What lurks behind the tax cuts Mr Key?……
New Zealanders need to look behind the glossy headlines for the real agenda following the announcement of the National Party’s tax and fiscal policies today. National’s attempts to focus all attention on its ‘mine’s bigger than yours’ tax package is an exercise in sophistry.
Nothing in the plan announced today should give anyone confidence National can deliver the positive policies and clear strategy to see our country through the rough road ahead. Instead, they are proposing a reduction in workers’ pay conditions, a cut to the state sector, and a reduction in the amount of investment in New Zealand’s businesses. Such policies have led to lower wages, lower investment, and lower growth in the past and will do so again.
Today’s announcement, like some unwanted Christmas present, is just 1990s policy re-wrapped in the shiny, smiley parcel that is John Key. National’s front bench is a relic of the 1990s. The same old faces who nearly destroyed our economy then with their neo-liberal voodoo economic ideology are still sitting on National’s front bench and they have an unfinished agenda.
Be warned, National’s decision to hold fire on some aspects of its tax package due to current economic conditions will be just the tip of the iceberg. They will use the current crisis in world markets as an excuse to impose drastic changes on our economy like selling strategic assets and cutting New Zealand Superannuation.
October 8th, 2008 at 2:55 pm
Yes, the prospect of a lengthy recession with reduced taxation revenue and increased economic needs, commitments & promises have resulted in ending even “prudent Cullen’s” deficit reducing budgets.
So, we need some easily understood and credible economic growth productive policy, and what about a substantial proportion of the NZ Super Fund mandated for CHEAP infrastructure finance, the least inflationary domestic development capital possible? GreyPower voted in support of that already a few years ago, with no one taking any notice of it. Would it be economically sound or not?
October 8th, 2008 at 9:25 pm
So Key is cutting R&D tax credits and the approved increase in Foreign Affairs spending to give us a 10 or 20 buck tax break…why am I not surprised. In a climate of extreme economic uncertainty R&D incentives are even more important to our future market developments.
Furthermore, reating new markets for our export industries - the very life blood of our country is the very place we need to invest in at time like this. And, to this end, investment in our foreign offices is imperative if we are to be competitive.
On cutting government spending why doesn’t he start with his own personal office. How many does he have working their Winston…I think you mentioned 36 not including his secretary?
October 8th, 2008 at 9:59 pm
Kiwisaver is a huge concern to me. I must admit I am hugely distrustful of a governments ability to protect retirement savings. I wish this were not the case… but as soon as you get a great big load of cash in some place, it only takes one or two bad apples making decisions and a whole nations savings just disappear like so much smoke. I would have liked to join the kiwisaver scheme - and applaud the idea of savings. The problem is it does not really matter if I trust the current regeime to look after my money and keep their obligations during their term BUT what about ten years down the track? the bigger the pot the more likely it will be stripped by the extreme right somehow - somehow ending up justified by high returns into a dozen schemes owned by a dozen companies that will be stripped by thier major shareholders and stake holders and left empty bankrupt holding billions in savings debt … which will have to be baled out by the government at the time.
This is the problem Winston with these sorts of things … regardless of your sincerity and ideologies … eventually someone will get in power and rape all your good work.
How do you fix this and give me confidence that when i am 65 I am going to get my money back with a reasonable return?
When kiwisaver came out I got on the gov websites and worked out the maths - being 40 years old and a reasonably on a good pay with an older teenage family I was genuinely interested in such investment.
I did the numbers using the governments own website information, and even wrote off with my findings to them to try to get confirmation of my figures. I then took the last 30 years house price average growth, and considered the alternative that i instead took 4% of my money, and instead of saving it … paid that extra 4% on a 90% mortgage for the average national priced house on a 25year mortgage. Well I shaved years off my mortgage, and by the end of the process the difference in the value of my asset compared to the alternative of retirement savings was so ridiculous I simply could not justify particiapting. I mean hundreds of thousands of dollars difference - and because I finished paying my mortgage several years earlier - I had the opportunity for about 5 years to make seriously big savings.
