Yet more dodgy Nat numbers

Written By: - Date published: 6:56 pm, July 18th, 2011 - 61 comments
Categories: benefits, bill english, dpf, making shit up, national, tax - Tags:

If you’re a blogosphere regular, you’ll have noticed that recently every monkey with a copy of The Fountainhead and a crush on John Key has been spouting the line that the top 10% of taxpayers pay 71% of net tax. Sounds incredible, eh? That’s because it’s not credible. It’s more cheap numbers tricks from the Nats.

Over at Pundit, Rob Salmond has explained the trick. I’ll take the highlights of his post.

It all starts with Bill English’s table, let’s assume these basic numbers are right, although English hasn’t released his source data:

Net tax is the tax people pay minus benefits and tax credits like Working For Families that they get. This is where the 71% figure comes from. The top 9.7% paying $7.8 billion of net tax, which is 70.7% of the $11 billion total net tax. But wait:

Families earning over $150,000 paid net $7.8 billion. English and Farrar say that is 71% of the total. But when you use the same table and add up the amounts paid by families that earn above $80,000 but below $150,000, you find that those families also contribute a further net $7.6 billion, which is also around 70% of the total net tax.

What?! How the hell can two separate groups of families each pay 70% of the net tax?

The way English and Farrar put together this illusion is to assume that most of the “net tax paid” by middle-income families is not actually paid into “net tax.” Instead, it is put in a separate pool – “money for paying welfare transfers to net tax recipients.” Why use only middle class net taxes for this pool? Never mind why! Only when the “money for paying welfare transfers to net tax recipients” pool is full does “net tax paid” actually start paying towards “net tax.”

So, this is the trick: English and Farrar have offset the benefit transfers that the poorest families get against the net tax that middle income families pay. If you look it in graphical form, they’ve used the little black bars to fill in the red hole leaving the big black bar untouched:

Conveniently, that leaves nearly all the remaining tax being paid by the wealthy. But why do it that way, shouldn’t you just spread the cost of the transfers equally? Of course you should. Salmond points out one of the stupid results of English/Farrar’s magic numbers:

The list of silly conclusions that flow from their calculations is long. For example, under the English/Farrar counting rules, high-income families contribute absolutely nothing, not one cent, towards helping the needy with Working for Families payments, the DPB, or unemployment benefits. This is because their $7.8 billion goes into the “net tax” pool rather than the “paying for welfare transfers to net tax recipients” pool. That is, of course, an idiotic conclusion that is unfair to top-income earners, whose taxes do a great deal to support welfare programs.

It doesn’t make any sense to put all the benefit payments on to the middle incomes. If you and me pay $1000 each in tax and education is 10% of the budget, and we want to know what percentage of your tax went on defence spending, we wouldn’t pretend all my money had paid for other stuff, and say that you are paying for 100% of the education budget.

Salmond corrects English/Farrar’s numbers:

The correct way to calculate the percentage is to divide a group’s net contribution by the total of all net contributions. Correcting for this error in arithmetic, the net income tax contribution of $150,000+ households falls from 71% to 46%.

Salmond then points out that benefits aren’t funded entirely by income tax, there’s also other taxes like GST, which is regressive:

 

Using these more complete figures, the proportion of net tax paid by $150,000+ households drops further to 43%, a far cry from the 71% touted by English and Farrar.

But isn’t it still unfair that 10% of people by 43% of net tax?

To answer that, we need to remember that this is not some random slice of New Zealand families. This is the 10% with the highest incomes. That slice of New Zealand also has a lot in common with the richest 10% in terms of net wealth. What do we know about them?

  • The 10% of top income-earning families earn 30% of the income. (Estimate from Stats NZ’s Household Economic Survey 2010)
  • The wealthiest 10% of New Zealand families control roughly 50-60% of the wealth (Estimates from New Zealand Institute’s The Wealth of a Nation 2004)

This group earns 30% of the income, has 50% or more of the wealth, and pays 43% of the net tax. Is that an outrage?

I don’t think so. Even under a libertarian flat tax regime, this group would pay 30% of the tax. And our country is not a bunch of flat tax libertarians. We have always embraced progressive taxation, and been willing to lend a helping hand to those in need.

We have always known that when you help out people in need, other people pay more than their income share to fund it all.

The fortunate few paying 1.4 times their income share in tax is worthy of everyone’s gratitude. But it does not seem at all an unreasonable burden.

So, there we have it. More dodgy Nat numbers comprehensively demolished.

But I think we need to remember what is behind the dodgy numbers in the first place.

The Nats are desperately looking for an excuse as to why the highest 2% of earners shouldn’t have to go back to paying the 39% rate that they managed to pay for 9 years on income over the “stratospheric” threshold of $150,000 and why people making tax-free capital gains should still be subsidised by the rest of us. And the best they can come up with is ‘pity the poor rich guy’ and some drummed up numbers. Pitiful.

61 comments on “Yet more dodgy Nat numbers ”

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  1. Draco T Bastard 1
    18 July 2011 at 7:09 pm

    This group earns 30% of the income, has 50% or more of the wealth, and pays 43% of the net tax. Is that an outrage?

    And yet only pays 43% of the taxes. Yep, seriously under taxed.

    • Chris 1.1
      19 July 2011 at 8:47 am

      As Colonial Viper alluded to the 10% who earn the highest income are not the same group as the wealthiest 10%.

