa region”.

        Lanthanide, missed the point by a country mile sorry.

        You don’t get the point!

        What I was asking was “why did Key say he didn’t want road to be the only option”

        We take this as – If that means he wants another option available to road?

        If so, – now that he says he has money that they didn’t have at the time he said he didn’t want road to be the only option why doesn’t he cough up now?

        So why doesn’t he now honour his promise to the people of Wairoa that he pledged to offer other than road only?

        Was this just like a tax cut, another BULLSHIT STORY?

        That was the inference made behind the question.

        Not what is the most effective way to use the surplus, if there was any.

        Which we know now there is not.

        We don’t want a debate how to spend the invisible surplus but to fix the rail they sabotaged.

        NZ is heading for bankruptcy. here’s why.

        Key we know you have increased our crown debt from 6 Billion to 60 Billion in six years!

        So now say you are running a surplus, Bullshit and we don’t believe you any more get it?

        We are full of cynicism, after being at the butt end of Key’s lies.

  9. fambo 9

    The Green Party is offering a way better tax cut for individuals and companies but it seems a lot of people only like tax cuts when they are paid for from money that would otherwise go on the health, education and conservation.

    https://www.greens.org.nz/policy/cleaner-environment/climate-protection-plan

  10. disturbed 10

    The descent of the NZ Dollar has begun, and watch fuel costs go up along with panic if it slips below 65 cents US.

    The media are speculating it’s the reserve Bank intervening, but I am cynical.

    Perhaps it’s another raid by Key/Krieger on our dollar beginning again?

    In 1987 Key as Merrill Lynch currency Manager partnered the NY mega rich NY currency raider mate Andy Krieger to sink the NZ dollar after pulling all his money out again as they did in 1987 after Labour took over, is this signalling a repeat as he said he would leave if loosing the election?

    http://www.businessspectator.com.au/article/2008/11/10/financial-markets/keys-house

    “John Key is living proof that not all heads of derivatives operations for large US investment banks end up in the dog house. Some get to run their own country.

    Key was elected prime minister of New Zealand last weekend after his National Party achieved a crushing victory over the incumbent Labour government of Helen Clark.

    The timing of his elevation, in the midst of a financial crisis, may be quite prophetic. After all, Key’s rise to prominence in foreign exchange circles came after he struck a rewarding relationship at Bankers Trust with Andy Krieger, a daring New York-based trader who launched a legendary raid against the NZ dollar in 1987.

    Krieger reportedly bet more than the country’s entire money supply against the currency, forcing it down sharply and taking massive profits in what is still described as one of the finest forex plays ever completed. “

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