Tax cuts busted

Written By: - Date published: 7:13 am, December 16th, 2010 - 67 comments
Categories: bill english, national, tax - Tags: ,

Tax cuts don’t cause growth. I hate to say I told you so, but they don’t. And slowly, some of the right wing commentators are starting to wake up. Here’s Fran O’Sullivan:

Prime Minister John Key yesterday displayed all the characteristics of a man deeply afflicted with political Tourette’s syndrome as he tried to convince Parliament how much better off New Zealand was when it comes to exploding Government debt levels compared with Portugal, Ireland, Iceland, Greece and Spain and emerging Pigs like the US and the UK. …

But all the elaborate dancing on the head of the proverbial pin does not disguise the raw reality that English’s billion-dollar bet that his Budget tax-go-round would turbo-charge New Zealand’s economic growth has (so far) proved to be a fizzer.

Even before Treasury’s “show and predict” exercise – aka the half-yearly economic and fiscal update or hyefu – it was obvious that many Kiwis were using their tax cuts to pay down personal debt rather than helping spur economic activity by consuming, and, that the self-employed and corporates were not contributing as much as expected to tax revenues. Just how much became apparent yesterday with the $1.4 billion drop in forecast tax revenue for this financial year.

The overall upshot is the Government’s cash deficit has blown out from $13.3 billion to $15.6 billion this year taking into account the unexpected expenditure and the drop in forecast tax revenue. …

The Government will increase its borrowing level from $250 million to $350 million a week. …

The Government’s response has been to order another review of expenditure. But it says it will not touch the so-called “broadly neutral” tax cuts even though they are not having the desired economic effects.

Under the circumstances, Bill English should no longer be able to get away with the outright lie that the tax swindle is “broadly neutral”.

Under the circumstances, it is ludicrous of the Nats to keep pushing, or any commentator to ever believe again, the outright lie that tax cuts “cause growth” (further excellent examples and resources here).

The Nats have got one and only one economic policy. Tax cuts. They don’t work. Now what?

67 comments on “Tax cuts busted ”

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  1. Salsy 1
    16 December 2010 at 7:42 am

    #2 Sell assets

    • r0b 1.1
      16 December 2010 at 8:18 am

      Mmmm yes, right you are. Shut out in the first term, but second term it’s all go. If they get a second term…

  2. M 2
    16 December 2010 at 7:42 am

    This is because of Cullen’s prudence Johnny not any of your doing. Key again tries to shift the blame for his own incompetence with such a statement. It’s like an abusive man saying, “Well I sometimes swear at her and put her down a lot, but a least I don’t beat her.”

    ‘Now what?’

    New left government please, with some balls to do what’s right and needed. If another year of a stagnant economy and worsening social outcomes isn’t enough for people to change the government then we’ll end up like Ireland, the UK and the US.

  3. Carol 3
    16 December 2010 at 7:45 am

    I’m glad to see that Key’s song and dance, diversionary, clown performance in the House yesterday, didn’t even convince some of his supporters. We need a real PM – someone who knows how to do the job and make credible plans and policies for the country, not a celebrity wannabe, who just games the system and governs by photo-opportunities.

  4. Peter Martin 4
    16 December 2010 at 7:51 am

    Seems to me that if we are borrowing 250 million per week and our tax ‘cuts’ are going to repay debt then all we are doing is converting personal debt into Govt debt.
    Unless yer finding that the tax ‘cuts’ are actually being used in the general day to day expense of living…

    • Pascal's bookie 4.1
      16 December 2010 at 8:38 am

      all we are doing is converting personal debt into Govt debt

      And when you look at the question of who is using their ‘tax cut’ to pay back significant debt,

      and how the tax burden has shifted,

      you see who’s debt has been converted,

      and who else will be paying for it.

      (few/many. etc)

      • Draco T Bastard 4.1.1
        16 December 2010 at 10:16 am

        Exactly, the rich are getting a massive taxpayer bailout by stealth.

        • burt 4.1.1.1
          16 December 2010 at 11:14 am

          So the rich are paying less tax under National than when Labour were driving them all out of the country and that is a bailout. What a piss weak understanding you have of tax.

