Labour Left supports tax cuts
September 30th, 2005 at 2:46 am by David FarrarAustralian Labor’s Julia Gillard, generally regarded as being on the left of the party, has come out and endorsed tax cuts. This leaves NZ Labour as being almost the only party in the world, left or right, which doesn’t support tax reduction.
Gillard says for “those who aspire to move beyond welfare to work, a cut in tax is not just as good a way of increasing a breadwinner’s take-home pay as a rise in wages, it is a better way.”
Hat Tip: Whale Oil
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September 30th, 2005 at 8:20 am
At this stage the only people who should get tax cuts are corporate tax payers because some of the tax savings will get reinvested into income producing assets. The average PAYE tax payer in NZ has used their high recent income to get into heavy debt borrowing to finance over priced unproductive housing. 90% of household wealth is tied in housing at record personal debt levels.
At this stage with the housing boom if you give these people their money back they will piss it against the wall. When housing prices fall in line with incomes but the interest on debt goes up the only organization with any sort of money will be the government. Labor for its many many faults and horrible horrible problems has invested some of the record tax receipts into SOEs and the Cullen Fund. The government does therefore have a decent sort of asset base as opposed to majority of New Zealanders. For a while we are going to see a rich government and a generally poorer public.
What Labor needs to do is vastly increase the personal tax rates and invest the proceeds into income producing assets and when the housing market cools and interest rates rise then start handing out tax cuts.
Vote:September 30th, 2005 at 8:38 am
The New Zealand Labour Party has put its stake firmly into the ground for welfarism. They even design welafre payments to the middle income earners and call them tax cuts. In NZ we have a large constituency firmly addicted to welfare, the whole notion of taking something for nothing in return. The NZ Labour Party shamelessly supports and encouranges such people.
Vote:September 30th, 2005 at 9:08 am
Unfortunately Labour is more inclined to bribe it’s supporters than to do what the country really needs.
Vote:September 30th, 2005 at 9:26 am
Oh come on guys, Labour promise tax adjustment in their last budget. They believe in tax cuts provided they’re moderate and three years away (just in time for the next election).
Vote:September 30th, 2005 at 9:36 am
Pull your head out of it Marple – you call a tax cut they would enable you to buy a whole packet of chewing gum moderate? you’d be lucky to get a packet of chewing gum anyway the way inflation looks like it is going
Vote:September 30th, 2005 at 10:01 am
That is why there is and will continue to be a white flight across the ditch. It will continue to climb as it has done in recent years. Bit of a no brainer really, you are talking about a country where the government is working for the good of Australian’s, maybe every policy isn’t popular (Iraq), but nice to see a country with “BALLS”. Compared to here we have a government that is quite happy to endorse segregation, ignore the needs of the majority for the support of a few, over tax wage and salary earners so that they can artificially redistribute unearned wealth to their core support, tie up necessary infrastructural improvements in legal mine fields.
Vote:You can see how well this extortion train is working with the threat of a blockade of the 250 tonne transformer destined for Huntly power station, unless the local Iwi gets another hand out, it’s time for this crap to Stop!
September 30th, 2005 at 10:25 am
anon, get over yourself. It was a half wry comment. I don’t think you deserve a tax cut until you find yourself a sense of perspective.
And it’s nice to see you and your racist alarmism and selective overstatement culma.
Vote:September 30th, 2005 at 10:33 am
Oh, I’m over myself Marple, in fact I’m quite sure I was never under myself, I don’t think you desreve full wryness untill you pull your head out of it.
Vote:Seeing as you you are so all knowing perhaps you could tell me what my sence of perspective has to do with tax cuts for all tax payers you pompous berk.
September 30th, 2005 at 10:51 am
Oh, I’m not in the slightest bit all knowing anon. For a start I didn’t realise that you weren’t under yourself. Your mother looks a lot like you.
Vote:Meanwhile, I really hope you get your tax cut because I’m desperate for my crack at full wryness and I’m not sure I’ll ever be able to pull my head out of it unless your stolen earnings are duly repatriated. For the record, I’m not anti-tax cut and I thought the last budget was problematic. I would differ with you however in seeing it as an abomination, perpetuating the greatest injustice ever visited upon man or beast. But that’s probably just my pomposity.
September 30th, 2005 at 10:54 am
DPF has a habit of mis-stating matters to advantage a particular perspective. Labour has said it will adjust the tax brackets at a cost of $428 million to 2008. All you need to do is check Cullen’s budget speech.
