No Minister

Admission of defeat

The tax policy National announced this week, which consists of temporary tax cuts after the party declared only recently that it wouldn’t offer tax cuts, is a clear indicator that it has accepted it will lose this election. Its priority now appears to be to try and prevent a truly crushing (no pun intended) defeat.

They’ll be aware as I am that cutting public spending and using borrowed money to provide hefty tax cuts to the wealthy during a recession would be a disaster for the economy, so the only logical conclusion is that they’re aware they won’t be in a position to have to do what they’ve promised. The proposals are an appeal to their base (also the dimmer bulbs among lower-income workers) and an attempt to get some of their voters back from ACT.

Good to know. My interest now will be on whether or not Labour gets to govern alone, the answer to which I of course hope is “No.”

Written by Psycho Milt

September 19, 2020 at 8:00 am

Posted in New Zealand

13 Responses

Subscribe to comments with RSS.

  1. Wondering about the handing of millions of tax payer guaranteed borrowed money to long established “A J Hackett” director John Davies to enable it to “What”??
    Now how does that compare to allowing Mr and Mrs Struggle from Struggle st to keep some of their hard earned to strive to remain solvent until the Madness of the current government in their big spend up on ill-advised nice to be praised for in the bought and paid for sycophantic media.
    Grunter seems to be floundering to understand exactly what the chicken entrails are suggesting re the GDP figure and the politically lipsticked PREFU.

    Gravedodger

    September 19, 2020 at 8:44 am

  2. “Mr and Mrs Struggle from Struggle St” my arse. They’d get pocket change from this and even that would be whipped away again via cancelled minimum wage increases. The big money would go to people on high salaries, landlords and other property investors, to (as you say) enable them to do “What??”

    If the aim of the policy were to stimulate the economy through increased spending, it would benefit people below the median income more than those above the median. It doesn’t, so stimulating the economy can’t be its intended purpose. Hence my conclusion as to its actual purpose.

    Psycho Milt

    September 19, 2020 at 10:12 am

  3. Sorry Milt but you’ll just have to suck it up .

    This will be the best election The Gnats could ever loose. Now that your mob has successfully fucked NZ they’ll have three years (or maybe just two) in which to conclusively demonstrate their total inability to manage anything.

    adolffinkensen

    September 19, 2020 at 10:16 am

    • Er, wasn’t last time, when the option was being saddled with Winston Peters for three years, “the best election The Gnats could ever lose”?!

      Kimbo

      September 19, 2020 at 10:24 am

  4. Milt … you just haven’t figured it out have you … or perhaps you have. It’s a massive point of difference between Labour & the Greens and National. With the former it’s taxing your way to prosperity (LoL); with the latter it’s a recognition of what’s required for the here and now.

    You’re stuck in your socialist bubble. The Government is better placed to spend YOUR money than you are … strange world you inhabit.

    The Veteran

    September 19, 2020 at 11:05 am

    • … or perhaps you have.

      Well, yes. Read the post. I agree that National’s interest in using borrowed money on tax breaks for the already-well-off is a massive point of difference between National and Labour/Green, just not one with wide appeal. It should help shore up their base and maybe pull a few back from supporting ACT.

      The Government is better placed to spend YOUR money than you are … strange world you inhabit.

      In a lot of cases, the govt is better placed to spend ‘my’ money that’s paid in taxes than I am. For example, I wouldn’t want to buy a school or hospital even if I could afford one. And in the particular instance of this proposed tax cut, given that NZ’s tax system pushes people to invest in property, the wads of cash National would be borrowing to hand on to me would go into paying mortgages a bit quicker than they would have otherwise, That might be nice for me personally, but for the country it would be better if Labour and the Greens were doing something useful with that money.

      Psycho Milt

      September 19, 2020 at 1:03 pm

  5. Labour in the UK in the last election taxed themselves to prosperity…….worked a treat for Boris.

    Talking of taxes I see Labour have just announced 10 days sick leave.

    Boy thats going to go down like a bucket of sick in the private sector. Put ALL staff on contracts.
    Even the cost in the public sector will be enormous.

