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Tax cuts for the rich no use if you’ve lost your job

Written By: - Date published: 6:45 am, September 30th, 2010 - 66 comments
Categories: Minister for Overseas Holidays, unemployment - Tags:

Despite Bill English’s firm statement that “unemployment has peaked”, jobs are still being lost in large numbers up and down this country and dole numbers are still rising.

The papers are full of depressing announcements of job losses: 1500 council workers in Auckland. 150 mushroom workers in Morrinsville. 500 workers whose quake hit employers are closing down in Christchurch. 23 at MTV.

And from these job losses, more will flow. Each newly unemployed worker will have to cut their spending by hundreds of dollars a week, that’s spending that was paying the wages of hundreds more workers, who will lose their jobs too.

From his beach chair in Hawaii, the worries of working Kiwis must seem a million miles away for John Key. Maybe he should stay there and we should get a government that cares about making sure Kiwis have work if they want it.

66 comments on “Tax cuts for the rich no use if you’ve lost your job ”

  1. Jim Nald 1

    Double Dipton perfects the art of keeping a straight face.
    Well done!

  2. People have lost their homes to the quake and sadly now, more and more Canterbury workers find out how WINZ works. National don’t have a clue how too create jobs or fix the damage. Look for a huge increase in crime Crusher you lame duck! National is a do nothing pc government.

  3. nilats 3

    Don’t worry tho, the GST off F&V will make everything right.

    1500 lost jobs in councils will be good for the region, after all councils should not be job creation schemes and there is efficiency of scale with one super council. Did you expect the Labour version to create more council jobs!!!!

    MTV – a decision made in USA probably. Mushrooms had a consent process nightmare IIRC and were not prepared to pay $2M more to keep the smell down. Usless beauracrats creating no wealth probably thought that mushrooms have a limitless pit of money to waste?

    Maybe a do nothing govt is better than the last govt who were always busy thinking of more taxes to inpliment for their useless schemes that created nothing of value.

    • Roger 3.1

      Lame attempt at diversion there. The explanations of why those job losses have occurred is irrelevant. The point is that there is going to be another 2023 people losing their jobs and nowhere for them to be absorbed back into the job market. This government has done nothing to deal with this problem beyond speaking about some imaginary cycleway that will solve all of our problems. Don’t try and use a policy announcement by the opposition to hide the lack of performance of the members of parliament that have the power to set the policy agenda.

      Captcha: sakes – for all of ours, John Key, you’ve had your fun playing captain now step aside and let the grownups fix this mess.

  4. nilats 4

    BTW – I will enjoy my tax cut of $60 PW being on $90k PA. Nice to know I have the choice of what to do with MY money and not have it wasted by inefficient govt services.

    • Marty G 4.1

      you forgot that more than half of that will be eaten by the GST hike

      And, pray tell, which ‘inefficient govt services’ have been cut to fund your tax cut?

      Oh right, it’s funded by the GST hike and more borrowing.

      Basically, you’re getting $30 a week in the hand by making your children pay for it.

      Nice one champ.

      • jacinda 4.1.1

        Maths wasn’t one of your good subjects was it Marty? You claim that he will be wasting more than $30 a week on the extra GST burden.

        You are assuming he is spending $1500 a week on GST rated goods and services. If he was spending $1500 a week on such, he would be paying around $33 extra in GST which is what you claim he will be doing (more than half of his $60 swallowed).

        So, somehow you have managed to calculate that he is spending $1500 a week on GST rated goods and services alone – which would require $78k a year after tax to service, and then on top of that he is paying rent or mortgage, saving money, paying down debt etc.

        When you understand what you are claiming, maybe then you can come back and post. Your FUD has just splattered back in your face.

        • Anne 4.1.1.1

          And I suspect the “fud” will soon rebound right back on your charming face Jacinda dear.

        • Colonial Viper 4.1.1.2

          Jacinda, each household is going to be doing its own budget math over the next few months. Regardless of the blogosphere or airwave wars.

          And guess what, I reckon most households are going to decide that the GST rises and associated inflation etc. have been a kick in the guts.

    • Draco T Bastard 4.2

      I still haven’t seen any evidence to prove that government provided services are any less efficient than private business. Perhaps you could provide some? And, before you start, no, I’m not looking for theory but actual proof.