          • Draco T Bastard 4.1.1.1.1
            16 December 2010 at 11:52 am

            burt, you’re still an idiot.

            It’s not about tax but about the economy. It’s limited (renewable resource base) and the rich don’t actually produce any wealth. As the rich don’t actually produce any wealth then the money they have isn’t actually theirs but has been stolen from everyone else through application of inequitable and immoral rules.

            PS, if the taxes were driving them all away why didn’t they all leave?

          • burt 4.1.1.1.2
            16 December 2010 at 11:57 am

            Oh right, so when taxes go up for the rich they are bailing out the govt… I can understand why envious people who can’t stand seeing other have more them themselves like socialism. You don’t need to think rather you can just repeat BS about the rich being parasites that keep you poor because being a socialist you need to blame others for your own situation.

            • Draco T Bastard 4.1.1.1.2.1
              16 December 2010 at 12:23 pm

              Ah, more of the “envy” lines from C/T – just what I’d expect from an idiot who can’t think for himself.

            • burt 4.1.1.1.2.2
              16 December 2010 at 12:32 pm

              Well if you can find another explanation for why you hate the big earners who pay the most tax then please – spell it out.

            • Peter Martin 4.1.1.1.2.3
              16 December 2010 at 2:16 pm

              I would suggest that those who earn the average wage or less will spend, rather than save their tax cut and conversely, those who earn over the average wage, would save and repay debt. Those who are well over the average obviously can save and repay more. But given we are borrowing to, in part, afford those tax cuts, isn’t the net effect to have the Govt borrowing money to repay private debt.
              That could well be some more palatable form of socialism more suited to those who feel uneasy being seen to get a handout. *s*

  5. lefty 5
    16 December 2010 at 8:00 am

    It is seriously underestimating these people to put their actions down to incompetence They know exactly what they are doing, as do their cheerleaders in the media.

    Everything is going according to plan. The crisis is coming together nicely, soon the logic of flick ing off some state assets to key’s mates will seem overwhelming.

    The manufacturing of further crisis in welfare, ACC and Super are also at an advanced stage of implementation.

    The investment in funding the National Party by the likes of private prison providers is starting to pay a dividend.

    Its party time for the rich and their hangers on.

    And there is no real parliamentary opposition.

    • Draco T Bastard 5.1
      16 December 2010 at 10:19 am

      And there is no real parliamentary opposition.

      That’s because all the parties seem to be owned by the rich.

    • BLiP 5.2
      16 December 2010 at 2:00 pm

      Yep. Pumping the economy full of bankster-funded debt, running-down existing public services, and wandering about distracting the media with the “smile’n’wave” PR is a deliberate ploy to provide the leverage required for cleaving off state assets and avoid public scrutiny while going about it.

  6. mickysavage 6
    16 December 2010 at 8:17 am

    Bernard Hickey in today’s Herald had some inciteful comments concerning our debt. He said:

    Our net foreign debt is as high as Greece’s and Ireland’s, both of whom have just suffered the indignity of being ‘bailed out’ by the international powers-that-be after effectively being judged bankrupt as nations.

    In their cases the International Monetary Fund and the European Union dictated massive cuts in public spending and new taxes. Their downfalls were preceded by credit rating downgrades.

    Standard and Poor’s put New Zealand’s AA+ credit rating on negative outlook a few weeks ago. As recently as March last year Ireland had a credit rating that was one notch better than New Zealand’s.

    The former Celtic Tiger also once had public debt levels similar to ours relative to GDP, but now has a rating four notches below our rating.

    New Zealand’s growth rate has been the slowest in the OECD in the last 40 years and shows no signs of improving any time soon. Our government is borrowing up to NZ$300 million a week and is running a structural deficit running at about 4 per cent of GDP.

    The government has just announced a slump in revenues leading to a cash deficit of NZ$15.7 billion or 7.7 per cent of GDP this year. It has also just increased its borrowing programme by NZ$10.5 billion over the next 3 years. That is almost all foreign borrowing.

    In fact, it’s somewhat strange that we haven’t already been hauled over the coals by our creditors and the markets.

