Budget papers just released reveal that Treasury recommended a package of measures to reduce debt including an 8-year suspension of the Cullen fund contributions, new operating allowances of $1 billion, rather than $1.75 billion and cancelling the tax cuts and giving New Zealanders $1billion worth of one-off payments instead. This either would have taken the form of $300 to each taxpayer or $1200 to each single super annuitant and beneficiary,and $1800 to couples. National turned down the idea. Was it a good one?
It’s a better idea than tax-cuts, that’s for sure. One-off payments (ideally actually split into smaller payments over a couple of months) would have given an injection into the economy when it needed it without locking in a permanent decrease in government revenue as with tax cuts. Jobs would have been saved and, like a zap with an economic defibrillator, it may have helped get the economy ticking over again.
Even better than one-off payments much of which would have bee pissed away on consumer imports, would have been if the government had spent the money itself on large short-term projects to create jobs and improve our productive capacity for the future. A Green New Deal, like the Greens and Labour have called for, and which National hasn’t had the vision to take up.
– Marty G