  2. Colonial Viper 2
    18 July 2011 at 7:26 pm

    Oh and by the way, a fuckload of NZ’s richest people (including many farmers) have an “annual taxable household income” of less than $50,000 p.a.

    They are hidden in the table above, they are in essence our wealthy upperclass bludgers with community services cards, who receive WFF and whose kids get student allowances no questions asked.

    These truly wealthy upperclass bludgers who have structured their affairs to be maximally ‘tax efficient’ should be the ones slammed by a significant CGT and asset tax.

    • Secret Squirrel 2.1
      18 July 2011 at 7:32 pm

      How many of them are there CV?

      • Colonial Viper 2.1.1
        18 July 2011 at 7:43 pm

        I’ll take a look and let you know.

        • Secret Squirrel 2.1.1.1
          18 July 2011 at 8:50 pm

          Do you think there are as many as all the benefit bludgers out there? They should be as easy for you to count.

          • Colonial Viper 2.1.1.1.1
            18 July 2011 at 10:11 pm

            Dude, what makes you think that the group consisting of wealthy upperclass bludgers and the group consisting of benefit bludgers are completely different people?

            You’re a frakking amoral ACT astroturfer.

          • bbfloyd 2.1.1.1.2
            18 July 2011 at 10:16 pm

            i’d bet my house that there’s more well off bludgers out there than than the ones you so enjoy insulting squirrel. i’ve known a quite a few in my time.

            you already know all the justifications used. chances are. you’ve used one or two yourself no doubt, so i won’t waste time explaining them.

          • Deadly_NZ 2.1.1.1.3
            18 July 2011 at 10:48 pm

            Listen SS Pete or what ever. It has just been pointed out to you in NO uncertain terms that the biggest benefit bludgers are the wankers that hide all their wealth and collect WWF and have a community card, all whilst getting record payments from Fonterra. And these thieving fucking bludgers are so proud of the fact, and even boast that they rip off the system for millions by hiding assets and cash. So, SS, Pete or what ever you are. I’ll just name you BLUDGER just like your fucking mates. .

          • Secret Squirrel 2.1.1.1.4
            19 July 2011 at 6:25 am

            The point being, over a few conclusion jumping heads here, is that no one will quantify how many tax avoiders or dole bludgers or or GST avoiders or “sickness” loafers there are, so they exaggerate the hell out it.

            Claiming fuckloads of anything is meaningless unless you can back it up with facts. But facts would get in the way of blanket abuse.

            • Lazy Susan 2.1.1.1.4.1
              19 July 2011 at 6:49 am

              The facts of Eddie’s post are that the English has used dodgy numbers and is lieing again. Are you concerned about that SS?

              • Secret Squirrel …
                19 July 2011 at 9:00 am

                You can choose Eddie’s post as gospel if you like, I’m not. Depends on what religion you belong to.

                The fact is that those numbers and calculations are being disputed all over the internet, and I suspect Eddie’s post is potentially as dodgy as everyone else’s. Confusing arguments over confusing numbers.

                I’m not jumping on anyone’s side, I’ll wait and see a bit more impartial analysis. Keith Ng seems to have a reasonable idea of it, and he’s clarified a few things for me.

                • Lazy Susan …
                  19 July 2011 at 9:25 am

                  I see a squirrel sitting on the fence again. Could you post a link to Keith Ng’s analysis?

                  • Secret Squirrel …
                    19 July 2011 at 9:34 am

                    You mean not jumping to partisan conclusions.

                    http://publicaddress.net/onpoint/easy-as-1-2-228-billion/

                    More analysis, argumenmts and followup by Keith here:
                    http://www.kiwiblog.co.nz/2011/07/joyce_v_cunliffes_numbers.html

                    • Lazy Susan …
                      19 July 2011 at 9:52 am

                      Keith Ng’s blog does not refer to English’s numbers – it’s about comparing Joyce’s and Cunliffe’s debt repayment figures. A relevant link would be more useful.

                      Did you even read Eddie’s post? They are English’s own figures he is using – not Eddie’s!

                    • lprent []
                      19 July 2011 at 11:46 am

                      Did you even read Eddie’s post? They are English’s own figures he is using – not Eddie’s!

                      Precisely…

                      And he assumed that English used accurate figures – which I think is a rather generous assumption – in particular confluting household incomes when all tax is collected as individuals is very very suspect.

                      Effectively he was saying that households with more than one person working pay more tax in total – well duh! That could be a household with 6 flatmates on low wages to my household with 2 people on good salaries to a single person earning quite a lot.

                      Pete of course tends to suck these bullshit figures up without engaging his brain, and relies on other “authorities” to refute them. The kind of person you really want to not go on jury duty….

                    • felix …
                      19 July 2011 at 10:19 am

                      Distract, derail, lie, squirm, ignore, deny, run away.

                      Just another morning in the life of Pete George, apologist.

                    • Secret Squirrel …
                      19 July 2011 at 10:33 am

                      Ok, sorry, wrong table of numbers, there’s a few being argued over that the moment. The English table points to the problem Rob and Eddie have with maths.

                      What?! How the hell can two separate groups of families each pay 70% of the net tax?

                      That’s quite easy and is the crux of this argument.