    Our net foreign debt is set to widen past the 100 per cent of GDP danger point in the next four years, Treasury has forecast, although the government believes stronger commodity prices will help reduce that widening in coming years.

    Our net foreign debt is in the Greek/Irish/Portugese/Spanish zone.

    Understanding why we’ve gotten off so lightly helps explain what any bankruptcy might look like.

    New Zealand’s foreign debt problem is a household debt problem, rather than a government debt problem, like it was in Greece and Ireland.

    Thank you Mr Cullen. Imagine what situation we would be in if he had given tax cuts and blown all of the surplusses.

    • Sean 6.1
      16 December 2010 at 8:52 am

      Agreed – thank you Dr Cullen!

      It was great having a Finance Minister who considered preparing the country for bad times part of his job.

    • Herodotus 6.2
      16 December 2010 at 8:57 am

      But MS Cullen and co left us no legacy. There was no thought into setting up systems/infrastructures etc to enable NZ to have a substainable economy. All that was left after 08 were leaking houses (negating 1% GDP annualised growth under Labour), immigration (just importing growth), and dairy conversions, and alot more cafes. And yes mining and petrol chemicals and greatly increased over the last few years. Have alook at NZ debt, just mushroomed. We still had in 08 about $30b of govt debt, down from $40b in 98 (give or take a $b or 2 ;-))
      We grow grass pre 99 and sheep fed on it, now we grow grass and cows feed of it, nothing has changed We Grow Grass.
      Cullen was the best thing for NZ for about 4 years to stabilise NZ, then NZ stagnated as there was no vision or ability to grow and take hold of an opportunity that may not be avaiable again to this generation. Just look at the curent account deficits that were rung up over the Lab years, and nothing was done about it (Issue is still not resolved under Nats), mainly because the masses did not understand the implications of this on going deficit.
      p.s. to be balanced the current mis-diretion is also not the cure of our ills.

      • r0b 6.2.1
        16 December 2010 at 9:00 am

        But MS Cullen and co left us no legacy.

        You mean apart from nil government debt, KiwiSaver, the Cullen Fund, KiwiBank, KiwiRail, record low unemployment, children lifted out of poverty, and so on?

        • Craig Glen Eden 6.2.1.1
          16 December 2010 at 9:43 am

          Cullen might not have got everything right and I am sure in hindsight he would probably have done some things differently but thank God Bill English wasnt in charge we would have nothing left in the pantry.

          KiwiSaver and the ACC fund might not have seemed to tasty at the time but as it turns out it may just stop us from starving.

          • Draco T Bastard 6.2.1.1.1
            16 December 2010 at 10:22 am

            If Blinglish, Brash and Key had been anywhere near the Treasury benches over the last decade we would be in the same straights as Ireland.

            • fermionic_interference 6.2.1.1.1.1
              16 December 2010 at 3:27 pm

              No mate, You aren’t being realistic.
              If we had stayed at the same levels of Govt debt, that we had under The national Govt by the 1999 election, we would’ve been ONE OF THE FIRST TO FAIL probably even before Greece.
              Govt debt in 98-99 was what between 75-90% of GDP if I remember correctly ( can someone with time to spare find accurate data please)
              which was very close the the same levels as that of Greece and Ireland when they needed to be bailed out.
              In september 09 we were at 133.6% of GDP in debt to overseas financiers within the corporate sector alone.
              Fortunately in March 08 Govt debt was at 9.1% which became 12.9% by Sept 09.
              a 3.8% rise during the worst of the GFC, thank goodness we had been left IN A STRONG FISCAL POSITION BY LABOUR.

              This link gives details of the debt burden percentages shown above.
              http://www.wsws.org/articles/2010/apr2010/newz-a08.shtml

              Yes Burt I know it’s a socialist media outlet but they had the best data I could find off hand.

        • AndyB 6.2.1.2
          16 December 2010 at 10:16 am

          can you please show me where i see the government had nil debt in 2008. because from what i can find, it looks like it was more like 40bn government debt in June 2008.

