We face a stark choice this year: a Labour-led government, which will create fairer tax and invest in jobs and innovation, or National-led government, which will govern for the kleptocracy, giving them tax cuts, then selling our assets and slashing our public services to pay for them. So why is the Goffice doing such a bad job making the case?
I can’t for the life of me work out what the hell Labour was thinking presenting a tax package without the costings. It’s not hard to do. In fact, NZIER did it within three days. They conclude that the $5,000 tax free bracket and GST off fruit and vegetables could be paid for by a 53% tax over $100,000. NZIER reckons that would leave 96% of taxpayers better off.
The top rate can be less and the threshold higher if investment property ring-fencing is also introduced. With $400 million from ring-fencing and the same from clamping down on tax avoidance and other loopholes, the new top rate be 45% at $120,000, and 97% of people would be better off.
Hell, Labour could simply say ‘we’ll introduce the Australian rates and thresholds’, which would give a tax cut to the 2.5 million on incomes below $42,000, and pay for taking GST off fruit and vegetables. (cheers to Marty for the tax numbers)
But by not having their shit together, they’ve let National and the media make them look stupid and irresponsible.
Why didn’t Phil Goff get up and say ‘I am here today to announce a tax increase, for myself. National has taken for the poor and given to the rich. People like me on high incomes do not need the tax cuts John Key has given us. I will increase the taxes on the rich and lessen the burden on 97% of Kiwi families, who have been preyed upon by this National government’? And why didn’t he have a simple table of costings, to prove it?
Where was the follow up and where was the messaging? If Goff is going to present a policy that makes him a bit of a modern-day Robin Hood why not have the gumption to frame it that way too?
Then there’s National partial asset sale policy. Everyone knew it was coming. On The Standard, we’ve published the Treasury papers, and even suggested more sneaky ways National might go about it than they actually have done.
Hell, we’ve all known National intends to sell assets since before Bill English split the beans at that cocktail party. So where’s Labour’s preparation? You would think they would have had a killer bunch of lines sorted. Nope.
Unlike Labour, National and Key have been building to this election for five years, as Matthew Hooton reveals (behind pay-wall):
As a strategy, it’s always been obvious. The breakthrough is Mr Key having the emotional intelligence, interpersonal skills and patience necessary to execute it, day-in, day-out since 2006. … the volleyball games at Ratana, the white-man dancing at the Big Gay Out and all the other excruciating photo ops that have made the vast majority love him, feel comfortable with him and, most importantly, trust him.
All so that he can build up the political capital needed to announce privatisation – under the pretext of a debt problem which he worsened and privatisation won’t solve – while still maintaining the popularity to get over the line at the election, which will be in July because the numbers won’t hold until November.
The media’s smart enough to see the holes in Key’s plan – even when praising it, like Fran O’Sullian this morning:
selling shareholdings in SOEs to fund assets such as hospitals and schools will inevitably run up against the argument that the Government is forgoing reliable dividend streams to fund assets that it cannot afford to build just now.
the reality is that unless the Government gets more revenue in from somewhere it remains vulnerable to accusations it is flicking assets to fund last year’s income tax cuts for top-earning Kiwis.
The Prime Minister repeatedly stressed this week that the 2010 National’s “tax-switch” package was revenue neutral.
But even on Budget night, Treasury forecasts predicted the switch would result in a $460 million shortfall in the 2011 year – which was certainly not enough to fund the big personal tax cuts at upper income levels that went into effect on October 1.
If Fran O’Sullivan can say ‘National has slashed taxes for the very richest New Zealanders with borrowed money. Now, it is selling our assets and cutting public services to pay for them’ why can’t Labour?
It has become more important than ever that we have a Labour-led government after the next election. The damage National will do in its second term will be irreversible. The election is only six months away but, in a two-news cycle a day world, that is still plenty of time to frame Key as having conned his way into our trust, and now wanting to sell the assets we have built up over generations and cut our public services to pay for tax cuts for the few. There is still time for Goff to position himself as a man willing to take back from the rich and make everyone else better off. What it takes is a concerted effort, not one-offs with little follow-through.
It’s a piece of luck for Labour that a Treasury paper from December confirms that ownership of assets if they are sold will go overseas. But it seems to me Labour is reliant too much on good fortune falling in its lap.The Goffice, if it really wants to become the Prime Minister’s office, needs to start making its own luck.