It’s interesting to see how Irish’s ‘rabbit from a hat’ metaphor has taken off for describing this Budget. Some, like Tracey Watkins, are even using it positively. She needs to have a bit more of a think about what the rabbit from a hat is.
The rabbit itself is nothing special. In fact, in this case it’s a borrowed bunny. Bill English is borrowing the billion dollars it’s costing to reduce the middle tax rate by a larger than indicated amount. The magician has presented it as a gift for us but we have to pay for it, with interest.
What makes the rabbit seem extraordinary is a bit of sleight of hand. You’re looking one way and, as Irish predicted, along comes something that you didn’t think would happen. Nothing magical has taken place, you’ve just been spun.
Now, there’s another layer. Street magicians often work in cahoots with pickpockets. While we’re distracted with the rabbit ‘magically’ appearing from the hat, the pickpocket is moving through the crowd – nicking early childhood education funding here, state housing money, funding for home help for the elderly.
The media has this strange tendency to portray tax cuts as costless, as manna from heaven. It’s as if they think that the money was just stilling in a giant vault, unused. In fact, every tax cut means a higher tax somewhere else, a spending cut, or more borrowing, as Labour’s video cutely illustrates:
The gap between the way the media portrays tax cuts and the reality is important because surveys show that if you ask people ‘do you want a tax cut or better public services?’ people say ‘better public services’ but if you just say ‘do you want a tax cut?’ people say ‘yes’. By only giving half the story, the media fundamentally alters the public’s perception of and opinion on tax changes.
In the end, we’re left paying for a bunny, and having to find private money to make up for public spending cuts. For a government to get praised for that is some trick.