In my opinion Pundit is one of the treasures of the NZ news/blog space. The posts are frequently excellent, in a world where quality journalism is increasingly rare. A recent piece by one of the founders, Tim Watkin, is a case in point. After a brief topical hook:
It’s been fascinating to find out that I’m paying off Bill English’s mortgage as well as my own. So much for the party of individual responsibility. But while everyone is fussing about where the finance minister lives, they’re ignoring his words.
Tim gets down to business:
The New Zealand Herald ran a remarkable down page story yesterday that has gone largely uncommented. At the National party conference over the weekend the finance minister told Audrey Young that New Zealand has to get out of the tax cut “mode” it’s been in for the past five years. Of course it was the National Opposition, with able support from ACT, that put us in tax cut mode, but putting that aside, here’s what else he said to reporters: “There is no possibility of just cutting taxes. The Government is short of revenue. The only question is whether there is a different mix of tax.”
Much of the rest of the article explores what “a different mix” might mean. Increasing GST is one possibility that fits with National’s agenda:
It’s a solution that moves the tax burden from the rich (those in the top tax bracket) to the poor (because we all consume). And that’s no solution at all.
Hear hear! Look out for signs of National testing the waters on that noxious proposal. Now to head off on a tangent that interests me about National and taxes – the topic of National’s cancelled tax cuts:
On one hand you could accuse the government of rank hypocrisy. It spent years hammering Labour on the need for tax cuts, mocking them for their chewing gum attempts at tax reform, and as soon as they get the chance, they rule out tax cuts. On the other, you can praise this government for not being blind ideologues, following policy in to the valley of debt. Previous National governments would have stood on principle and cut anyway, so the emerging pragmatism of this administration should be welcomed.
I think Tim missed a trick there. If National actually believe what they say then cutting taxes wasn’t just ideology, it was also the most pragmatic thing they could do. Tax cuts are supposed to “grow the economy”, they were explicitly a part of National’s response to the economic crisis. National told us this time and again both before and after the election. So why cancel tax cuts? Why drop the tool that was supposed to rescue us from the recession? I’ve covered this topic before, and the only conclusion that I can draw is that National never actually believed these claims at all. It was all just an empty election bribe.
Hmmmm. Well, anyway, go read Tim’s piece over at Pundit. (I am in no way connected with Pundit).