    Milt you were saying someone is desperate… I think you have the wrong party (again)

    rossco

    September 19, 2020 at 11:43 am

  6. and Milt … I guess you’re against the announced business stimulation package too … allowing businesses to immediately deduct new investments up to $150,000 and double depreciation rates for investments over $150,000 in Plant, Equipment and Machinery. But then you guys don’t understand business.

    The Veteran

    September 19, 2020 at 11:52 am

    • Yeah, but then you’re one of “the guys” who thinks the Government reneging on it’s Kiwisaver commitments is a good idea, so “you guys” don’t understand the social trust that enables modern liberal government. And especially curious that, having prophesied financial doom if we don’t deal public indebtedness, you now support a tax cut that will diminish the revenue to pay back that same debt that has you thinking so…irrationally.

      Anyway, on balance and in the medium term I think a tax cut will currently do more than raising taxes or paying down debt to stimulate the economy. But much like your recent post and resulting discussion about the new Labour “rich prick” tax policy, tax cut and hike announcements by the two main parties are just rearranging a few things on the margins. But it affords them the opportunity to scream “Armageddon!!” about the other party’s vote-catching alternative to energise their base. Yes, the individual policies make a bit of a difference, but it is how they fit within overall fiscal policy that counts.

      And at least Milt last time did seek to address the issue of how to make the largest cost New Zealanders face – housing – more affordable. Mind you, in a world where overseas capital flight is so easy, I doubt death duties and a CGT will shake much cash from the passive income-earning classes whom Karl Marx despised. 😳😂

      Kimbo

      September 19, 2020 at 12:31 pm

  7. Kimbo … are you saying that despite us being in the worst financial crisis in decades previous commitments must be honored. There is a certain divorce from reality there. Many will applaud the promise to get rid of bracket creep by indexing the thresholds to the rate of inflation. The Cullen Fund is not sacrosanct and any pause in contributions can be made up by extending the age of eligibility in small steps well signaled in advance. As for Kiwisaver and the proposal to allow business owners to access up to $20,000 from their account to invest in their business is timely and sensible.

    Not sure Milt would thank you for highlighting the government’s Kiwibuild failure to nor the promise to control the price of housing. The median house price growth was 8.16% in Aug 17 doubling to 16.37% in Aug 20 … source interest.co.nz

    The Veteran

    September 19, 2020 at 3:38 pm

    • Yet again the Cullen Fund is not Kiwisaver, and it is not in the same “do not go down this route” category.

      Some commitments should be honoured, as a failure to do so while collecting the comparative chump change is not worth the hassle and poisoning of public goodwill. Both major parties reneging on their promise not to (in Labour’s case) introduce or (in National’s case) retain the National Super surcharge is a case in point. Given your continual railing against Winston Peters and his pernicious effect on NZ politics, it is especially amusing to see you overlook the “inviolable political consensus” angle, as that bloody surcharge, even more than the Winebox or the BNZ bailout was the issue that gave the old populist snake oil salesman the long term impetus that still draws votes over 30 years later.

      That’s the sort of unexpected and unintended cost of breaking a promise and stealing from people’s retirement by suspending government contributions to Kiwisaver. Especially when the Government, whether led by either main party, have previously encouraged and coaxed them to sacrifice current spending power.

      And once you forfeit the good will and certainty that government will honour its commitments, then you lose the requisite public buy in to make any short, medium and long term Covid economic recovery plan work.

      Kimbo

      September 19, 2020 at 4:17 pm

  8. Yagattalarf when you see someone extolling the ‘virtue’ of social trust over and above the ‘evil’ of fiscal rectitude. Tells you all you need to know.

    adolffinkensen

    September 19, 2020 at 5:25 pm

    • And when you see pig-headed conservatives advocating tax cuts at the same as, for reasons of alleged financial rectitude, calling for the canning a (cross party consensus) government payment while still expecting the little people and their struggling employers to pay up during a financial crisis

      …you know you are dealing with people who know the cost of everything and the value of nothing.

      But as per a variation on the challenge Tom Hunter issued recently to those wanting higher tax rates, anytime you and The Vet wanna “take one for the team” in the current trans Tasman financial difficulties and give back your Nat Super and Australian and pensions…

      Kimbo

      September 19, 2020 at 6:00 pm


Comments are closed.

%d bloggers like this: