After building a political career that has consisted of little more than calling for tax cuts and attacking those that were delivered, John Key will finally present his party’s tax cut package today. Already, they have had to reduce its size but they will still make it the central part of their mystical economic platform that is meant to stop emigration, lift us out of recession, prevent junior doctors’ strikes, and make our whites whiter. The supposed transformative powers of larger tax cuts underpins and defines National’s ‘time for a change’ message. So, they better deliver something that can make a difference
As a guide to what to expect, let’s take one element of National’s promises- reducing emigration via tax cuts. I find it hard to believe that anyone’s decision to emigrate to Australia or not is tipped by less than $2000. So, say, National could reduce emigration significantly by offering tax cuts, I think it’s fair to say that would need to offer more than $40 a week to most Kiwis above Labour’s tax cuts (which National dismissed as the block of cheese tax cuts). If they don’t pony up, their wailing that Kiwis are emigrating because of Labour’s tax policies will be revealed as completely hollow. As will their promise of transformative tax cuts.
Before the announcement, it is opportune to look again at the distribution of income as well who benefits and how much from the Government’s cuts:
[Update: Just saw this in the Herald: “The $50 reduction [for a worker on the average fulltime wage] won’t be reached until until April 2011, and will include the tax cuts Labour introduced on October 1.” Now, Labour’s cuts have already delivered $16 increasing to $32 by 2011 for the average worker. So, National will be offering just $6 a week than Labour each year to 2011. $6? All this over $6?]