          • r0b 6.2.1.2.1
            16 December 2010 at 10:36 am

            Sorry – typing too fast what I have typed a million times before – “almost nil government debt” is correct. Not sure where you 40bn figure comes from, but a lot of discussion of “NZ debt” fails to distinguish between government and private.

            • AndyB 6.2.1.2.1.1
              16 December 2010 at 10:43 am

              yea, pretty hard to find the exact data i am looking for, but this guy seems to have laid it out pretty well. admin, not a trusted source tho:

              http://www.johnpemberton.co.nz/html/government_debt.html

              Government debt as at June 2008 46bn, rising to 61bn in 2009 and 69bn in 2010. That doesn’t seem to take into account personal debt, but i could be wrong.

            • mickysavage 6.2.1.2.1.2
              16 December 2010 at 11:16 am

              The nil debt is net and includes ACC’s reserves and the Cullen Fund.

              Figures and information are at http://www.treasury.govt.nz/government/financialstatements/yearend/jun07

              Gross debt was $36b, there was no net debt.

              • mickysavage …
                16 December 2010 at 11:26 am

                Sorry I meant to say the net debt was nil …

                Need more coffee

              • AndyB …
                16 December 2010 at 11:33 am

                Thanks for that Micky. I would still say that our current net position is to be expected after a long period of recession and rather bad outlook. Tax take is down, as to be expected, due to people not spending, companies not making as much money, and a rising unemployment rate.

                I guess any income surplus is being either saved or used to pay down private debt. Which ballooned over the last decade due to buying stuff we didn’t need with money we didn’t have.

                Once people start spending (hopefully in the new year), tax and GST revenues will go up again and government debt can be repaid.

                Unemployment rate is up (bad), but still better than a lot of countries, and hopefully we are at the worst of it now, tho with petrol at $2 a litre, things aren’t looking that rosy.

              • r0b …
                16 December 2010 at 1:25 pm

                Thanks for the clarification micky.

                • Herodotus …
                  16 December 2010 at 3:02 pm

                  But this figure that Mickey comments on includes things like student loans of $10b (reducing govt aid to unis and transferring this cost to the student and from operating to Bal Sheet), ACC, NSF, EQC, Cullen fund etc but much of the asset side is not available for gereral govt use, these items have been tagged. Even Nats would not venture to do that !!!
                  Labs timing to be govt was perfect and allowed people to point the finger at this net nil debt. As stated before we had about 35% increase in GDP over the 9 years. This includes those houses we built that cannot perform their function- to house and protect the occupant from outside conditions, keep warm and dry. So we spendt $20b to build a house and then another $20b to fix it up. then say look GDP up govt tax take up (GST and Term Tax).
                  Because of the fast times there were less people on benefits, yet when the bubble busrt the nos were always going to increase.
                  Still no one addrersses the stats that cannot be manipulated like the current account, out nat overseas debt. Even the old Values party would have left govt in 08 with the books looking great.
                  We now even have senior Lab people stating that what was done was wrong. Res Bank act, Neo Lib values etc. Reger David Cunliffs speach a few weeks ago.
                  Give me the countries reigns and I coul dleave the books looking great. GST at 20% and tax rates similar to Aussie. same as councils just speand whatever and increase the income to balance.;-)
                  take care Mickey- I stated also that the current course is not for long term benefit. Just let the action commence at Botany, perhaps MS may make an appearance!!

                  • mickysavage …
                    16 December 2010 at 3:20 pm

                    Greetings Herodotus

                    My preference would be that student debt was not treated as a crown asset and that it actually did not appear at all.

                    With ACC and the Cullen fund however they are funds which will reduce the need for general expenditure. The Cullen fund in particular meant that general taxation did not have to cover in full future superannuation payments. The funds are available for future use, in the case of the Cullen fund expressly so.

                    I agree that leaky homes are a huge blight on NZ society. Remind me again which government in the 1990s loosened standards so that the problem was created?

                    Finally no chance of an appearance at Botany …

                    • Herodotus …
                      16 December 2010 at 6:27 pm

                      Just to play your games. Nat changed the building code- Lab when it was pointed out of the issue commented that it was “A NZ Herald beat up” and the only belated response was the protect BRANZ from any liability. Nat created the mess, LAb allowed this to continue.
                      NZS and Cullen fund was at least an acknowledgement of the under funding of our future liability. If like ACC we had to prefund super- I would hate to be the Finance Minister then and the “technical” reported deficit that would result from and the increase of taxes that would result. From reading the Cullen fund will result in about 15% requirement, but at least it is a step forward.
                      Pity re the non appearance at Botany !!
                      http://gmi.co.nz/pages/kiwisaver/news.aspx?nid=24

                    • lprent []
                      16 December 2010 at 6:40 pm

                      From memory….

                      The Cullen fund was targeted at about a third of the liability (ie above the level of taxation at the time it was introduced). That was based on pushing about 500 million into it per year on average. In practice forward loading it would reduce the requirement for later funding/allow for recessions. So Cullen pushed between 1 and 2 billion in it per year.

                      Bill English also from memory pushed a single 500 million payment into it (that had already been budgeted) and is currently not budgeting to put anything into it until about 2020. That helps him pay for tax-cuts now. On top of that of course his taxcuts have reduced the actual tax take thereby increasing the future liability. That is why it is now predicted to only be about 15%.

                      I guess Bill English doesn’t plan on being finance minister in 2030..

        • burt 6.2.1.3
          16 December 2010 at 11:16 am

          You mean apart from nil government debt, KiwiSaver, the Cullen Fund, KiwiBank, KiwiRail, record low unemployment, children lifted out of poverty, and so on?

          If I overcharged my customers I too could pay off my credit card. But if I wanted a sustainable business I would reinvest in income producing assets… which Labour did not do.

    • Colonial Viper 6.3
      16 December 2010 at 9:07 am

      Bernard Hickey in today’s Herald had some inciteful comments concerning our debt. He said

      You’re showing your Freud.

  7. Draco T Bastard 7
    16 December 2010 at 10:12 am

    The Government’s response has been to order another review of expenditure. But it says it will not touch the so-called “broadly neutral” tax cuts even though they are not having the desired economic effects.

    Of course they won’t Fran, their purpose in government was to cut taxes for the rich and to make everyone else even more dependent upon the rich by increasing poverty. That’s why John Key promised to lower wages.

    The Nats have got one and only one economic policy. Tax cuts. They don’t work. Now what?

    Get rid of NACT, get rid of capitalism and bring in an equitable and sustainable economy.

  8. Bill 8
    16 December 2010 at 10:39 am

    “The Nats have got one and only one economic policy. Tax cuts. They don’t work. Now what?”

    More propaganda is “Now what”. Seriously, why were Brash and Douglas given good air time on TV news bulletinns to peddle neo-liberal privatisation doggerel in the face of blown out finances, while the opposition got a ‘two second’ sound bite?

    Don’t know who all noticed, but the Brash piece was actually quite well set up in terms of lighting and camera angle as opposed to Goff’s ‘two seconds’ ( ‘It’s the cost of tax cuts’) being a snip from one of those impromptu press ‘hedgehogs’ that happen in parliament’s hallways.

    So, first up, we are spoon fed an impression of neo-liberal acolytes being professional, polished and knowledgeable. Next, we are subjected to reinforcing ‘suggestions’ from the actual news presenters (who, as we all know present objective and balanced ‘news’ as opposed to ideology), that billions of dollars worth of state assets could be sold to balance the books.

    And although I haven’t witnessed this, as I don’t often watch TV news, I hear that TVNZ has been doing a ticky tour of run down school buildings of late, and….yup. Up comes the suggestion that they could be sold. Apparently, the only fly in the ointment is that they are on Maori land.

    And so it goes on and on. Incrementally walling in the parameters of acceptable debate and shutting out any opportunity to offer alternatives to neo-liberal prescriptions. Worse than this, I’m not sure that Labour has any substantive alternative anyway. The current leadership represents a continuation of a Labour Party that merely gave us a softer variation of neo-liberal management during its time in government.

    So thanks to the deafening silence…the apparent void on the parliamentary left where alternatives to variations of neo-liberal themes surely ought to reside… can we look forward to Serco taking over the running of air traffic control at Auckland Airport as well as our schools and hospitals and whatever else to satisfy dishonest but beguiling neo-liberal demands for ‘value for money’ from services as a way to pay down debt?

    edit. btw. The tax cuts are having the desired result. They have worked just fine.

    • Colonial Viper 8.1
      16 December 2010 at 11:09 am

      edit. btw. The tax cuts are having the desired result. They have worked just fine.

      THIS +1

    • burt 8.2
      16 December 2010 at 11:17 am

      Bill

      When commenting on the standard you can’t just say;

      edit. btw. The tax cuts are having the desired result. They have worked just fine.

      But people will love you if you say;

      edit. btw. The Labour tax cuts are having the desired result. They have worked just fine. National tax cuts are bad.

      • Draco T Bastard 8.2.1
        16 December 2010 at 11:55 am

        Actually, I think you’ll find that most of the left thought that Labours tax cuts were a bad idea as well. I certainly did.

        • lprent 8.2.1.1
          16 December 2010 at 1:38 pm

          Actually, I think you’ll find that most of the left thought that Labours tax cuts were a bad idea as well. I certainly did.

          So did I – and I’ve expressed it often enough. Quite simply the NACT’s spent all of their time in opposition being idiots whining about surpluses that didn’t exist. When you accrued future liabilities (thanks to Ruth Richardson they have to be accounted for) we have been running in deficit since the Fiscal Responsibility Act was introduced in the early 90’s. But with the usual impenetrable economic stupidity of the right, they looked only at the governments equivalent of the P&L statement, not the Balance sheet.

          Labour did the tax cuts purely for electoral reasons because of the short-term stupidity of people like burt. Most of the left disapproved but kind of accepted it because of the political shit-storm that NACT had raised by lying about the governments actual fiscal position with selective quoting the accounts.

          Cullens tax cuts might have been sustainable in the short-term with what was known at the time on the recession. Bill English however deliberately put in taxcuts when he knew that there was absolutely no way that they were affordable in short-term.

          • burt 8.2.1.1.1
            16 December 2010 at 2:16 pm

            <history_rewrite>Cullens tax cuts might have been sustainable in the short-term with what was known at the time on the recession.</history_rewrite>

            Yes yes of course lprent, the tax cuts timed for November 2008 after the recession started in the last quarter of 2007 – There was no element of election bribe from the red team was there… And tell us agin lprent how tax thresholds should stay static while wages rise because fiscal drag is good for creating surpluses and even better at making workers poor.

            • lprent 8.2.1.1.1.1
              16 December 2010 at 2:34 pm

              Burt – you’re the one trying to rewrite history.

              The key words in there were “might have been sustainable“. If you read the attachments in that budget from treasury at the time that the budget was produced, they were forecasting a quite rapid pull out of recession because at that time our recession was quite local to NZ from drought etc.

              The scale of the financial issues from the shonkey banking in the US and elsewhere wasn’t appreciated in the first quarter of 2008 and therefore their effect on our economy wasn’t known or even guessed at. It was only in mid-2008 that they became apparent.

              Sure it was an ‘election bribe’. It was in fact the same type of election bribe that National had been promising since 2004, a general cut to tax rates.

              Tell me in your selective self-interest do you only consider that it is a ‘election bribe’ when Labour does it, and not when National does? Thats what your statement sounds like. A bit hypocritical don’t you think?

              In my view, there shouldn’t have been any tax cuts. They should have simply moved the tax thresholds precisely because of fiscal drag issues. They should not have moved them far because we hadn’t get close to covering our forward liability with an aging population. But the fact of the matter is that the tax take by the government needed to move upwards above the rate of growth to cover those forward liabilities. Running the thresholds up slower than the growth rates would have done that quite well.

              You can find me arguing that here as AncientGeek and lprent from soon after the site was started.

      • Bill 8.2.2
        16 December 2010 at 12:15 pm

        Burt.

        How about pointing out that Fran O’Sullivan apparent lamenting of a failed tax cut policy is the necessary preparatory ploy intended to soften up the public with regards asset sales?

        How’s about pointing out that this is the same old pattern, whereby we end up at a point where savage neo-liberal prescriptions are unleashed under the premise that There Is No Alternative? Once again.

        How about pointing out that the Nats never intended to kick start the economy?
        How about pointing out that they intended, through a careful and incremental introduction of ‘lesser’ neo-liberal policies to create a situation that will better allow their unconscionable ‘no holds barred end game’ policies to be implemented?
        How about pointing out that neo-liberal agendas inevitably breed a sense of powerlessness, hopelessness and resignation in any target population and this blunts or neuters any potential public backlash?

        Hmm?

        • burt 8.2.2.1
          16 December 2010 at 12:22 pm

          Bill

          You have half the story. The flip-side to selling everything is re-nationalising everything and the state trying to own all production like the Muldoon years. There are two sides to a pendulum swing and the major party FPP [two ticks National/Labour] mentality keeps the pendulum swinging in the best interest of the major parties.

          • Bill 8.2.2.1.1
            16 December 2010 at 12:38 pm

            burt.

            Wrong story!

            When services are provided by a government in a social democracy, there is a modicum of accountability present through electoral processes and codified complaint procedures.

            When those same services are privatised, any accountability disappears.

            Consider the difference in pursuing a complaint against Serco as opposed to a complaint against a state run prison service, school service or health service. (Note, I’m referring to complaints and not legal action due to alleged illegalities)

            Consider the cost of breaking Serco’s public service provision contracts if their operating practices are not to our liking as opposed to removing governments that have direct responsibility for and oversight of public service practices.

            It’s about the meagre amount of democratic accountability that we have at present versus none.

  9. tc 9
    16 December 2010 at 10:47 am

    mmmm don’t the emperor’s new clothes look good now after the label’s been removed and it’s been washed a few times……a relentless focus on step change and being aspirational to catch Oz…..you’ve gotta laugh at these one trick clowns…..helps to keep smiling.

    First muldoon drove a wedge down NZ society financially (think big) and socially (bok tour) which kick started our mass skills migration…..led us to rogernomics to fix up some of the damage (some areas took alot longer)…..then shipley/bolger/richardson wrecking crew…..clark/cullen astute conservative approach to paying down debt and building infrastructure/public assets through the boom times laid the foundations for…… the NACT circus of rhetoric/ideology/bs and downright contempt for due process and democracy.

    Why is OZ so far ahead ? Because their rightwing gov’ts aren’t so ideologically blind as to reverse the overdue structural changes Keating/Hawke made in the mid-late 80’s…CGT/Compulsory super/FBT to name a few.

    • Bill 9.1
      16 December 2010 at 10:58 am

      “Because their rightwing gov’ts aren’t so ideologically blind…

      Or it could be that their state governments act as reasonable barriers to the full implementation of neo-liberal prescriptions? When I hear Gillard (or previously Rudd), the Australian national governments…even those of the supposed left…sound just as neo-liberal as the ‘best’ of them.

  10. prism 10
    16 December 2010 at 11:59 am

    Even the police paying out for the Pike River rescue so far is taxpayer money being used to subsidise services which should be covered by the mining industry. They have not put in sufficient capital to provide machinery needed for rescues and should have had a compulsory fund for accidents, similar to the way we pay into ACC to cover our individual everyday problems. And the sort of people running Pike River have profited from personal tax cuts so the detrimental externalities cut more deeply on the rest of taxpayers.

    • Lanthanide 10.1
      16 December 2010 at 1:06 pm

      I was thinking about this too, but unfortunately because they were a limited liability company, there really isn’t much that can be done.

      If you go after this individual limited liability company, all other companies also ask “are we going to be next?” and you’ve got a great big chilling effect on the economy because no one wants to take a risk and start a business if they’ll be held fully liable if it goes down the gurgler.

      Unfortunately this results in privatise the profit, socialise the loss, but that’s the situation we’re stuck with at the moment.