So Winston - I have this FUNDAMENTAL challenge to your policies about savings that I would appreciate you to take the time out to consider. this is a serious challenge because it speaks to the heart of New Zealand First’s core policy of protecting our traditional values and way of life. Kiwis DONT SAVE MONEY, they invest in a house, and through insurance sit on a safe nest egg which they can pass onto their children …breaking the poverty cycle. Hells bells - this is whats being kille by the urbanisation of our citizens … billions of dollars crowding citizens and immigrant kiwis into a top heavy city far away from the generation of power, and generation of agriculture and industry whilst other cities struggle with pathetically imbalanced economies of scale … inhibiting infrastructure development and causing imbalances in cost of living through overbearing rates and scarcity of labour.
Why adopt a non-traditional, non kiwi method of savings… I mean really …why do this? When I hear arguments about ‘freeing up growth capital’ all i can think about is risk and rip off. All I can think about is being 60 and finding that some pension fund manager has invested to much money in the wrong stocks - and I will die renting.
I think there are no compromises on a few attributes to being a kiwi - points I think many would rise up to obtain and / or protect if they realised their kiwi rights were eroding (like a frog in a pot being slowely bought to boil).
-Free Education for all
-Free Health for all
-Affordable House Ownership for all
-A safety Net for when hard working kiwis have a short term crisis to protect the children.
- Affordable high quality food and clothing
- A sense of respect in the state authorities that makes one feel they are on your side, and that you are safe in your street.
When does a government lose its right to govern? I think it is standing on a very thin red line right now - and I am not talking parties.
Dont you feel the pressure building?
there is antipathy in our childrens’ eyes.
Winston says: Some of the issues you raise are at the heart of our campaign this election. Vote NZ First to protect and save your New Zealand. If you read our policy document you’ll see some of your concerns addressed under our Superannuation policy in particular.
October 9th, 2008 at 11:35 am
It seems to me that every new policy or ‘great idea’ National initiates has a shadow behind it which they just mistakenly seem to leave out of their glossy blue pamphlets.
I predicted a long time ago that if National got into power there would be huge privatisation and a Rob-Muldoon-esque scandal 80s style involving the economy all over again. Except this time without a drunken announcement of a snap election.
You’ve definitely got my vote at the next election:)
October 9th, 2008 at 12:53 pm
I said after the last election that tax cuts would be a big issue again this time round for those of us that missed out and got nothing while tax cuts disguised as working for families gave considerable chunks of tax back to the selected ones labour preferred to assist when in fact we should all have been given a tax cut.
Since when did those above $60000 per annum require welfare support.
With the record surpluses over the last few years labour decided to spend on where it saw fit and not return it to the taxpayer as should have been the case. Quite frankly i don’t care that Labour have spent the money and left the cupboard bare i still want my tax cut and expect National to deliver it.
Winston says: It is important that any tax cuts are part of an overall plan to invest more in New Zealand’s future. National’s plan does the opposite. National will pay for tax cuts by slashing R&D investment and slashing Kiwisaver. Many workers could end up worse off. And what’s to say National will stop the slash and burn approach there?
October 9th, 2008 at 8:02 pm
Chris - you don’t have too much faith in democracy, when so suspicious about KiwiSaving. You should be really quite enthusiastic about it, as it is designed to help you into 1st home ownership - and it is good for the country, because togeher with the NZ Super fund, it will keep us wealth creating even after the home has been paid off - and elevate all of us personally and collectively to a higher level of prosperity and rate of economic growth to catch up where we lost ground over the past 40 years.
And remember, it was our majority which voted for Muldoon’s unsustainable super promises, and before that the proportion of welfarism on credit rather than paid up taxation, which “evaporated” the original Savage Fund into public debt. (It would not have “evaporated”, if it had owned the state houses and the public works bonds it helped to finance initially). Cheer up, we are on the threshold of a new “Ownership Democracy ” era.
October 10th, 2008 at 10:38 pm
Hi Jens,
thankyou for your reasonable and uplifting reply. The Ownership Society theories I think you refer to (John Keys tends to talk about ‘ownership democracy’ surprisingly) - please forgive me if i am wrong are straight out of the bowels of conservative think tanks, and rabidly sloganised by George Bush and similar politicians. I must admit the general underlying principles of ‘empowerment’ and “participation” are excellent ideals to strive for. I guess we can all reset our debt clocks and just declare everyone ‘owners’ and pray that ‘we dont get fooled again’. Perhaps thats the great plan … wars tend to cancel debts…
Thats rather sarcastic I know … but who owns this “ownership democracy” we here buzzing about these days? Lord Ashcroft? Maybe whoever wants to get a hold of freeview and needs TVNZ put on the block to secure all subscriber potential entertainment and sporting events…
Unfortunately for us - the single biggest factor that will facilitate people getting their own first homes in this country will not be kiwisaver. It will be this financial collapse. The single biggest influence for blue collar workers will be a write-off of 25-30% of house values and a credit market desperate for a new subprime round that they will eagerly wiggle on hooks in front of us. If they get hooked and work hard and things stay steady for say 10 years …then maybe a new lot of kiwis might climb out of the hole and have something to call their own.