    • Roger 4.3

      We will see how much you enjoy your $60 dollars when you end up needing any of those government services and find that the lack of funding translates into a lack of care. Just look at your $20 notes in a hospital bed sitting in a corridor, or when your kids sitting around at home because the teachers are on strike

      • jacinda 4.3.1

        You jealous of those earning more than you Roger?

        Most people on decent wages actually have private health insurance, income protection, life insurance etc.

        I’m already counting the dollars I’ll be getting back on my 165k income – woot! Not that I was paying the full amount of tax in the first place!

        • Vicky32 4.3.1.1

          Oh Jacinda, dear, you so give yourself away, don’t you? What a troll!
          If you have private health inusrance, you are helping undermine the public system. You selfish, juvenile little girl.
          Deb

        • Roger 4.3.1.2

          Not at all, as long as those earning a modest wage can participate in society with dignity and a fair standard of living I don’t care how much others earn, but when people are struggling the idea that you can take from society without giving back smacks of arrogance, and needs to be stopped.

    • Colonial Viper 4.4

      I guess you can put those few extra dollars into visiting your kids and grandkids a couple of times a year after they’ve moved to Australia for better pay, better services and better living conditions.

    • AlbatrossNZ 4.5

      Take that! Public schools and hospitals!

    • Lanthanide 4.6

      You must feel pretty special with your salary. I’m quite certain there are a few other regular commenters here that are earning more than you are. I myself am not too far off from your salary, and yet I don’t have a smug sense of superiority about it.

      Just remember, you’re merely a redundancy away from being just like all those unemployed bludgers you look down your nose at.

      • Colonial Viper 4.6.1

        And after you’re made redundant and then eventually get a new job, you have the 90 day right to be fired to look forwards to 🙄

  5. Sanctuary 5

    @nilats – that is just sad, largely because it is almost certainly pure fantasy.

  6. rich 6

    I guess those mushroom workers were kept in the dark and fed bullshit until the last minute….

  7. nilats 7

    Sorry MG you are wrong. How do you get $30 for GST? This assumes I spend $1400 PW. As a HH (2 adults & 2 children) we spend say half that PW, so the extra GST is $15 +/-. It is not compulsory to spend your whole salary. I also pay $700 plus PW to pay off mortgage to reduce my debt. This will be gone in 18 months so I will be able to start paying for my childrens education if they go to Uni (only if they take a useful subject though, no BA allowed).

    My children will also be paying for interest free loans taken out by Labour bribed idiots in 2005. Train sets anyone? Do you think that is FAIR? My children will be paying for other peoples largesses, not mine unfortunately.

    GST raise is fiscally neutral. Borrowing is lower than if your lot were in power along with higher taxes.

    We need less government, not more as we are a poor country, only booming Aussie economy helps keep us going.

    • Roger 7.1

      Your children will probably be using the interest free loans when they reach university age. They will also be thankful for a publicly run, cheap, and efficient railway especially as peak oil hits. They will be glad that Labour were such visionaries. I don’t understand how you can suggest that borrowing would be higher if Labour were still in considering that they paid back the debt created by previous administrations. But lets not let facts get in the way of your assertions.

    • Colonial Viper 7.2

      GST raise is fiscally neutral.

      Bull****. Someone on John Key’s salary comes away about $300pw better off.

      Your fiscal neutrality is actually National’s welfare for the wealthy.

    • Clarke 7.3

      You’re just dressing up basic sociopathic selfishness as a political philosophy – albeit one that’s a bit incoherent and in need of a spell check. But it’s interesting reading you diatribe, as it’s increasingly outdated and irrelevant.

  8. Fabregas4 8

    I feel sad for those who have been so brainwashed by successive governments and affected by free market policies that they see New Zealand as a poor country. Less than 30 years ago our standard of living was at the top of the tree, we had equity, a sense of fairness, basically little serious crime, a great health system, well regarded schools and an excellent range of public services. Businesses could do there thing too and we had many successful enterprises working within a framework that had aims of helping lift peoples quality of life rather than their incomes. I know it sounds like ‘the good old days’ but I for one an waiting for someone to see the very straightforward idea that we are all here for 70-80 years or so and that it is our responsibility to build a country that makes each of our times good, and safe, and enjoyable, and worthwhile.

    Quite clearly we need some big thinking about how we can develop a country that does this – its not a debate simply about tax, or welfare, or the market – it is a debate about what kind of country we all want. I trust Kiwis, if given the chance, to do the right thing, to stop poverty, to focus on family, to give people a fair go, to provide a safety net, to make living worth while.