      • prism 10.1.1
        16 December 2010 at 5:38 pm

        Well mining isn’t just like any other business. Not many involve practically living in a tunnel with a pick like a troll. And when the specs show that it is a mine with methane producing coal to a greater extent than other coal, then there should be contingency money held or paid annually to the government into a pay-as-you-go insurance trust or like.

        t isn’t satisfactory to throw hands up in the air and say that all business involves risk and we all have to wear it because that’s the way it’s done. It should be done differently for different levels of risk, and not to expect workers to sacrifice their lives as an underground workforce. People do so, for instance on Mt Everest, but that’s a very individual choice.

    • Peter Martin 10.2
      16 December 2010 at 2:20 pm

      Was thinking this morning that every chance business gets it corporatises the profits and socialises the losses…

  11. Deadly_NZ 11
    16 December 2010 at 1:15 pm

    How about pointing out that Fran O’Sullivan apparent lamenting of a failed tax cut policy is the necessary preparatory ploy intended to soften up the public with regards asset sales

    yep just waiting for the smiling assasins The Teflon John and his capo Blinglish to come out and say
    we need more money so we are going to sell all your silver and there fuck all you can do

    Great the political mafia fucks up NZ in 2.5 years

  12. arandar 12
    16 December 2010 at 1:40 pm

    Just a comment or maybe it’s a question about the Policing running the Pike River Rescue/Recovery operation. Could it be because it might be a possible crime scene? Just wondering what might be found eventually and whether anything could be covered up if the company or any other private entity were running it?

    • Lanthanide 12.1
      16 December 2010 at 4:14 pm

      The type of crime that would require physical occupation of the type would be something like deliberate arson or sabotage. If that’d been the case, they’d probably already have good evidence that that happened, it’s been over a month now.

      Aside from that, with the mine having exploded multiple times, there won’t be any physical evidence left in the mine, when/if they ever get inside it.

      Any other sort of crime, like criminal negligence, will fall out as a result of the investigations that have been set up.

      So no, I don’t think it really has anything to do with it being a crime scene, more to the point that PRC have no money to pay for anything.

    • jcuknz 12.2
      16 December 2010 at 10:01 pm

      The simple answer is that the Police organise and run search and rescue … but people love a conspiracy theory.

  13. Irascible 13
    16 December 2010 at 5:20 pm

    I recall Roger Douglas saying that his financial reforms in the 1980s were good for the Government’s accounts because they effectively transferred the debt from the Government books to those of Private interests / businesses thus limiting the Government’s liabilities. Seems he was wrong on that score when one sees Governments bailing out big businesses that collapse under their accumulated debt burdens and speculative practices.
    Key & English come from the same stable as Douglas. Enough said.

  14. aj 14
    16 December 2010 at 5:56 pm

    I’m ‘lucky’ that I got a tax cut that equates to about $1500 per annum. But $250 has already gone in increased motorcycle rego. After this: ETS, GST, power, inflation, fuel etc.
    John, my nett result? nowhere near better off.

  15. Jim Nald 15
    16 December 2010 at 6:24 pm

    Tax cuts serve a fantastic National aim to put us in greater debt.
    And successfully create a strategic deficit to give the nuts a good excuse to make public service cuts.
    Well done, key and english.

  16. jcuknz 16
    16 December 2010 at 10:05 pm

    It is not that tax cuts don’t work but they are given in such a way that those with most get the most. Since they have the most they are more likely to put it in some form of saving … which is a good thing in itself because some of it will move on to help business to provide more jobs … but it doesn’t help to spur the economy which means consumption of goods. There is no point in making goods that cannot be sold. So the logical solution would be to increase the base line where taxation starts. Everybody then gets the same

    But a problem I see is that more consumption on other than basic needs is bad for a world with an exploding population and running low on resources. With a distinct likelihood that climate change will mean considerable difficulties in getting crops to maturity.

    So if we could be sure that tax-cuts would only be spent on basic needs and not on trivia and aimed at the lower income’d they would be probably good … but the way they always seem to be arranged they don’t get my vote.

  17. jcuknz 17
    16 December 2010 at 10:14 pm

    There is no point in making goods if the potential consumers do not have the money to purchase them. [The edit function seems to have disappeared]

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  1. The Standard: posted on 14 December 2010 at 6:23 pm