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Tax cuts – simple question simple answer

Written By: - Date published: 9:54 pm, September 7th, 2014 - 84 comments
Categories: bill english, election 2014, john key, national, tax - Tags: , ,

Duncan Garner just tweeted an simple question:

Question for tmrw – when we’ve just borrowed $55b over 6 years how on earth are tax cuts suddenly affordable? @RadioLIVENZ Drive 3-6pm

Here’s a simple answer. They aren’t.

Of course they aren’t affordable, none of National’s tax cuts have been affordable (see debt), they are election bribes pure and simple. Bill English knows it, but John Key gets to promise anything anyway. While Cunliffe gets hacked up in the media for confusion over a detail of a complex policy, and while Labour has all its policy fully costed on its web site, National gets away with this inconsistent, un-costed, unaffordable nonsense. Cut to picture of Key posing with an All Black…

84 comments on “Tax cuts – simple question simple answer ”

  1. b waghorn 1

    Please use my $4.95 to feed a kid

  2. Whateva next? 2

    This trick akshully worked for That her for 11 long years

  3. Clemgeopin 3

    It is not entirely National’s fault. It is the fault of the gullible good folk, the politically ignorant public that seem to like Key’s smile and slime. As per the polls (dodgy or not), there seem to be about 50% of them around! Go figure!

  4. Ant 4

    I think McCaw costed it.

  5. Blue 5

    Welcome to New Zealand, where sinking the country into massive debt, cutting some of the lowest taxes in the OECD even further and relying on an earthquake, milk powder and a prayer is considered good economic management.

  6. ScottGN 6

    According to TV3 59% of National voters disapprove of tax cuts for low and medium income earners at this election. Well wouldn’t those fuckers, after all they got their tax cut six long years ago and they’ve been enjoying it ever since. The rest of us got an increase to GST and all the other tax hikes National has imposed over the years.

    • framu 6.1

      small point ScottGN – the cuts arent for low and middle earners, but for the lower and middle bands

      ie: everyone will get it

  7. cogito 7

    One thing’s for sure – any money Key gives away in tax cuts he’ll get back by hiking up other charges like he did last time with higher gst, fuel tax, rucs etc, all of which impacted directly on ordinary folk.

    Hopefully David Cunliffe will absolutely hammer Key when they meet for their next debate. Key has to be stopped and rejected by the electorate.

  8. Kiwiri 8

    Tax cuts???

    Come on, how about National reverse any or all of the 15 taxes they threw at us the past few years?

    1. GST increase from 12.5% to 15%
    2. Increased taxes on KiwiSaver
    3. Compulsory student loan payment increase from 10% to 12%
    4. Increased tertiary fees
    5. The 2012 ‘Paperboy’ tax
    6. Civil Aviation Authority fees rise
    7. Additional fuel tax increase of 9 cents with annual CPI increases locked in for perpetuity
    8. Road User Charges increased
    9. New annual student loan fees introduced
    10. Massive unnecessary ACC levy increases
    11. Prescription fees increased by 66%
    12. New online company filing fees imposed on businesses
    13. Creeping expansion of the scope of Fringe Benefit Taxes – National tried to tax car parks and plain-clothes police uniforms
    14. Lowering of Working for Families abatement threshold and increasing the abatement rate, taking money out of the pockets of families
    15. Imposing a $900 Family Court fee

    The info available as noted and provided by Labour – source:
    http://www.scoop.co.nz/stories/PA1409/S00053/at-least-15-new-taxes-under-national.htm

    • cogito 8.1

      DC needs to memorise this and hit Key hard with it. Key needs to be held accountable for his lies.

    • Bearded Git 8.2

      Massive increase in fee to appeal to the Environment Court-from $55 to $511.

      This one of the Nats many assaults on democracy. One wonders why the Nats policy to gut the RMA is getting little airplay.

  9. Ad 9

    This is one moment for Labour to re-frame their Capital Gains Tax v Income Tax cuts.

    Labour could come out with a concrete program stating what it will buy New Zealand, versus what a little income tax cut will buy the average worker.

    National has been waiting until very late in this election to do this, for best electoral effect. Labour’s support will corrode further unless it has a strong and well rehearsed response that is simple, and good for ordinary people.

    • Draco T Bastard 9.1

      The tax cuts won’t be for the average worker. Same as last time they weren’t for the average worker but for the rich. National doesn’t care about the average worker – just the rich.

      • Ad 9.1.1

        You may well be right.

        But how will CGT benefit the average worker?
        That’s my point – go head to head.

        • KJT 9.1.1.1

          By broadening the tax base and lessoning the economically disastrous effect of speculation, simply bidding up the price of existing assets.

          I don’t see why the “family home” should be excluded unless, maybe, they are under the value range possessed by the median New Zealander. I can see many families owning half a dozen, million dollar, “family homes!”.

    • Gosman 9.2

      Capital gains tax won’t buy anything for the average New Zealand. It is government revenue that will go in to the general fund and be spent by the government anyway they want.

      • Draco T Bastard 9.2.1

        So?

        I don’t have a problem with government being properly funded.

        Of course, if we were doing things properly government would never have a problem with funding. As it stands though taxes are used to limit government, to prevent it doing what is best for the majority.

      • framu 9.2.2

        well there you have it

        goose step doesnt see the govt as being something that is by and for the NZ public

      • KJT 9.2.3

        Healthcare, infrastructure, transport links and education do not benefit the average New Zealander in the Gosman world. Planet Key.

  10. tc 10

    So the gooner bravely tweets the obvious, how about he and his spineless colleagues but this to key over and over again along with his use of sis documents and jason ede.

    so the TMRW gets to be the strawman now, hooten sets it up so the puppetts can all sing along with lead muppett duncan toeing the line as a good corporate shill does.

  11. Skinny 11

    It just goes to show Nationals internal polling shows they are losing this election, hence the switch to what is basically a tax cut bribe. Be interested to see what bracket gets the cut. Will it be the low income or the middle income earners, I predict it is the latter middle income earners as there are more votes in it for National.

  12. Dont worry. Be happy 12

    Just listened to a patsy interview on Nat Rad. Susie purring away in her delightful accent as if that’s enough when a Prime Minister signals he’s about to lie to what passes for the fourth estate these days by starting the lie with, “So…..”

    Susie, the Nats have not run surpluses, they have run the country headlong into debt….stop purring and check if you have any claws. Nows the time to use them. I’m presuming you already know the facts…..

  13. Gosman 13

    Funny how tax cuts are never affordable but increased government spending always is according to many lefties.

    • framu 13.1

      oh look – its you again – making stupid irrelevant and over simplified comments to suit an idiot agenda

      your painfully transparent

    • Kaplan 13.2

      Funny how, despite your myth repetition, Labour managed to keep us in surplus and with record low levels of debt.

      • dv 13.2.1

        Current debt

        86,880,443,802

        • infused 13.2.1.1

          Who gives a shit? Does it affect you? No. Has it kept this country running and people employed? Yes.

          Shut the fuck up about debt. It doesn’t matter.

          http://www.tradingeconomics.com/new-zealand/government-debt-to-gdp

          When this starts getting close to 70%, you may have some sort of point.

          • dv 13.2.1.1.1

            Huh
            ‘Shut the fuck up about debt. It doesn’t matter.

            Then you say THIS!!!,
            ‘Then this starts getting close to 70%, you may have some sort of point
            SO debt DOES matter!!!

            Yes – it does affect me.
            The interest (1.7 billion) alone will cost my household about $1200 pa from tax

            I do agree that the debt it has helped to keep people in work.
            BUT
            If there had not been the first tax cuts the debt would not have been as much debt.

            I do find it interesting that you want me to consider only my own position.

            AND
            That debt doesn’t matter!!!

            PS
            The debt is now
            NZ$ 86,881,080,046

          • Nic the NZer 13.2.1.1.2

            Plenty of countries with 70% debt to gdp ratios and no problems (excluding Eurozone for obvious reasons). The Rogoff-Reinhardt paper was completely debunked. There is no problem near 70% either.

            • dv 13.2.1.1.2.1

              Plenty is 20 out of 160 countries???

              At 70% debt my household interest cost becomes about $3000 per year.

              AND and the Nat bill becomes about 5 billion- or the asset sale return EVERY year.

              • Nic the NZer

                So with 16 countries like NZ over 70% debt to GDP surely on of them is in trouble? No? There is no issue with government debt for a country like New Zealand.

                • dv

                  Well Nic we will not agree.
                  I can’t see paying 5bill interest bill per year as useful.

                  • Nic the NZer

                    Its not the most useful thing the govt does by any means. The main reason its done is so the RBNZ can maintain the OCR above zero and control monetary policy. None of this causes any issue in terms of govt solvency however.

                  • Colonial Viper

                    It’s not useful but Nic is saying its not a problem. And the interest bill is more like $3B p.a.

                    And its not like we have to come up with the money. We just borrow more to pay the interest.

                    • dv

                      My $5 Bill was on a 70% debt to gdp not the current debt.

                      “And its not like we have to come up with the money. We just borrow more to pay the interest.

                      Oh shit!!!

                    • Nic the NZer

                      You appear to be suffering from a form of Arithmophobia dv. Oh shit doesnt quite cover it as an explanation for why govt debt is a problem however. You have 16 countries with over 70% debt to gdp and people are saying NZ is broke. Being broke doesn’t appear to be a problem or even different to not being broke in fact. There is no problem here that you can identify for us.

      • Gosman 13.2.2

        Funny how they left a structural deficit that was predicted to last around 10 years.

        • framu 13.2.2.1

          fuuuuuuccckkkkkk!!!!!!!!!!!!!!!!!!!!!!!!!

          the prediction that was made before the GFC and hasnt been updated since so doesnt take into account a single thing that might have been done differently by anyone, anywhere

          why do you keep repeating such stupid arguments?

        • Draco T Bastard 13.2.2.2

          No they didn’t. That was a beat up by National. Just more dirty politics.

    • tricledrown 13.3

      Borrowing $60billion with a $5 billion a year cost to pay the debt back ,then Dairy and commodities are tanking goose you are full of it!
      National are spending virtually the same amount as Labour as well but the Media never question that!
      Act on .6% and going downhill Whyte is an idiot!

    • disturbed 13.4

      Gosman your cronies increased taxes so many places.

      Fuel taxes the latest three in a row!!!

      As these are what a good Nat called a tax on a tax that Muldoon even disapproved of so don’t play “we don’t raise taxes” good guys. Stop lying to us all for once.

  14. philj 14

    The media has become the message. ( misquote from Marshall McLuhan). The left needs its own radio,tv internet network. Without the breadth of view, the demockary is dead.

    • Gosman 14.1

      Go on and set it up then or do you expect other people’s money (i.e. the Taxpayers) to help fund this for you?

      • Macro 14.1.1

        Now that’s a damn good idea!
        Wait a moment….. we supposedly already have a govt funded media! 🙁
        Which I suppose you NEVER watch.

        • Gosman 14.1.1.1

          Let’s just get this clear, you are expecting the government to fund a left wing orientated media out of taxpayers money much of which come from wealthy people who tend to vote for parties on the right – Is that correct?

          • meconism 14.1.1.1.1

            No we are expecting the voters to fund a media out of voters money. This bullshit you do where you transpose government with taxpayers and then voters illustrates the deceit in your thinking and your discourse. If they are taxpayers they are always taxpayers to the end of your argument they cannot become the government halfway through your argument to suit whatever hypothesis you realise you suddenly need to defend. Or you could just fuck off and stop wasting everyone’s time.

  15. BM 15

    WFF is a tax cut.

    • framu 15.1

      no – its an employer subsidy

      • BM 15.1.1

        It’s all coming out of the same pot.

        • framu 15.1.1.1

          doesnt make it a tax cut though

          small hint – who gets WWF and why?

          • BM 15.1.1.1.1

            People who can’t afford to breed or can’t afford the amount of kids they’ve decided to have.

            Initially to keep electing Labour.

            • Lanthanide 15.1.1.1.1.1

              …because although they have stable, full-time jobs, they don’t get paid a fair wage by their employers”

              FTFY.

              You might want to read this story about Aroha, the girl that John Key used for a publicity stunt in 2007: http://www.stuff.co.nz/national/politics/10468960/Aroha-of-McGehan-Close-flees-NZ

              She’s getting paid a wage that is not much less than my own, in a job that doesn’t sound particularly skilled or demanding, in Australia. Makes me wonder what I’d be worth over there.

              • BM

                It’s complete horse shit, she doesn’t get $38.00 an hour, Lots of Aussie posters pissing all over that claim, from what I’ve read it’s more likely $18.00 an hour.
                They reckon Coles is one of the most tightfisted employers in OZ.

                Just the reporter being a fuck wit and trying to stir up some anger.

                • Colonial Viper

                  $18/hr would be for standard time, $27/hr for weekends and $36/hr for stat days. Thereabouts. Unions and collective contracts are great.

  16. mike 16

    The answer to Garners question is not ‘they aren’t’ it’s ‘they’re not’.
    Much smoother with more punch.