    I personally am still waiting for the benefits from the reforms of the 80’s – 1/2 of my life waiting for the promised land. I’ll be dead and gone soon enough – just how much longer do I have to wait

    • Supermaorifella 8.1

      I agree to a certian extent Fabregas. Successive governments, both Labour and National, have continued with short term policies designed to garner more votes at the next election with no real long-term vision for NZ as a whole. What we really need is some non-partisan input from both major parties on what is important for NZ, not their own political agenda, and the will to begin acting on that. Chances of this happening are feck all though; apart from bemoaning the fact, what else can Joe Blogg’s do?

      • Lats 8.1.1

        Very well said both of you. It is time to focus more on NZ and less on partisanship. There are many reasons why this doesn’t currently happen of course. I’ve touched elsewhere on the hangover effect from FPP, with the two major parties being stuck in opposition mode. Also at play is our short electoral term. I really don’t think 3 years is enough, because pretty much as soon as a new govt is elected and up and running they start campaigning for the next election. A 4 (or even 5) year term would help reduce this effect.
        However I think the biggest problem we have is the attitude of our politicians, their sense of entitlement, and the perception that they no longer feel they serve us, but instead that we are their minions, to do with as they see fit. This seems to be endemic across the political spectrum, although to a lesser degree on the left. Without having a complete clean-out I don’t know that there is much we can do about this.

      • Colonial Viper 8.1.2

        Dang on the money, alls of ya.

        😯

  9. tsmithfield 9

    Of course the unemployed will be getting more in their dole since the unemployment benefit is taxed. So, tax reductions will even help the unemployed.

    • Roger 9.1

      Without going into the shortsightedness of your comment, the relevance of your point to the post is that the extra 2023 people joining the larger numbers of unemployed (that this government is doing nothing about) have a few extra dollars as a small consolation?

      • tsmithfield 9.1.1

        Firstly, it is inaccurate to assume all these people will be going onto the dole. Many may have other jobs before their existing positions are terminated.

        Secondly, most of these will probably get large redundancy pay-outs, so they should be fine for quite awhile.

        So, it is unlikely that those who lose their jobs from the council shake-up will be thrown into poverty. And they will get a few dollars extra on the dole, if they do end up there.

        Anyway, Marty’s article is selective about printing only bad news. For instance, so far as 500 jobs lost in Christchurch, that is small potatoes compared to the legions of workers that will be needed to help with the rebuilding.

        • Lanthanide 9.1.1.1

          Right, so because National has no policy for creating jobs, we should be grateful that there was an earthquake in Canterbury to spur the jobs market? That’s a good look – mother nature doing what National can’t.

          Also, the 500 in CHCH that have lost their job are highly unlikely to be amongst the people that will get a job as a result of rebuilding. Mother nature is fickle – help some, hurt others, while National just hurts everyone.

          captcha: instead

          • jacinda 9.1.1.1.1

            Its not up to the government to create jobs. When that happens all you get is a massive drain on the country as it sinks under the weight of the public sector. The private sector is where all the economic growth comes from.

        • felix 9.1.1.2

          most of these will probably get large redundancy pay-outs, so they should be fine for quite awhile.

          lolwut?

        • hateatea 9.1.1.3

          What will I do with my extra $4.08 per week? Cut back yet again on what I am able to eat and drink. Apart my rent, every cent I get each week goes on items which will attract the extra GST. I expect to be worse off not better off.

          On the other hand, John, Bill and yourself will be able to enjoy the extra $$$$’s, I am sure. ‘Let them eat cake’ sound familiar to anyone?

          captcha: loads

          I am sure that it has a sense of humour!!

    • felix 9.2

      tsmithfield: “Of course the unemployed will be getting more in their dole since the unemployment benefit is taxed. So, tax reductions will even help the unemployed.”

      *ahem* http://www.taxguide.govt.nz/benefit.aspx

      • hateatea 9.2.1

        Thanks for posting the link. There is nothing quite like the truth directly from the authoritative source to keep the record straight. Of course, that doesn\’t mean that there are not those who will continue to believe that all beneficiaries are on to a good thing, laying about, doing nothing etc etc. Of course, it is also their own fault that they are unemployed, sick, widowed etc

        • Colonial Viper 9.2.1.1

          Every instance of elite rule requires a defined ‘untouchables’ underclass to blame and heap scorn upon.

      • Jum 9.2.2

        Lovely Felix.

        I shall keep a copy of that in my wallet to show NAct misleaders when they try to feed that line.

    • bbfloyd 9.3

      bit late, but i couldn’t resist pointing out that the odds of ALL those laid off in christchurch to have to go on a benefit, or conversely, ALL of those workers getting jobs,and/or “generous redundancy” packages is zero.. so how many of that number have to go on a benefit, and how many redundancy’s will be “generous”? what percentage of those payouts will go to people employed for omly a short period of time? therefore more likely to not be eligible for “generous payouts… not to assume the ability of employers to pay redundancy.

      i’m not actually looking for a debate on the final set of numbers as such. i don’t believe that arguing over minor percentage points has any relevance to reality for each individual, and how we deal with their plight.

      my basic point is that this equation has many layers to it, so when does it become acceptable to ignore the reality that even a best case scenario under the present administrative regime leaves a percentage of those people to join the cast off pile.

    • Vicky32 9.4

      No ts, you’re completely wrong. Unemployment benefits are taxed, yes, but we don’t get tax cuts, and beneficiaries never have got tax cuts (the Nats declared that beneficiaries, as useless eaters, don’t merit them. So, sorry, you’re talking shite (as you do!)

  10. Jum 10

    It’s interesting that Key is more popular when he’s not in the country. That could mean NZers like what’s left; Emperor Brownlee who has shocked the world’s legal fraternity with legislation that puts NZ into the fascist state zone; Shotgun Bill English who is obviously convincing Kiwis how much better off they are with $5 extra in their pockets, $10 GST removed from their pockets, with the ‘incentive’ to work more than their usual 50, 60, 70, 80 hour weeks to get ahead onto the sickness benefit from mental and physical exhaustion, but more importantly taxes hijacked out of public good departments like health and education meaning a future 2011 focus on self-funding health, education…; Wodney Hide – it’s all been said and still with Key backing Hide obviously the public like Hide too.

    Interesting isn’t it how people hated the nanny state but love the authoritarian state which is taking away their working rights, their state rights to decent health, education, welfare. Go figure.

  11. Anne 11

    The answer to Key’s (and the NAct govt.’s) popularity is simple and sad. NZers are politically ignorant. I hesitate to say stupid because most are not. But in a political sense the majority are indolent and can’t be bothered to think for themselves. They are happy to leave it to the MSM to do it for them. Therein lies the awful travesty.

    • Draco T Bastard 11.1

      /agreed

    • nzfp 11.2

      But in a political sense the majority are indolent and can’t be bothered to think for themselves

      Or maybe the majority are too busy busting their gut with their nose to the grindstone paying the interest debt on their mortgage / credit cards / Higher Purchase agreements etc… which they use to cover the shortfall in their wages and the increase in living costs – particularly the huge inflation in home values.

      Either way Anne, I agree – it leaves our fellow New Zealanders politically ignorant, but I would argue that it isn’t entirely a matter of choice – equality of opportunity and all right?

      • Lats 11.2.1

        There are actually some quite interesting things going on with political “ignorance” in this country. A friend of mine is an economics lecturer at Canterbury University, and among other things he conducts research on politics and policy making. One of his more interesting papers was a discussion of levels of political knowledge in this country, with a breakdown the indicators for this. Interestingly liberal voters tend to be more politically savvy than conservatives, and higher education is also an indicator for political sophistication. For a link to his paper hit this:
        http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1352661

  12. deemac 12

    anyone who thinks the recession is over should walk down Lambton Quay. Even on Wellington’s Golden Mile, every other retailer has a sale on. The economy is still hurting and the government’s still doing sod all about it.

  13. tsmithfield 13

    “Right, so because National has no policy for creating jobs, we should be grateful that there was an earthquake in Canterbury to spur the jobs market?”

    Just being consistent. It looks to me like Marty is blaming National for jobs lost due to the earthquake. So, to be consistent, credit National for jobs created due to the earthquake. Anyway, given the scale of the event, we should be grateful that there are only going to be 500 jobs lost, not thousands.

    While National might not be responsible for the work required from the earthquake, they are doing their best to get the rebuilding process up and running as quickly as possible so jobs should come on stream a lot sooner.

    • felix 13.1

      And the 1500 council workers in Auckland, 150 mushroom workers in Morrinsville, and 23 at MTV?

      (Just in the interests of consistency)

      • tsmithfield 13.1.1

        Obviously far too many council workers in the first place if we can lose 1500 of them in a restructuring. Not too concerned about those workers. If they have talent they should probably get another job before they leave the current one. The ones that don’t will probably be in for a hefty redundancy pay out, so they should be OK for quite awhile.