                      Take Nett Tax of $100m:
                      Group A pays $70m which is 70% of nett tax.
                      Group B pays $70m which is 70% of nett tax.
                      The total they pay is $140m which is gross tax, A and B pay 50% each.
                      Group C gets $40m in tax credits, leaving $100m nett tax.

                      If you accept that maths then what’s the problem?

                    • Lazy Susan …
                      19 July 2011 at 11:00 am

                      Group A and B both both pay 70% of net tax and you still can’t see a problem with English’s figures?

                    • felix …
                      19 July 2011 at 11:01 am

                      If you accept that maths then you’re a liar or a moron Pete. Or in your case possibly both.

                    • Secret Squirrel …
                      19 July 2011 at 11:04 am

                      LS – are you talking about something else about English’s figures?
                      Or are you referring to both paying 70% of nett tax?

                    • Colonial Viper …
                      19 July 2011 at 11:07 am

                      s.s. you don’t recognise when someone is playing you for a fool with a numbers shifting game?

                      OR are you being deliberately obtuse and helping them?

                    • Secret Squirrel …
                      19 July 2011 at 11:16 am

                      Who’s playing the numbers game? Who’s post?

                      You can keep arguing about numbers like this as much as you like, but it’s a sideshow trying to prove the otther side wrong and incompetent. It’s as pathetic as felix.

                      It doesn’t change the facts – a relatively few people pay the bulk of income tax, and quite a lot of people pay no nett tax, many of whom are nett recipients of tax.

                      That makes “paying a fair amount of tax” a nonsense claim. We should accept that some people need state/tax money, but shouldn’t fool ourselves that it’s everyone paying their fair share of tax.

                    • lprent []
                      19 July 2011 at 11:40 am

                      The point of the post was that Bill English and DPF were deliberately lying about their numbers to get a nice sounding meme “10% of taxpayers pay 71% of tax” – which is obvious bullshit.

                      There were a pile of dumb-arses (you maybe) who were stupid enough to believe that crap. Even a brief scan of this site sees this idiotic crap being swallowed whole at the sewer and regurgitated here. Eventually a number of people got around to pointing out to the idiots how stupid they are.

                      The biggest group not paying their “fair share” is in fact in the group with the highest incomes because they have the highest ability to hide form taxes. That is what the CGT and other tax changes will eventually get around to fixing. Eventually that will reduce the tax load on PAYE and GST over the decades.

                      And of course we’ll lose a few parasites offshore – I’ll wave them goodbye. It has been a pain over the past decades looking at them stuffing assets into family trusts and property speculation to avoid paying their fair share, whilst I’m trying to run a productive business. You’re going to be amazed how many people in the productive sectors of the economy are going to be happy to see them disappear…

                    • Pascal's bookie …
                      19 July 2011 at 11:18 am

                      100% of the country pays 100% of the Net tax, whoopdedoop.

                      The whole way of looking at it is mentalism, which would be the point of the post ss.

                    • Lazy Susan …
                      19 July 2011 at 11:22 am

                      Who’s playing the numbers game? Who’s post?

                      Wake up – the post was in response to English’s fucked up numbers. You accuse me of being partisan and then proceed to defend his stupid maths. In the context of a debate about fair taxation English’s analysis is a piece of shit and if you can’t see it I can’t help you.

      • McFlock 2.1.2
        18 July 2011 at 7:54 pm

        A fuckload. That’s a unit of measurement approximately 1 “a bit off” to the power of 5, also roughly equivalent to 1/16 of a “No. Fucking. Way.” 
         
        True, a qualitative measurement, but communicative nonetheless.

      • Draco T Bastard 2.1.3
        18 July 2011 at 9:54 pm

        Too many.

  3. Ianupnorth 3
    18 July 2011 at 7:48 pm

    To SS – Troll, troll go away, never comeback another day!

  4. djg 4
    18 July 2011 at 9:27 pm

    How will the CGT as proposed change this?
    Aren’t these same people the art owners/traders, the boat owners, but these are all excluded.

    Why has Labour made these exclusions?

    • Bright Red 4.1
      18 July 2011 at 9:51 pm

      It’s the practice in other countries, and with good reason.

      Boats, like cars, are depreciating assets. Covering them with cgt would mean every boat owner could claim a tax credit when selling.

      collectibles aren’t covered because of the complexity of covering them.

      • Colonial Viper 4.1.1
        18 July 2011 at 10:13 pm

        Boats, like cars, are depreciating assets. Covering them with cgt would mean every boat owner could claim a tax credit when selling.

        Sounds exactly like the kind of CGT National would bring in. Seriously.

      • Dan 4.1.2
        18 July 2011 at 10:17 pm

        “collectibles aren’t covered because of the complexity of covering them.”

        and because the champagne socialist, liberal art crowd largely vote Labour

        • Colonial Viper 4.1.2.1
          18 July 2011 at 11:03 pm

          Yeah, so? Who asked you to pitch your tent in with a bunch of over-hyped uncultured commerce and finance grads?

          • lprent 4.1.2.1.1
            19 July 2011 at 2:01 am

            Hey. Your host is a MBA grad, admitably with almost zero interest in the arts (apart from programming). But I did have the good taste to partner up with an arts grad who does. We argue functionality vs asthetics often (and I do that at work a lot as well).

            She isn’t particularly into politics and votes on a basis that I find ‘interesting’ but largely arises out of direct harsh experience of being in her 20’s in the 90’s. I am into politics – and it has nothing to do with liberal arts – but a hell of a lot to do with business theory as well as practice. Almost the reverse of the stereotypes you two are sprouting.