  17. Nic the NZer 17

    Tax cuts are of course affordable. The problem is the government should give them now, not when the economy (maybe) returns to surplus. And to be fair the should be broad based, either lower GST or have a tax free income bracket.

    The problem is the National government is intending to return to surplus, wait for the effects of this negative stimulus to hit the economy and hope that the trade balance and housing bubble are still stimulating the economy enough to compensate for this. Better to stimulate the economy now as its still depressed.
    National debt is irrelevant thats why we have a reserve bank.

    • Lanthanide 17.1

      “Better to stimulate the economy now as its still depressed.”

      Not sure what reality you live in, given the economy is at its growth peak right now and predicted future growth is around 2%. That’s not “depressed”.

      • Nic the NZer 17.1.1

        Whats the unemployment rate? 5.6%. The economy is still depressed.

        • Lanthanide 17.1.1.1

          The economy is more than just employment.

          • Nic the NZer 17.1.1.1.1

            I am not saying that a tax cut is my ideal economic policy (I would prefer some more social spending and a job guarantee) but I am saying its affordable and a priority should be made of reaching full employment (because of the effects of inequality, the wage share of income, savings rates). A small tax break might be the best National has to offer. Its also affordable.

            The left will be doing a great disservice to their constituants if it puts off a good policy on employment to try to get a perfect policy around taxation. Taxing the wealthy does nothing to help the poor in and of itself.

        • miravox 17.1.1.2

          The rockstar is depressed?

          • Nic the NZer 17.1.1.2.1

            Seems to happen to a lot of them actually.

            The unemployment rate has only fallen as far as 5.6% and all I am really saying is that that is not good enough when full employment is achieveable if the govt wants it.

            At least NZ is not the UK which tried for a double dip recession and got a tripple dip recession. That was of course self inflicted.

            • miravox 17.1.1.2.1.1

              I agree entirely with your second sentence.

              The point about it being a ‘rockstar economy’ and ‘depressed’ is that the government is spinning depending on what its trying to focus on. Lanth is correct that the ecoonomy is more than the employment rate.

              The focus of the current government on low cost exports is facillitating low waged precarious jobs, sustained unemployment and environment degradation to produce growth that is short-term and benefitting only a small group of New Zealanders.

    • dv 17.2

      ‘National debt is irrelevant thats why we have a reserve bank.

      Ha printing??

      • Nic the NZer 17.2.1

        Yes, or more deficit spending which amounts to the same thing (as long as the reserve bank keeps controlling the OCR) in technical terms.

  18. Lanthanide 18

    It’s going to be a “chewing-gum tax-cut”. The only way it wouldn’t be, is if they lowered the threshold for the top tax band at the same time as increasing the bottom ones, to ensure that anyone earning in the top bracket does not receive a tax cut as a result of the changes. But I can’t see National doing that.

  19. wtl 19

    I thought they were going to restart contributions to the Cullen fund once the books were back in surplus? I guess that plan is gone – looks like the retirement age will end up going to 70 because National refuses to address the issue of Superannuation affordability.

    • Lanthanide 19.1

      I think you’re right. Key said this morning on the radio that they had 3 priorities:
      1. Grow the surplus
      2. Pay back debt
      3. Tax cuts

      Superannuation repayments didn’t get a mention.

      IIRC the last budget pushed the contributions back to 2020-2021?

  20. dave 20

    For those us in our early 40s this long term debt trend is very worrying .
    Tax cuts while growing the debt while selling the assets is leaving us nothing when we retire it looks bleak even house hold debt is staggering national is borrowing from the future again and i don’t think that is fair they stopped the Cullen fund gutted and taxed kiwi saver given us an insecure poorly paid work environment income cost ratios are screwed and they want to steal what is left of our retirements as well there total scum .

    • David H 20.1

      Is that what’s next I wonder . The country is in such a mess cant pay it’s bills so in come the Vampire’s to ‘fix things up with loans and other rorts’ Just like they did to Greece. But first they will take ALL our remaining assets including Kiwisaver and the Cullen fund. Is this TricKey’s Endgame? Just before he leaves for Hawaii and the praise of his bosses. NZ is broke and right for the pillaging.

      • Nic the NZer 20.1.1

        New Zealand can not become like Greece. New Zealand issues its own currency. The IMF can’t issue NZ$ so the IMF can’t bail NZ out anyway though it will never have to. Greece is on the Euro and therefore the problems arise. There wouldn’t even be a problem for Greece if they were allowed a much larger than 3% deficit under Maastrict treaty rules with the ECB. Now you know the difference.

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