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Taxpayer shafted again

Written By: - Date published: 3:53 pm, September 15th, 2009 - 52 comments
Categories: Environment, national, tax - Tags:

National seems to be making a bit of a habit of shafting the taxpayer. Before the election we were promised significant tax cuts, “North of $50” per week. We had John Key’s personal guarantee. Key said “New Zealanders will be able to believe our tax cuts, they will be able to trust our tax cuts…”. Did those tax cuts happen? Hell they did. National broke its promises quicker than you could say “words are cheap”*. Far from cutting taxes, National is now considering a range of new taxes including increases to GST (a disaster).

And now this. In the deal cut with the Maori Party the tax payer gets the bill for New Zealand’s carbon emissions. It’s no longer polluter pays, it’s you and me the taxpayer who picks up the tab:

At current carbon prices, that amounts to a subsidy of $428.2 million every year, straight into the pockets of polluters’ (mostly foreign) shareholders.

If prices increase, or if polluters (with little incentive to reduce) pollute more, that bill will only get higher. And we pay it every year. $482 million is a lot of primary health care. It’s a lot of adult education classes. It’s a lot of research and development. Except – no it isn’t! Because we’re shipping that money overseas instead.

Before the last election National (by ignoring the costs of ongoing subsidies to Toll) successfully spun the line that Labour had paid too much to Australia to buy back KiwiRail. Whether the price was right or wrong we got a concrete strategic asset for our one off payment. What do we get for this $482 million per year? More pollution, less international credibility and damage to our 100% pure brand. Hey tax payers – does that sound like value for money?

In case it needs saying again, National were not wrong to cancel their tax cuts, they were wrong to promise them in the first place.

52 comments on “Taxpayer shafted again ”

  1. Peter Johns - bigoted troll in jerkoff mode 1

    I thought you were all for increased taxes rOb, or is it Labour tax good, National tax bad.
    How do we know Goff has got his figures right?

    BTW, we did pay too much for Kiwirail, spin that as much as you like but it is now a worthless peice of junk.

    • lprent 1.1

      So? The price that National is socking on to us to pay to help their sponsors makes any costs involved in Kiwirail (even the fantasy ones you prefer) look like peanuts.

      Basically National is rorting the taxpayer so high you can’t even squeal “double dipton” as your balls get crushed by tax increases. Now you were talking big time about tax-cuts last year. Your favourite government is preparing to give you tax increases that will remove the cuts that Cullen and Dipton gave last year.

      Both sets of taxcuts were daft. This set of tax increases will go almost entirely on the people who cannot afford them. Looks like this pack of clowns are going for the artificially prolonged recession trick again.

  2. dave 2

    National is now considering….increases to GST

    No it isn’t. Don’t believe everything the media writes – not that the media said that National is considering increases to GST – just like don’t believe everything the Standard blogs.

    • lprent 2.1

      The simple fact is that they have to raise taxes somewhere. They are currently running some significant deficits and keep adding major costs while saving peanuts. If not GST then where?

      Unless you like Key also believe that smiles beat economic reality. Mind you he seems a lot less cheerful these days

  3. vidiot 3

    R0b – sorry did you expect the businesses to carry the cost of this exercise and not pass it on to the end consumer ?

    Perhaps if we went back and look at why 80 odd % of our forests (read: native) aren’t treated as Carbon sinks, things might be different.

    Ten years ago you could have asked any tourist why they came to NZ, and the bulk would say for the ‘clean green landscape’ – what’s changed since then ? sod all – it’s just perception.

    ‘damage to our 100% pure brand’ is more likely when bad shit (attacks on tourists, bus crashes, etc) happen to the tourists. How bad do you think Aussies tourism reputation was tarnished with the Peter Falconio abduction ?

    • Maynard J 3.1

      Give those costs business to pass onto the consumer by all means. That is what the issue here is, fundamentally. Instead of regulation reducing demand to drive down consumption of goods with negative externalities, we are all being taxed to subsidise such consumption, with the pork going straight to polluters.

    • Clarke 3.2

      Ten years ago you could have asked any tourist why they came to NZ, and the bulk would say for the ‘clean green landscape’ what’s changed since then?