            Based on his comment (can’t remember noticing him before) Dan can best described as a ignorant troll who depends rather too much on stereotypes – probably because his brain can’t handle anything more complicated. Eventually he will attract my attention whilst moderating. But feeding the trolls with similar stereotypes is also stupid IMHO – perhaps you should desist….

            But BR is exactly correct about both types of asset. I can just taste the scams that would be possible with a CGT on collectibles.

  5. Lanthanide 5
    18 July 2011 at 10:48 pm

    This 71% number never really passed the sniff test, I don’t think.

    Good to see a nice demonstration on why it’s so off.

    The graph showing taxes paid in both income and GST, is missing some other regressive taxes: tobacco, alcohol and fuel excise. I’m sure there are some others, too.

    • jackal 5.1
      19 July 2011 at 10:09 am

      Certainly makes David Farrar and Bill English look dodgy. It will be interesting to see if they can trick enough people into believing false information, or if it will backfire.

      • Lanthanide 5.1.1
        19 July 2011 at 11:45 am

        It’ll definitely work. That’s the problem with these stats, they can simply put them out there and the useful idiots will lap them up.

        Even when presented with the real numbers and why the original ones were wrong, very few will be distrustful of those that lied to them in the first place; some will continue to believe the fake numbers and the rest will just shake it off like water on a ducks back and forget about it.

  6. Policy Parrot 6
    19 July 2011 at 12:54 am

    Is it fair to say that “fisk” is now considered a proper word? Have to ask Oxford Dictionary.

    fisk (adj). “A point-by-point refutation of a blog entry or (especially) news story. A really stylish fisking is witty, logical, sarcastic and ruthlessly factual..

    UPDATE: HT Wikipedia.

  7. tc 7
    19 July 2011 at 7:14 am

    I think it’s a badge of honor that the standard should wear with pride to have so many NACT trolls doing their idols bidding in varied attemps to derail the fact driven arguments.

    Love the way sideshow explains the bad inflation numbers as not really bad as he reckons GST rise doesn’t count……pity about those who didn’t get a fax tax break curtesy of more overseas loans. Ah banker logic….a brighter foreign owned future.

  8. Peter 8
    19 July 2011 at 7:55 am

    I’m looking forward to Mr Farrar’s response to this post.

      • crashcart 8.1.1
        19 July 2011 at 9:28 am

        The fact you are linking to a post where someone claims that NAT don’t plan asset sales but asset renewals because aparently power companies are “Old worn out assets”. Holy jesus I have never seen anything dumber. With the increasing energy needs he thinks that an energy company is old and worn out.

        Kiwi blog is candy for your brain…it will rot it.

      • felix 8.1.2
        19 July 2011 at 10:25 am

        Pete George posts links to discussions on a completely irrelevant topic. Twice.

        He really, really, really, doesn’t want anyone to discuss the topic of the post.

        • Secret Squirrel 8.1.2.1
          19 July 2011 at 10:43 am

          What have you discussed about the topic felix? As usual nothing but niggle.

          • felix 8.1.2.1.1
            19 July 2011 at 11:00 am

            I accept the premise of the post. The numbers prove the assertions.

            English and Farrar are full of shit.

            I surmise that you also accept the premise of the post and that’s why you’re so desperate not to mention it.

            Would you consider I’d made more of a contribution if I were to post some pictures of my cats? Or some other random link perhaps?

          • Pascal's bookie 8.1.2.1.2
            19 July 2011 at 11:09 am

            SS, even though your links are completely off topic, I had a look. This tells you pretty much all you need to know about farahrah’s analysis:

            Anti-avoidance. Labour have just invented a figure of $300m a year from greater anti-avoidance work. Now this is pie in the sky. If Labour announced actual law changes to reduce avoidance, then maybe you can estimate revenue changes. But this is the equivalent of “I hope it happens”. Keith Ng is right that it is probably not realistic to say Labour will not be able to get any extra revenue at all, but when you consider most experts are saying their tax package will make the tax system more complicated, I think avoidance will increase not decrease. In the absence of any specifics around anti-avoidance measures, I think you go with zero.

            To show that labour will raise zero from clamping down on tax avoidence, Farahrah says that there will be much more avoidance and we should assume labour won’t do anything about it. Even though they said they will be aggressively going after it. That’s the sort of number crunching you think evryone should treat with respect and scratych their beards about and fail to draw any conclusions from.

            He explicitly says that it is not realistic to assume labour will get zero, then, in the very next sentence, says ‘go with zero’.

            Off you fuck.

  9. Peter 9
    19 July 2011 at 8:43 am

    Time for a dumb question, no doubt at my expense.

    How is it that the households earning 160000 plus go from paying 37% of the gross tax to 70.7% of the net tax?

    • Dan 9.1
      19 July 2011 at 10:51 am

      It depends on where you offset the negative net taxpayers, basically.

      The only way to effectively evaluate this data is to then break down these income brackets by the contributions they make in each tax bracket, until you’re left with zeroed net total taxation, and each dollar taxed after that point results in a marginal tax gain. These tables are effectively useless.

      • Peter 9.1.1
        19 July 2011 at 11:53 am

        Thanks, so is it possible to get the data you would need? I believe it’s important for people to understand how this all works.