        The 150 jobs at Morrinsville will in part be offset with job gains at the Christchurch plant where the work is being shifted to. Who knows, some of those workers might be offered jobs in the ChCh plant if they don’t mind shifting.

        Don’t know about the 23 MTV jobs so I can’t really comment.

        Anyway, its all a bit of a red hearing. What Marty doesn’t know about is how many jobs are being created in the economy right at the moment. Jobs are always being lost and created. Lets wait until the next unemployment figures before getting too excited.

        • felix 13.1.1.1

          Couple of things:

          “Obviously far too many council workers in the first place if we can lose 1500 of them in a restructuring.”

          Who says we can? All experimental at this stage really.

          “If they have talent they should probably get another job before they leave the current one.”

          Big maybe. Where are these jobs? Who absorbs 1500 workers? If there are 1500 jobs to go to then why aren’t they filled already considering the massive pool of already unemployed workers?

          “The ones that don’t will probably be in for a hefty redundancy pay out, so they should be OK for quite awhile.”

          Probably? Says who? Hefty? How much? Quite a while? How long? That’s pure conjecture ts. If you have details share them.

          “The 150 jobs at Morrinsville will in part be offset with job gains at the Christchurch plant where the work is being shifted to. Who knows, some of those workers might be offered jobs in the ChCh plant if they don’t mind shifting.”

          Awesome. Pack up your family, leave your schools, your friends, your community, go live on another ISLAND to keep your factory job with a company who have been falling short of basic health, safety, and environmental standards for decades. Oh and p.s. ChCh is having a few unemployment issues too at the moment.

          “Jobs are always being lost and created. Lets wait until the next unemployment figures before getting too excited.”

          Have you been saying that for the last 3 years? Have you noticed the trend yet?

  14. Lats 14

    All those extra people on the unemployment benefit will get a whole extra $4 per week thanks to the very generous tax cuts provided by Key and his cronies. Thats once they have been through their stand-down period where they get no income at all. Then of course there is GST to consider. They will be so much better off under this regime. Thanks Uncle John.
    [/sarcasm]

    • felix 14.1

      Actually it’s not even that much for most. http://www.taxguide.govt.nz/benefit.aspx

      It’s a 2.02% increase which is supposed to offset the GST rise (but not the fuel excise rise, car rego rise, or inflation)

    • Jim Nald 14.2

      Seen the Granny Herald piece: “Most Kiwis will have a few dollars more tomorrow” ?
      Waahaa. Donkey gives peanuts to you monkeys. The lionshare goes to him and his mates.
      Your fantastic tax cuts will disappear with all the various price rises.
      Whoodeedoo. Poof!
      Boohoo.

  15. Roflcopter 15

    Marty, did Travellerev ask you to put in the bit about National causing the earthquake, resulting in the loss of 500 jobs?

    • Colonial Viper 15.1

      Oh Rofl, don’t be silly, it was National’s actions after the earthquake which resulted in the loss of 500 jobs. Give financial speculators $1,700,000,000 but won’t help hurting businesses a few tens of millions of dollars to help cover their wage bills for a few weeks, that kind of thing.

  16. JonL 16

    “(only if they take a useful subject though, no BA allowed). ”
    Probably the most useful subject you can take would be a BA, majoring in History and philosophy – giving you (hopefully) an appreciation of where we came from, and how, including all the stuff ups of the past, and an enhanced ability to think and create a cohesive argument. – all totally lost on “money at all costs” types, though……

    • Draco T Bastard 16.1

      History is awesome – especially economic history. Study that and you’ll see the massive gaps in the neo-liberal theory of the free-market. After studying it myself I began to get really irritated by people who belittled Michael Cullen for being a “history teacher”. You can learn more about economics from reading the history than you can by reading the text books.

  17. aj 17

    ‘doomed to repair it’ lol

  18. alloverrover 18

    if this link and its impact on the NZ economy is only 1/10 th right we are all out of a job. We don’t have a functioning economy.

    The Canterbury University study’s alarming conclusion is that with just 10% less fuel available, New Zealand’s economy would shrink by around $115 billion in just five years. If a 10% fuel restraint continued for 20 years, New Zealand economy would shrink by $412 billion compared to a business as usual scenario.

    [lprent: fixed the lousy linking. ]

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