Well the top 6 feet of it anyway … as long as they pay their feudal rent to their wig wearing local coucellor barons.
My dad was one of about a dozen poor catholic children in a poor catholic household in Nelson. He scraped and desperately strove to get enough together for a house for years … and boy could he budget! He would never of made it had it not been possible to cash in your entire family benefit at that time and use it as a deposit for a house.
Thats important. He could get a cash injection which paid for the deposit - or a long way towards it at least. With a litle help from the family this is how people get from renting from private owners to renting from the bank.
I am pretty certain after slogging for years on next to nothing, working overtime rates at 60% till all hours of the morning - he had no problems understanding who owned his house. The bank did. He knew that because he wore that pain every week in hard yards. Indeed he would have died in a mortgage if it wasnt for the kindness of an employer who paid out redundancy when he was dying of ‘everything’ cancer.
There you go …thats ‘ownership democracy’. The bank owns it, you get shafted your entire life working - for the hope that your kids might get a better shot than you do. Call this democracy what you will - for people struggling to improve their lot its ‘wage slavery’ in another sequin sprinkled comfy blanket of bullpucky.
Winston … i know I am being very anti and cynical - but to me … its a hero who ups the minimum wage (thanks). Its a heroic thing to propose dropping the price of bread and petrol a few cents (gst down to 10%) and its a real heroic thing to raise the bottom tax line. These are strong worker oriented socially responsible policies and NZ First should be applauded for them.
Why do I feel cynical …because some prick put them up in the first place - and they will hang around - getting help from the true owners of this democracy until they can twist that screw just a little bit more, then more then more.
So Jens … if you are serious about an ownership democracy …then you must be serious about casting certain principles in stone, and to do this one must have an iron clad constitution - so I say …yes … ownership democracy but underlined with a solid and unchangable constitution - which will at least make the true owners have to carry a slightly more violent tint of green greed while they suck the marrow out of our bones.
Regarding ’sucking the marrow out of your bones’ … Winston - can you also consider doing something to curtail the attrocious tax and spend at the local government level. What i see happening is the local councils in this country have some kind of deal with quotable value and these guys go around racheting up (artificially) house prices as quickly as they can. Man … you should see the crap they give value to to get the books better. I suspect it is because these local councils are borrowing on the value of their baronies.
Good luck with the election
October 11th, 2008 at 3:23 am
kiwi saver is good thing for N.Z.er it gives us the opportunity that we can all have golden years one day. As a person in my 20’s, kiwi saver works great, there should be no excuss for not been a part of it, you dont even miss the 4% or even 8% it leave your pay with out you ever thinking about it. I think it should be made compulsary like in Oz. Kiwi saver is a plan for a brighter future.
October 12th, 2008 at 7:02 pm
Thank you Winston for reponding to my earlier comment, i do appreciate your view and am committed to again give NZF my party vote, while at the last election i would have been the third that wanted a National led Government i am confident it is possible again regardless of what Keys said. The most important thing for NZF is to surpass the 5% threshhold and keep the greens and act out of government at all costs.
October 30th, 2008 at 8:08 am
Hi Winston,
I would appreciate your take on the 15Billion currency swapping arrangement with the US. How does this help us - as considering that the US Fed Reserve has lowered its rate to 1% this morning …it strikes me right now that it cannot even give its money away!
Where is the Gold standard in all this … well and truly evaporated - and it seems to me that we are IN a new era when the cards are getting put on the table … and its going to be more about who your friends are than how much money you have - I can almost here the printing presses bashing out US bank notes as I type!
Winston says: Chris, it would appear to be a prudent move by the Reserve Bank, but the truth is that the horse has bolted. We needed a stronger focus in the past on the effects our high interest rates were having on our exchange rate and current account deficit - now we are very exposed to the ill winds blowing. This is why NZ First is saying we must change the Reserve Bank Act so that the focus is not just on inflation, but a whole-of-economy approach.