      • lprent 9.1.2
        19 July 2011 at 11:58 am

        Yep, I’d agree.Talk to Bill English – those are his tables.

        The thing I really dislike is looking at household incomes when that could be everything from villa full of burger flippers to a household with one income earner. Aggregating tax paid as individuals to a household level without further breakdown is moronic.

        But I have come to expect that from Bill English when he feeds junk numbers out through DPF.

    • Bright Red 9.2
      19 July 2011 at 11:05 am

      they don’t.

      what English/Farrar have done is pretend that all the benefit and tax credits are paid for out of income tax, and then got a net (income tax minus benefits/tax credtis) number, which is $10,970m. Then they’ve said, what is the income tax minus benefits/tax credits just for the richest 9.7%, and the answer is $7,758m. Then they’ve said what’s $7,758m as a percentage of $10,970m – it’s 70.7%, and concluded that the richest 10% pay 71% of net tax.

      They don’t though because you’ll notice that incomes between $50,000 and $150,000 pay a total of 83.8% of net tax. Obviously that can’t be right. You can’t have more than 100% of net tax.

      The explanation is that households with incomes alone below $50,000 pay negative net tax, equal to 54.5% of the total net tax for all incomes.

      English/Farrar have offset that 54.5% against the net tax contribution of the middle incomes reducing their net tax contribution to 29.3% and leaving the richest 10% apparently paying 70.3% of net tax but not paying a cent towards the social welfare system.

      It’s just trickery, deceptive numbers games from a party that has nothing better to offer.

      • Peter 9.2.1
        19 July 2011 at 11:50 am

        Appreciate the time you have taken, I now understand.

      • Colonial Viper 9.2.2
        19 July 2011 at 12:25 pm

        Now I hope that every economist, bank executive and financial commentator in this country, reads your post.

        Because it will put another hole in the credibility of this National led Govt.

  10. mik e 10
    19 July 2011 at 10:22 am

    They are looking for a lot of new talent at fox right now Farrar ,Hootton and Joyce would be prime candidates as Mc Cully is getting past it .The news media manipulation in this country needs to be examined closely as well .When you see TV3 radio works getting a $48million rescue and their radio stations giving John Key a free platform and most of the interviews are just party political propaganda patsy question asking by sympathetic broadcasters I wouldn,t call them Journalists. The last election ordinary DJs were particularly brutal on Labour and Clark in other words a dirty campaign this must not happen or be aloud to happen we need to expose these Nixon Murdoch under hand style tactics

  11. randal 11
    19 July 2011 at 11:05 am

    ayn rand is a flaming nuisance. another person who has no idea how the goods of the world are made nor who does it. just another greedy wanting to accumulate money so they can go out and get noticed by the amount of things they possess. similar to most tories.

  12. wawot 12
    19 July 2011 at 12:08 pm

    Well done – I pointed this out days ago in the DPF blog and wondered how long it would take yous to figure it out.

    They simply called 97 out of 154.5 etc. a percentage etc. whereas a percentage is by definition out of 100. 97 as a percentage of 154.5 is 63%.

  13. Ed 13
    19 July 2011 at 2:04 pm

    It should be reasonably easy to give a table (and bar charts) that exclude none, one or both of benefit payments and WFF tax rebates – there are different arguments for the inclusion or exclusion of each. GST may be difficult to apportion between income groups, but it should be possible to use some reasonable assumptions regarding the proportion of income used for GST liable purchases.

    Benefits are of course paid wholly from corporate taxes (it is at least as logical as apportioning it to income bands), but WFF is clearly a tax rebate. The net tax should obviously include company taxes, but perhaps there is an argument that most other taxes are fairly attributable to other government expenditure – eg taxes on alcohol and cigarettes are ‘allocated’ to health spending, etc. There seems little reason not to include corporate taxes as a separate bar though – they are taxpaying entities whose tax supports our social welfare payments. Where do taxes paid by trusts appear?

    Any tables released by government should have attached to them the sources of any data, and any significant assumptions made. It would be good if The Standard set an example by doing that as well – while that has been done in this cae it would also be good if someone has written an OIA request for the source.

    • Peter 13.1
      21 July 2011 at 11:59 pm

      Here is a late night attempt to provide a different ballpark perspective. Apologies for the rough presentation and the mix of budgeted and actual data. Information comes from:

      http://www.treasury.govt.nz/budget/2011/taxpayers/01.htm#_crownrev
      http://statistical-report-2010.msd.govt.nz/overall+trends/expenditure+on+financial+assistance/historic+expenditure%2C+1940%962010#tableot5
      http://www.treasury.govt.nz/budget/2011/taxpayers/02.htm#_whopaystax

      Ministry of Social Development payments – 2010 ($ millions)

      Unemployment Benefits 1,063,884
      Independent Youth Benefit 20,095
      Sickness Benefits 837,330
      Invalid’s Benefit 1,396,520
      Domestic Purposes Benefits 1,961,841
      Widow’s Benefit 76,899
      Unsupport-ed Child’s Benefit and Orphan’s Benefits 101,434
      NZ Super-annuation 8,544,678
      Veteran’s Pension 161,957
      Total MSD payments 14,164,638 ($Billion 14.16)

      To get a perspective of income flowing into government here are the indicative Treasury Budget 2012 Income figures in is $Billions.

      Income Tax 24.3
      GST 15
      Company Tax 8.1
      Other Direct tax 1.9
      Other Indirect Tax 5.4
      Interest, Dividends 2.1
      Other Income 4.2
      Total 61 ($Billion)

      Assuming all Budgeted Income is available for all MSD payments (including Superannuation which is excluded by Mr Farrar) we might expect 40% of income tax to contribute towards MSD payments on the basis that total income tax collected is 40% ( 24.3/61) of all Budgeted Income. 40% of the 24.3 billion of income tax is 5.66 billion.

      Treasury point out that 17% of all expected income tax collected is from individuals ( not households ) earning more than $150,000. So the tax collected from the highest earning individuals to contribute would be 0.17 * 5.66 billion which is 0.96 billion.

      So, 0.96 billion coming from the taxpayers earning over $150,000 represents 4% of the total tax collected, that is 4 cents in every dollar. In comparison those earning $90,000 and above would pay 8 cents in the dollar towards MSD payments. Those earning $60,000 – $70000 contribute 2 cents in the dollar.

      While these figures are a mixture of actual and budget they don’t suggest that higher earning taxpayers are contributing alarmingly large amounts to MSD. Using data for individual taxpayers and not households, as well as not assuming that all tax goes to pay for MSD, we get a very different picture.

  14. Richard 14
    19 July 2011 at 4:31 pm

    Id question Bill English’s sources, even if he said a cloudless night sky is black… it was laughable when Bill English was interviewed by 3 news and tried to claim that not having to pay CGT was morally fair, when he himself benefit’s from no CGT

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  • Ceasefire agreement needed now: Peters
    New Zealand is urging both Israel and Hamas to agree to an immediate ceasefire to avoid the further humanitarian catastrophe that military action in Rafah would unleash, Foreign Minister Winston Peters says.   “The immense suffering in Gaza cannot be allowed to worsen further. Both sides have a responsibility to ...
    BeehiveBy beehive.govt.nz
    7 mins ago

  • Daily school attendance data now available
    A new online data dashboard released today as part of the Government’s school attendance action plan makes more timely daily attendance data available to the public and parents, says Associate Education Minister David Seymour.  The interactive dashboard will be updated once a week to show a national average of how ...
    BeehiveBy beehive.govt.nz
    29 mins ago

  • Ambassador to United States appointed
    Foreign Minister Winston Peters has announced Rosemary Banks will be New Zealand’s next Ambassador to the United States of America.    “Our relationship with the United States is crucial for New Zealand in strategic, security and economic terms,” Mr Peters says.    “New Zealand and the United States have a ...
    BeehiveBy beehive.govt.nz
    4 hours ago

  • New permit proposed for recreational gold mining
    The Government is considering creating a new tier of minerals permitting that will make it easier for hobby miners to prospect for gold. “New Zealand was built on gold, it’s in our DNA. Our gold deposits, particularly in regions such as Otago and the West Coast have always attracted fortune-hunters. ...
    BeehiveBy beehive.govt.nz
    5 hours ago

  • NZ and the UAE launch FTA negotiations
    Minister for Trade Todd McClay today announced that New Zealand and the United Arab Emirates (UAE) will commence negotiations on a free trade agreement (FTA). Minister McClay met with his counterpart UAE Trade Minister Dr Thani bin Ahmed Al Zeyoudi in Dubai, where they announced the launch of negotiations on a ...
    BeehiveBy beehive.govt.nz
    9 hours ago

  • New Zealand Sign Language Week an opportunity for anyone to sign
    New Zealand Sign Language Week is an excellent opportunity for all Kiwis to give the language a go, Disabilities Issues Minister Louise Upston says. This week (May 6 to 12) is New Zealand Sign Language (NZSL) Week. The theme is “an Aotearoa where anyone can sign anywhere” and aims to ...
    BeehiveBy beehive.govt.nz
    20 hours ago

  • Next stop NASA for New Zealand students
    Six tertiary students have been selected to work on NASA projects in the US through a New Zealand Space Scholarship, Space Minister Judith Collins announced today. “This is a fantastic opportunity for these talented students. They will undertake internships at NASA’s Ames Research Center or its Jet Propulsion Laboratory (JPL), where ...
    BeehiveBy beehive.govt.nz
    20 hours ago

  • $1.9 billion investment to keep NZ safe from crime
    New Zealanders will be safer because of a $1.9 billion investment in more frontline Corrections officers, more support for offenders to turn away from crime, and more prison capacity, Corrections Minister Mark Mitchell says. “Our Government said we would crack down on crime. We promised to restore law and order, ...
    BeehiveBy beehive.govt.nz
    20 hours ago

  • OECD reinforces need to control spending
    The OECD’s latest report on New Zealand reinforces the importance of bringing Government spending under control, Finance Minister Nicola Willis says. The OECD conducts country surveys every two years to review its members’ economic policies. The 2024 New Zealand survey was presented in Wellington today by OECD Chief Economist Clare Lombardelli.   ...
    BeehiveBy beehive.govt.nz
    23 hours ago

  • Agreement delivers Local Water Done Well for Auckland
    The Government has delivered on its election promise to provide a financially sustainable model for Auckland under its Local Water Done Well plan. The plan, which has been unanimously endorsed by Auckland Council’s Governing Body, will see Aucklanders avoid the previously projected 25.8 per cent water rates increases while retaining ...
    BeehiveBy beehive.govt.nz
    2 days ago

  • Gaza and the Pacific on the agenda with Germany
    Foreign Minister Winston Peters discussed the need for an immediate ceasefire in Gaza, and enhanced cooperation in the Pacific with German Foreign Minister Annalena Baerbock during her first official visit to New Zealand today.    "New Zealand and Germany enjoy shared interests and values, including the rule of law, democracy, respect for the international system ...
    BeehiveBy beehive.govt.nz
    3 days ago

  • Decision allows for housing growth in Western Bay of Plenty
    The Minister Responsible for RMA Reform, Chris Bishop today released his decision on four recommendations referred to him by the Western Bay of Plenty District Council, opening the door to housing growth in the area. The Council’s Plan Change 92 allows more homes to be built in existing and new ...
    BeehiveBy beehive.govt.nz
    4 days ago

  • Speech to New Zealand China Council
    Thank you, John McKinnon and the New Zealand China Council for the invitation to speak to you today.    Thank you too, all members of the China Council. Your effort has played an essential role in helping to build, shape, and grow a balanced and resilient relationship between our two ...
    BeehiveBy beehive.govt.nz
    4 days ago

  • Modern insurance law will protect Kiwi households
    The Government is modernising insurance law to better protect Kiwis and provide security in the event of a disaster, Commerce and Consumer Affairs Minister Andrew Bayly announced today. “These reforms are long overdue. New Zealand’s insurance law is complicated and dated, some of which is more than 100 years old. ...
    BeehiveBy beehive.govt.nz
    5 days ago

  • Government recommits to equal pay
    The coalition Government is refreshing its approach to supporting pay equity claims as time-limited funding for the Pay Equity Taskforce comes to an end, Public Service Minister Nicola Willis says.  “Three years ago, the then-government introduced changes to the Equal Pay Act to support pay equity bargaining. The changes were ...
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    5 days ago

  • Transforming how our children learn to read
    Structured literacy will change the way New Zealand children learn to read - improving achievement and setting students up for success, Education Minister Erica Stanford says.  “Being able to read and write is a fundamental life skill that too many young people are missing out on. Recent data shows that ...
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    5 days ago

  • NZ not backing down in Canada dairy dispute
    Trade Minister Todd McClay says Canada’s refusal to comply in full with a CPTPP trade dispute ruling in our favour over dairy trade is cynical and New Zealand has no intention of backing down. Mr McClay said he has asked for urgent legal advice in respect of our ‘next move’ ...
    BeehiveBy beehive.govt.nz
    5 days ago

  • Stronger oversight for our most vulnerable children
    The rights of our children and young people will be enhanced by changes the coalition Government will make to strengthen oversight of the Oranga Tamariki system, including restoring a single Children’s Commissioner. “The Government is committed to delivering better public services that care for our most at-risk young people and ...
    BeehiveBy beehive.govt.nz
    5 days ago

  • Streamlining Building Consent Changes
    The Government is making it easier for minor changes to be made to a building consent so building a home is easier and more affordable, Building and Construction Minister Chris Penk says.      “The coalition Government is focused on making it easier and cheaper to build homes so we can ...
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    5 days ago

  • Minister acknowledges passing of Sir Robert Martin (KNZM)
    New Zealand lost a true legend when internationally renowned disability advocate Sir Robert Martin (KNZM) passed away at his home in Whanganui last night, Disabilities Issues Minister Louise Upston says. “Our Government’s thoughts are with his wife Lynda, family and community, those he has worked with, the disability community in ...
    BeehiveBy beehive.govt.nz
    6 days ago

  • Speech to New Zealand Institute of International Affairs, Parliament – Annual Lecture: Challenges ...
    Good evening –   Before discussing the challenges and opportunities facing New Zealand’s foreign policy, we’d like to first acknowledge the New Zealand Institute of International Affairs. You have contributed to debates about New Zealand foreign policy over a long period of time, and we thank you for hosting us.  ...
    BeehiveBy beehive.govt.nz
    6 days ago

  • Accelerating airport security lines
    From today, passengers travelling internationally from Auckland Airport will be able to keep laptops and liquids in their carry-on bags for security screening thanks to new technology, Transport Minister Simeon Brown says. “Creating a more efficient and seamless travel experience is important for holidaymakers and businesses, enabling faster movement through ...
    BeehiveBy beehive.govt.nz
    6 days ago

  • Community hui to talk about kina barrens
    People with an interest in the health of Northland’s marine ecosystems are invited to a public meeting to discuss how to deal with kina barrens, Oceans and Fisheries Minister Shane Jones says. Mr Jones will lead the discussion, which will take place on Friday, 10 May, at Awanui Hotel in ...
    BeehiveBy beehive.govt.nz
    6 days ago

  • Kiwi exporters win as NZ-EU FTA enters into force
    Kiwi exporters are $100 million better off today with the NZ EU FTA entering into force says Trade Minister Todd McClay. “This is all part of our plan to grow the economy. New Zealand's prosperity depends on international trade, making up 60 per cent of the country’s total economic activity. ...
    BeehiveBy beehive.govt.nz
    6 days ago

  • Mining resurgence a welcome sign
    There are heartening signs that the extractive sector is once again becoming an attractive prospect for investors and a source of economic prosperity for New Zealand, Resources Minister Shane Jones says. “The beginnings of a resurgence in extractive industries are apparent in media reports of the sector in the past ...
    BeehiveBy beehive.govt.nz
    6 days ago

  • Ō-Rākau Remembrance Bill passes first reading
    The return of the historic Ō-Rākau battle site to the descendants of those who fought there moved one step closer today with the first reading of Te Pire mō Ō-Rākau, Te Pae o Maumahara / The Ō-Rākau Remembrance Bill. The Bill will entrust the 9.7-hectare battle site, five kilometres west ...
    BeehiveBy beehive.govt.nz
    7 days ago

  • Government to boost public EV charging network
    Energy Minister Simeon Brown has announced 25 new high-speed EV charging hubs along key routes between major urban centres and outlined the Government’s plan to supercharge New Zealand’s EV infrastructure.  The hubs will each have several chargers and be capable of charging at least four – and up to 10 ...
    BeehiveBy beehive.govt.nz
    7 days ago

  • Residential Property Managers Bill to not progress
    The coalition Government will not proceed with the previous Government’s plans to regulate residential property managers, Housing Minister Chris Bishop says. “I have written to the Chairperson of the Social Services and Community Committee to inform him that the Government does not intend to support the Residential Property Managers Bill ...
    BeehiveBy beehive.govt.nz
    7 days ago

  • Independent review into disability support services
    The Government has announced an independent review into the disability support system funded by the Ministry of Disabled People – Whaikaha. Disability Issues Minister Louise Upston says the review will look at what can be done to strengthen the long-term sustainability of Disability Support Services to provide disabled people and ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • Justice Minister updates UN on law & order plan
    Justice Minister Paul Goldsmith has attended the Universal Periodic Review in Geneva and outlined the Government’s plan to restore law and order. “Speaking to the United Nations Human Rights Council provided us with an opportunity to present New Zealand’s human rights progress, priorities, and challenges, while responding to issues and ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • Ending emergency housing motels in Rotorua
    The Government and Rotorua Lakes Council are committed to working closely together to end the use of contracted emergency housing motels in Rotorua. Associate Minister of Housing (Social Housing) Tama Potaka says the Government remains committed to ending the long-term use of contracted emergency housing motels in Rotorua by the ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • Trade Minister travels to Riyadh, OECD, and Dubai
    Trade Minister Todd McClay heads overseas today for high-level trade talks in the Gulf region, and a key OECD meeting in Paris. Mr McClay will travel to Riyadh to meet with counterparts from Saudi Arabia and the Gulf Cooperation Council (GCC). “New Zealand’s goods and services exports to the Gulf region ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • Education priorities focused on lifting achievement
    Education Minister Erica Stanford has outlined six education priorities to deliver a world-leading education system that sets Kiwi kids up for future success. “I’m putting ambition, achievement and outcomes at the heart of our education system. I want every child to be inspired and engaged in their learning so they ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • NZTA App first step towards digital driver licence
    The new NZ Transport Agency (NZTA) App is a secure ‘one stop shop’ to provide the services drivers need, Transport Minister Simeon Brown and Digitising Government Minister Judith Collins say.  “The NZTA App will enable an easier way for Kiwis to pay for Vehicle Registration and Road User Charges (RUC). ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • Supporting whānau out of emergency housing
    Whānau with tamariki growing up in emergency housing motels will be prioritised for social housing starting this week, says Associate Housing Minister Tama Potaka. “Giving these whānau a better opportunity to build healthy stable lives for themselves and future generations is an essential part of the Government’s goal of reducing ...
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    1 week ago

  • Tribute to Dave O'Sullivan
    Racing Minister Winston Peters has paid tribute to an icon of the industry with the recent passing of Dave O’Sullivan (OBE). “Our sympathies are with the O’Sullivan family with the sad news of Dave O’Sullivan’s recent passing,” Mr Peters says. “His contribution to racing, initially as a jockey and then ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • Speech – Eid al-Fitr
    Assalaamu alaikum, greetings to you all. Eid Mubarak, everyone! I want to extend my warmest wishes to you and everyone celebrating this joyous occasion. It is a pleasure to be here. I have enjoyed Eid celebrations at Parliament before, but this is my first time joining you as the Minister ...
    BeehiveBy beehive.govt.nz
    1 week ago

  • Government saves access to medicines
    Associate Health Minister David Seymour has announced Pharmac’s largest ever budget of $6.294 billion over four years, fixing a $1.774 billion fiscal cliff.    “Access to medicines is a crucial part of many Kiwis’ lives. We’ve committed to a budget allocation of $1.774 billion over four years so Kiwis are ...
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    1 week ago

  • Pharmac Chair appointed
    Hon Paula Bennett has been appointed as member and chair of the Pharmac board, Associate Health Minister David Seymour announced today. "Pharmac is a critical part of New Zealand's health system and plays a significant role in ensuring that Kiwis have the best possible access to medicines,” says Mr Seymour. ...
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    1 week ago

  • Taking action on Fetal Alcohol Spectrum Disorder
    Hundreds of New Zealand families affected by Fetal Alcohol Spectrum Disorder (FASD) will benefit from a new Government focus on prevention and treatment, says Health Minister Dr Shane Reti. “We know FASD is a leading cause of preventable intellectual and neurodevelopmental disability in New Zealand,” Dr Reti says.  “Every day, ...
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    1 week ago

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