      You can’t swim in the rivers. For this we can thank the dairy farmers that we’ll be subsidising at the rate of $800 million per annum.

      • mike 3.2.1

        Who was in charge for 9 of those 10 years while the damage was being done prey tell?

        • Pascal's bookie

          A bunch of people with a touching faith in self regulating markets

        • Clarke

          “They were doing it too!!” – a defence unworthy of a 12 year old. So should we expect the National government to get tough on water quality standards? Or should we simply expect pigs to fly?

    • Draco T Bastard 3.3

      sorry did you expect the businesses to carry the cost of this exercise and not pass it on to the end consumer ?

      I fully expect them to do so but this has another side effect. Some of those products will be priced off the market due to the carbon costs being more than people are willing to pay for the item. This, amazingly enough, promotes sustainability.

      God, some peoples lack of logic pisses me off. Wah, it’ll increase the costs waaaaaah. Yeah, that’s the whole bloody point.

  4. Zaphod Beeblebrox 4

    How can you be 100% pure when you are the ONLY developed country in the world without vehicle emission standards (yes Australia is about to introduce them) and you start introducing $400 mill annual subsidies to your CO2 polluters (not even counting agriculture)?

    Hard to believe this won’t be used against us

  5. BLiP 5

    Personal taxes will be further reduced from 1 April 2010 and from 1 April 2011.  As a result, by 1 April 2011 around 80% of New Zealand taxpayers will end up paying no more than 20c in tax for every additional dollar that they earn.

    This programme of tax reduction is a central part of the economic plan of my Government, because it believes in encouraging New Zealanders to get ahead under their own steam, and it views personal tax reductions as an essential step in ensuring that can happen.

    John Key 9th December 2008

    • burt 5.1

      The economy is in good shape – Labour 2008.

      Multiple references; http://www.thestandard.org.nz/tag/economy/

      • Clarke 5.1.1

        … and things have sure improved under National! After nine months in power, unemployment has nearly doubled, growth is negative, wages are static and interest rates are about to start rising. Is that “being ambitious for New Zealand”, burt?

        • burt

          The failed policies of the 90’s 2k’s will take years to reverse Clarke….

          • Clarke

            Oh I don’t think so … it hasn’t taken English very long at all to piss away Cullen’s surpluses.

            Or perhaps that slip of the keyboard was alluding to National’s disastrous management of the early 90’s and the recession that was longer, deeper and harder than any of our trading partners? Or maybe you meant to point out the dead hand of Muldoonism and the lost decade of price controls, rampant inflation and SMPs?

            Face it, by any reasonable standard your lot are a hopelessly inept bunch of economic managers. And the massive subsidies they’ve just granted to their mates simply underline that fact.

            • burt

              You should do stand up.

            • Clarke

              Nah, there’s more than enough entertainment in watching an ex-farmer from Dipton with no economic credentials and even less expertise stuff up the economy. It would be hilarious if there weren’t real people’s livelihoods at stake.

          • Zaphod Beeblebrox

            Before this year, for all of this decade NZ’s unemployment was continually lower than Australia’s.
            Then they got a Labour Government and we got a National one. Guess what? Their unemployment is now lower. Bill’s solution?? Sacking more people.

      • BLiP 5.1.2

        The economy is in good shape Labour 2008.

        Yes. In fact, here’s the Double Dipton Blinglish confirming that statement.

        • burt

          I’m surprised you think English is credible BLiP. Remind me never to say his house situation is bollix when you are lurking because you will quote him saying it was all above board at me.

          • felix

            So BLiP is bound to agree with everything English says and does?

            Weird, must have missed that memo. I assume it applies to you too, burt? I’ve seen you agree with English so you too must be bound by the same bizarre rule, no?

  6. The question is: is this a deliberate plan (Machiavellian in its opacity) or are they simply muddling through, having spent the previous nine years staring at their navels, or had they a plan until Brash was rolled, whereupon all turned to custard. I no longer think the first runs as an argument (unless one thinks that piecemeal favours to their backers add up to a strategy). The second and the third could be combined to explain the current incoherence of government policy. The more Mr English talks of an overarching strategy, the further it seems from reality.

    • Pascal's bookie 6.1

      The plan is to swallow as many dead rats as they need to in order to get re-elected with a mandate to do whatever the fuck they want.

  7. Ari 7

    Btw, George D says it works out to about $1.2 million, not $.428 million.

  8. burt 8

    I clearly woke up in a parallel universe this morning;

    The standard is complaining about the govt introducing new taxes and Kiwiblog is justifying it.

    • Jeremy 8.1

      I think rOb is in fact complaining about the fact National’s election promises were bullshit rather than the actual way in which they were bullshit.

    • Ari 8.2

      Did you miss the note at the end burt, or do you just have an extraordinarily low reading age? 😉

      • burt 8.2.1


        You can do better than that;

        * In case it needs saying again, National were not wrong to cancel their tax cuts, they were wrong to promise them in the first place.

        Has absolutely noting to do with rOb complaining about the introduction of new taxes.

        • BLiP

          Its not a new tax – its a subsidy for business. Corporate welfare, the National Ltd’s version of the New Deal.

        • roger nome

          It ain’t so surprising Burt – the left opposes taxes which disadvantge the already, relitively worse off, where as the right likes to punish the poor in any way possible (which includes higher taxes). See, no need for a parallel universe.

  9. toad 9

    I’ve often (until now) defended the Māori Party, which I guess is not surprising, since historically they have been the party that has voted the same way as the Greens on the greatest number of issues.

    But this is an absolute betrayal sheer hypocrisy and duplicity. Just compare what the Māori Party said in their Minority Report in the Emissions Trading Scheme Review Select Committee report with what they have actually signed up to.

  10. I would like to know how this is the taxpayer being shafted again? If anything, the scheme that the Nats and Maori party seek to implement actually reduces the burden on New Zealanders.

    No matter what approach is taken it is the consumer who has to pay for climate change policies. Polluter pays is rubbish – they simply pass that on to us. Make the petrol companies pay – petrol goes up, make the electricity companies pay – power prices go up, make farmers pay – the price of milk goes up. So what is common about all three? They are core goods used by all and relied on by those at in the lowest socio-economic group.

    By shifting the burden to the taxpayer you remove the burden from those in the lowest socio-economic group and onto those at the top. Why? Because the rich pay far and away the highest proportion of taxation in this country. Just as GST is discriminatory towards to poor, and will always disadvantage them, so to will an ETS which shifts all the cost onto the pollutors (and then onto their consumers). Would you rather the taxpayers (mainly the middle to upper classes in NZ) paying for this experiement while we figure out what is actually going to happen or would you rather that burden is placed on those who can least afford for their petrol, power and milk prices to go up?

    Remember what happened in the 1980’s when NZ undertook a vast experiment in economic management, when we decided to lead the world, and set the example. TINA did not work then and it will not work now.

    • Marty G 10.1

      No. You should make the creator of an externality pay it’s cost and not the taxpayer. With the money, reduce taxes for everyone with a tax-free bracket.

      • So that was what the left planned to do? Cannot remember that in any of their election manifestos.
        And that is certainly not what Rob is suggesting in this post – there is no mention at all of ensuring that those in the lowest socio-economic group are shielded from the large price increases that a fully market-driven ETS would provide.

        I do agree with you Marty, that ultimately we should shift the burden onto the consumers, and a tax free bracket of up to $20,000 should be the aim. But in the meantime, while we figure out what the cost of this is going to be, why not socialise it for a while and let the rich carry most of the burden.

    • toad 10.2

      PNP, the impact of a polluter pays approach can be addressed by polluters in two ways. Sure, they can pass on their costs, and of course some of those costs will be passed on. But they can also reduce the extent of their pollution, which is the object of the exercise.

      Higher costs of purchasing goods that create a lot of pollution in their production will also have an impact of cutting consumption – eg, if electricity costs more, electricity conservation measures become more attractive, so even when costs are passed on their is some impact on pollution.

      The Greens wanted targeted assistance to low or even middle income earners address the increased cost, but leaving those who can well afford it to pay the full cost.

      I don’t see why I should be subsidising Bill English’s power bill when he earns almost 5 times what I do (the one in Dipton, that is – I’m already subsidising the one in Wellington through Ministerial allowances).

      • You had me up until the last paragraph Toad. You are not subsidising his power bill, if anything he is subsidising yours. His share of tax is presumably 5x as great as yours and given that it is the tax payer under the current proposal who bears the cost then the greatest cost falls on him and others like him. And lets not forget that given his higher tax payments each year he is also subsidising your (and mine for that matter) education, healthcare, our welfare system etc etc. Lets not beat up on the rich because they earn more than we do, they also contribute a lot more as well.

        Folowing on from Marty’s post – why do you support targeted assistance over, say, a tax free bracket? What do you see as the advantages?

        And while I have no problem with the free market approach that you advocate – problems arise when there is no practical way to reduce emissions in a given industry. Electricity, and petrol are easy … agriculture not so.

        • Zaphod Beeblebrox

          I gather from you last para you favour ETS or carbon tax for petrol and electricity because they are elastic but not agriculture?

          Problem with Carbon is that it doesn’t matter how it is produced, there is too much of it in the air and its doing bad things to the planet, whether its CO2, CH4 or whatever gas. We need to find ways to lock it up in the ground. Agriculture needs to be part of the solution, if we decide to live in a capitalist society, we need to find market and scientific mechanisms to achieve that. Just because its hard isn’t an excuse to ignore a problem.

          We didn’t say- ‘don’t worry about the ozone hole- its too hard to fix’. We did something about it.

        • toad

          PNP, Marty’s suggestion of a tax free bracket at the bottom of the tax scale is straight out of Green Party policy – that is precisely the sort of “targeted assistance” I was meaning – it has a far greater proportional advantage for me than it does for someone on Bill English’s salary.

          As for your suggestion that English will be subsidising my power bill, that is possible but I suspect highly unlikely. Just because his salary is $278,000 pa doesn’t mean that is his taxable income. Someone who exploits the rules and arranges his affairs to claim a $48,000 accommodation allowance for his own home will likely also pay stuff all tax. What’s the bet the Dipton farm makes a thumping great paper loss, and there’s LAQC arrangement that allows him to offset this against his Parliamentary salary?

          • burt


            A tax free bottom bracket as part of Green party policy was almost enough to make me vote Green. Labour were anti it and Cullen never did explain why that was other than he didn’t agree with it. However (and I might have missed the fine print) I saw nothing in the Green party policy that addressed welfare dependency which given a substantial tax free bracket would be very possible to address in a meaningful way.

  11. graham 11

    do the lefties live in your own little world the people in this country love john key

    • Marty G 11.1

      You love him, does that mean we have to love him too? Opposition is legitimate and necessary in a democracy

    • Zaphod Beeblebrox 11.2

      Doesn’t mean you should agree with everything he does.

    • Armchair Critic 11.3

      Round my way he has gone from celebrated to tolerated in a year, and that’s with your fellow dairy farmers, graham. The grumbles are getting louder, I just hope the trend continues. Two years to go.

  12. toad 12

    @PNP 9:50 am

    Electricity, and petrol are easy agriculture not so.

    Methane is not easy – agreed. But there is much that can be done to reduce nitrous oxide emissions from agriculture, and that’s about half of it.

  13. vidiot 13

    How about we clear fell say 30% of our native Forrest & scrubland, and then replant it in pine (making them Kyoto Forrest s), thus earning us Carbon credits and ensuring our clean green reputation & image ?

    There’s about 9 million hectares of land/trees/greenery that isn’t working for us, who’s going to complain if we turn 1/3rd of that over to Carbon sinks.

    • BLiP 13.1

      Not as effective but equally unacceptable politically as digging up State Highway 1 and planting that with pine trees. Everyone can use rail/air for travel between cities and broadband for doing business. That would provide a permanent fix for our contribution to the reduction of emmissions AND we get to keep the native forests.

      • vidiot 13.1.1

        I like the SH1idea, you could build a high speed ‘flying fox’ network from Tree to Tree.

        The run from the top of the Bombays down to Mercer would be wonderfully scenic.

  14. randal 14

    sorry guys but that north of $50 is going to be used to subsidise ineeficient industries for a new model ets which instead of paying to emit will now be paid to emit and whats more with our money! looks like its south for them guys huh?

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