DPF: this is at best clumsy, at worse, just plain deceitful. It’s a strawman argument. If you want a substantive discussion, you could have easily said the Gillard/Labor want to reduce Australian federal tax from their current unprecedented levels (effective marginal tax rate of 49 cents in the dollar for top income earners) but then you’d not really have much of a point…
Fact is Labour has a savings and tax plan that is (a) not inflationary (b) sustainable and (c) modest by comparison with with the profligate promises of the National party (reinventing its economic policy along Keynesian lines according to some commentators here).
I’m more than happy to debate whether or not it should have gone further, and expect it will in the medium term, but you’ve polarised this discussion (informed people on one side and hysterical rhetoricians on the other).
Anon – if you’re concerned about inflation, then you’d not support Nationals plan or do you not understand the relationship between loose fiscal policy and inflation?
Vote:September 30th, 2005 at 10:58 am
Ms Marple, please inform as to why I am a Racist Alarmist,”I look forward to this one”. Oh and by the way I am able to be on either electoral role, so please take your Racist comments silly person and store them. You Ignoramus
Vote:September 30th, 2005 at 11:18 am
culma: what evidence is there to suggest NZers move to Australia to avoid tax? It’s a highly contested point that there is any advantage at all. While you’re at it, what information do you have that shows that the migration is “white”. The stats don’t record ethnicity – are you permanently stationed at Akl airport? There’s a fair number of Tangata Whenua here and, if you’ve read the late Michael King’s history of NZ, they’ve been coming here for close to 200 years.
NZ loses people to larger countries where there are perceived advantages – wages is one where trade and professionally qualified people will have some cyclical advantages (they still exist in the construction industry but I’m not certain they exist any many others). It’s also important to note that there’s evidence to suggest that NZ migration to Australia is slowing as the NZ economy outperforms Australias.
All of this is a function of global labour markets – something advocates on the right usually support. Australia faces acute labour shortages to the same extent NZ does – both countries are small labour markets by comparison with Europe and the US, both will always face migration pressures and will look to supplement their domestic labour force through immigration – Australia is significantly increasing immigration targets despite refusing to accept refugees…
I’ve lived in Australia for some time now and like it (but regularly return to NZ for many reasonsa and will return to live there) but I am far from satisfied by the historically high income tax rates, compulsory super, medicare levy, medical insurance, petrol-, sugar- and airport-levies, stamp duty, capital gains tax etc.
Yours is a facile and simplistic argument, the kind that only ill-informed and over-confident people have when they are not across the data.
Vote:September 30th, 2005 at 11:23 am
Marple -your mother jokes now- are you a gangsta rapper now too?
no Paul, I’m not particularly concerned about inflation, it was a general statement about how useless the labour “tax cut” will be.
“(informed people on one side and hysterical rhetoricians on the other)”
Vote:Is anyone on the left anywhere on earth, with the noteable exception of Dim, capable of arguing a without this sort of sweeping holier than thou cack?
September 30th, 2005 at 11:33 am
LOL Culma “the government is working for the good of Australian’s’. The latest IR reforms is one area where this Government is seriously out of synch with the vast majority of Australians.
Vote:September 30th, 2005 at 12:00 pm
Anon: what’s sweeping about it – I think it very accurately describes the inadequacy of your arguments. You clearly know very little about the Austrailan tax system, labour market economics, or fiscal policy.
I’ll make no apologies for having knowledge and information to support my views, though I’m more than happy to debate them with people who have different information, interpretation, and political views. Nor will I resist criticising others’ arguments (I said your argument was facile, you may not be) when it is obvious they do not.
Vote:September 30th, 2005 at 12:14 pm
culma, I don’t give a shit what your roll eligibility is. Both the etymology and common usage of the term “white flight” rely on racist assumptions and implications. The notion that the Australian government is working for “Australian’s”[sic] is either naive or racist, given their persistent lack of redress to the position of the indigenous population. The suggestion that New Zealand would be better off adopting similar priorities does a huge disservice to those who have worked to promote positive racial policies in this country. I don’t believe you can show me a country where indigenous cultures or even simply racial minorities are thriving in a government culture of assimilation or complete disengagement. As for your alarmism, the suggestion that abuses of system or status are somehow systemic in the manner that your “extortion train” comment implies is quite disingenuous. New Zealand and New Zealanders should be absolutely critical of genuine cases of extortion. And we have been, and we will continue to be and a balance will be found. This is a relatively young process. To suggest that it’s blown into some unmitigated force for the export of white folk is complete alarmism. You alarmist racist.
Vote:September 30th, 2005 at 12:15 pm
Er I think you are confusing me with Culma. My argument was with her royal wryness Ms Marple, I made no comment on Australia.
How is it sweeping? “we are all well informed – you are all hysterical rhetoricians” no not sweeping at all is it.
Vote:September 30th, 2005 at 12:24 pm
I think you’ll find anon that the correct vernacular if I were indeed going “gansta” would be “yo mama”. I was just being crass. Not particularly constructive, but a little cathartic on a particularly grumpy morning. Sorry.
Vote:September 30th, 2005 at 12:32 pm
paul w, LMD, I find it ironic that both of you are replying from Australia, don’t wait people come home and share in this little piece of paradise NOW. Paul I don’t see where I stated that you could jump the ditch to avoid paying tax?, I will spell it out slowly for you, If a left wing party like Australian Labour is seriously thinking of adopting a modified version of the Irish model of taxation, then this (even though they are in opposition) is attractive to someone that is prepared to work hard, Myself, as even if there is a change in Government still is attractive!
Vote:The other thing that is pushing me toward the Aussie side of the ditch are the essential services, Health, Education, Etc these are far superior on that side of the ditch, admittedly I only have the opinions of friends and relation’s to go on not Govt sculpted figures, so please don’t quote me figures from Helen’s hand book. I make my assessments from what I witness not what I am fed.
September 30th, 2005 at 12:39 pm
Anon: you made a comment about tax cuts which is I thought was ill-informed and rhetorical and was made even less informative by your follow-up comment that you “don’t care about inflation”. I think this kind of uninformed commentary needs to be criticised for what it is.
I didn’t confuse you with culma, I think you both occupy a similar space in this blog, that of uniformed rhetoricans.
Vote:September 30th, 2005 at 12:46 pm
That’s because we pay more tax culma. Even though labor is now trumpeting tax cuts (they seriously are offering NO alternative to Howard – just look where they have ended up on their anti terror policies….worse than pathetic) in fact polling consistently shows there is no great demand for further tax cuts out there in the electorate. People invariably say they want the money spent on health and education, they do not want further tax cuts.
Vote:September 30th, 2005 at 1:04 pm
apparently Tony Blair gave a speech about how he’s gonna commit himself to privatising education and health in the time he has left two days ago, according to Ruth Richardson who came to lecture at a macroeconomics class yesterday here at Canterbury university
a review is available at my weblog jesuscrux.blogspot.com
Vote:September 30th, 2005 at 1:10 pm
Ms Marple, Racism what is that, where some one is branded with a name like PAKIHA, or threatened with Civil War in 6 different instances over a 12 month period, the world over peoples that once solely occupied a land are now having to share with others. If they loose their identity, that’s their problem. Lets hear what you believe. Not what you perceive I have said, or are you a true fence sitter. Don’t have the ability to actually add something constructive, only criticism of the views of others, “OH SHIT” you aren’t related to Helen Clark are you.
Vote:September 30th, 2005 at 1:19 pm
Ms Marple – Yes it would be yo mama, no worries, a bit of the crass on Friday morning never killed anyone.
Paul W – You did confuse me with Culma because I didn’t make the comment about the Australian labour market which you attributed to me.
As Craig Ranapia once said “don’t go putting things into my mouth until at least the second date”. I never said that I “don’t care about inflation” so please try not to mis-quote me, how ever convenient it might be for you.
What I said was that I am not particularly concerned about inflation, I don’t claim to have any special information about inflation that you might not have, inflation will happen to some degree, labour new 0% interest student loan scheme and Working for families welfare package will do little to slow the rise of inflation now will it?
What I am interested in is keeping more of the money that I earn so I can pay off my mortage faster (yes it is fixed) and then invest my own money else where so I can protect myself from any inflation.
Vote:September 30th, 2005 at 1:27 pm
As a commited member of the brain drain army currently stationed in Melbourne, I can assure you my reasons for signing up were not based on tax. I just worked it out and I believe I pay more tax here than I would in NZ.
Though with NZ’s slightly higher GST countered by the fact im forced to take out private health insurance I have no idea where I would earn more. Nor do I care – it’s not important to me.
I came here because its bigger. I’m young and easily impressed by biggness.
Vote:September 30th, 2005 at 1:33 pm
Those who argue for tax cuts at a time when the economy is booming and accompanied by a growing social deficit are morally bankrupt. We need to spend taxpayers money on fixing up our health and education systems, providing people with the opportunity to enter the skilled workforce and fair pay rates. IMHO, the reason people move to Australia is that employers over there pay fair wages (until Howard’s workplace “reforms” kick in) whereas New Zealand bosses do not value their workers.
Vote:September 30th, 2005 at 1:39 pm
“If they loose their identity, that’s their problem.”
culma, how am I supposed to add anything constructive when you keep dumbfounding me with statements like this. How about I restate a point I’ve made earlier:
Vote:I don’t believe you can show me a country where indigenous cultures or even simply racial minorities are thriving in a government culture of assimilation or complete disengagement.
Whether you personally ascribe any value to a culture or not (and if you don’t I have zero respect for your disdain toward growing the scope of human knowledge and understanding) the social reality is that ethnic communities have, by historical accident or historical misdeed, been marginalised within broadly western societies. They were often largely dispossessed of what wealth they had (or perhaps of what they had that could be converted into wealth in their new realities). They were usually treated differently from Europeans at the same time as being subjected to programmes that sought to assimilate them by destroying their links to their culture (a policy that ended up being a dismal failure). The end result is a stain that marks both Maoridom and non-Maori New Zealand. It’s not going to go away. It is exacerbated by the socio-economic hangover of colonialism. It is not going to get any better by ignoring it or by actively encouraging (or forcing) assimilation. The vast majority of race relations endeavours in this country are actually achieving positive outcomes for both Maori and for the wider community as Maori find culturally pragmatic solutions to their disproportionate problems such as health, education and criminality. Sure there are problems with some of these programmes. But like I said, the process is young and a balance will come.
So, in actuality, they don’t lose their culture. Their culture can be a positive force or a negative one. And that is not just their problem. It’s a problem for all of us.
Or at least that’s what I believe.
September 30th, 2005 at 2:12 pm
Well done Ms Marple, now the Dinosaurs died off millions of years ago but the Tuatara lives on, a living breathing Dinosaur, a bit like a growing evolving culture, I look to the new All Black Haka, this in my opinion was fresh why? Because it wasn’t Maori, certainly wasn’t European, wasn’t strictly polynesian, or Asian, but it was and is 100% KIWI.
Vote:If Maori want to teach their children the ways of their forefathers, go to it. If they want to operate on the same plane as all other Kiwi’s can’t fault that either, but please don’t be offended if I carry on bringing up my children, with all the devotion and dedication that I can muster, if I ignore what Maori are doing well Tough, I have more important things going on.
Go to http://www.treatyofwaitangi.net.nz, the Littlewood Treaty documents, then form your own opinions, you may be enlightened. TTFN
September 30th, 2005 at 2:34 pm
culma – what? I don’t really understand half of your points ’cause they’re so poorly constructed.
What is comprehensible, reads like you think that people move to Australia ’cause of better social services – or so your friends tell you – frankly, not the most compelling argument and almost impossible to prove or disprove.
My own experience is that they are broadly similar – for instance there are labour shortages in both the NZ and NSW health systems, public transport is better in Sydney and Melbourne than it is in Akl but is shite in SA, there’d be plenty who’d argue that the compulsory education system in NZ is better than most Australian states but very few that wouldn’t be jealous about the funding for higher education…
My point is that there will always be pressure on countries like NZ and Australia because of the attractiveness of larger markets like the EU and the US but that NZ migration to Australia may well be slowing somewhat as the NZ economy grows at a faster rate that Austraila’s.
Vote:September 30th, 2005 at 2:41 pm
Michael said “We need to spend taxpayers money on fixing up our health and education systems”.
The morally (and fiscally) bankrupt position is to throw more money at the bottomless pits of public spending in those areas.
Let the taxpayers spend their money the way they prefer and go private if wish to do so.
Vote:September 30th, 2005 at 2:53 pm
“Maoridom and non-Maori New Zealand. It’s not going to go away. It is exacerbated by the socio-economic hangover of colonialism. It is not going to get any better by ignoring it or by actively encouraging (or forcing) assimilation.”
Sadly Ms Marple you are incorrect… Emigration and cross racial reproduction will eventually guarantee that Maoridom will become a historical hobby of interest to a very limited number of world citizens.. Future generations will be the poorer.. I can’t imagine what will replace todays treasure but then change is assured and none of the ‘crap’ that you are spouting will make the slightest difference over time… db…
Vote:September 30th, 2005 at 3:07 pm
I’m not sure where this fiction arises that somehow NZ pays less tax than Australia. To quote Roger Kerr in the NZ Herald recently:
[the latest] Outlook forecast that spending by governments at all levels would total 35.8
per cent of GDP in Australia and 38.7 per cent in New Zealand in 2005. …
http://www.nzherald.co.nz/index. cfm?c_id=3&ObjectID=10342138
And it has pretty much always been that way:
http://www.finfacts.com/biz10/taxpercentagegdp.htm
Vote:September 30th, 2005 at 3:25 pm
Paul w, I think you are taking the PISS as this is the second time you have twisted the content of a sentence to mean something completely different, if I lost you somewhere along the way I suggest you return to the previous statements.
Vote:September 30th, 2005 at 3:28 pm
db… I disagree.
Maoridom is stronger now than it was 20 years ago but, simultaneously, NZ is more multi-cultural.
Maori language is back from the brink and starting to thrive, Maori culture is already thriving, Maori business is in great health (Te Ohu Kai Moana has achieved remarkable progress allocating fisheries assets) and both Maori and non-Maori are reaping the benefits.
It is not the aggregate pool of genetic material that defines Maori – it is the dynamism of the people. The Brash hiccup is just that, a bump in the road, the direction is sound and secure.
Vote:September 30th, 2005 at 3:44 pm
culma: there was a sentence you wrote? There, now I am taking the piss but only ’cause I don’t understand half of what you’ve written.
anon: you are aware there’s a connection between inflation and interest rates right? Will Labour’s student loan interest policy be inflationary; possibly, but remember there are real constraints on fees so the policy should fuel fee increases (and fees are the major driver of borrow despite what Brendan O’Donovan might think).
Vote:September 30th, 2005 at 3:45 pm
Michael I don’t wish to debate with you that the Nz Econonmy is growing faster than the Aussie one. One difference is that Australia is growing by exporting and escalating product prices while New Zealand’s is growing solely by internal consumption of imports and static exports.As for Miss Marples implications that New Zealand’s current aparthied policies are in the best interest of our society, well, thats the difference between Labour and National.
Vote:September 30th, 2005 at 4:02 pm
Paul W – christ man, are your eyes painted on? my mortage is on a fixed, so a rise in interest rates doesn’t bother me.
Vote:September 30th, 2005 at 5:58 pm
A question for Paul W.
Vote:Can you tell me the result of this scenario ??
A married couple who really know that they are Maori, move to Australia for work, always intending to return to NZ.. After arrival they have a couple of kids who grow up in Australia, these kids regard themselves a Australian, they find Australian partners and start families of their own..
The origional parents eventually die in Australia without returning to NZ and before any passports were obtained for their children. These parents had made some attempt to influence their kids when they were little BUT like all kids they do not pay attention unto it is too late..
This next generation has no extended family on hand so they rely greatly on themselves..
They work hard and prosper but act and think like Australians..
WHO ARE THEY, WHAT NATIONALITY ARE THEY, WHAT LANGUAGES DO THEY SPEAK, Will they know how to connect with their ancestors tribal affiliations,
WILL THEY WANT TO ???? db..
September 30th, 2005 at 6:09 pm
Ah, Julia talking out the side of her mouth again. She is making a pitch for the centre as a leadership tool. If she was actually stupid enough to believe what you report her saying, then she doesn’t deserve to be Labor leader.
Actually, thinking about that, and given the state of the ALP, she probably *does* deserve to be Labor leader.
Nothing can substitute for sustained real wage growth, driven by improvements in productivity, as the way to improve living standards. You can only cut taxes to zero and not beyond; growth is the only way to really gain incomes. Something voters seem to have acknowledged here, more or less, with the last election result.
Vote:September 30th, 2005 at 6:21 pm
anon: I thought we were talking about the NZ economy, I don’t give a toss about your financial situation.
db…: that scenario exists now, it’s not terribly unusual and the answer depends on the individuals – what kind of dumb-ass question is this anyway and how on earth does it relate to the issue at hand.
There are literally hundreds of kapa haka groups in Sydney, there are thousands of Maori learning Maori in NSW, there is at least a couple of hundred Maori that support Easts over the Warriors – how on earth does this help us make sense of your claim that Maori will become, what was it you said – a hobby!
What is it with the right that requires the world to be simple and categorises people along such unsophisticated lines. I’m sure there’s a sensible answer to this question, but in this instance I thinks it’s ’cause you’re simple.
Jordan: how much do you actually know about the Australian economy or the ALP? Your comments are very odd.
Vote:October 1st, 2005 at 11:31 am
Final election results in . Labour wins!
Labour-Greens-Maori- JAP= 61 seats out of a parliament of 121.
See you in 3 years guys, since I will be offering grief counselling every day till then.
With UF with 3 seats and NZF with 7 seats , that gives a centre party buffer of 10 which with Labour-JAP of 51 , doesnt allow the Greens/Maori any veto !
Vote:The best possible result for labour of all the combinations available !
October 1st, 2005 at 1:22 pm
So your eyes are painted on, please, keep your toss.
Vote:October 1st, 2005 at 1:30 pm
I’ve notice a tendency in many discussions recently for some to start of with remarkably strong views and broad issues and then rapidly retreat to narrow and essentially semantic arguments: anon – you might have set the record for the shortest half-life of any argument so far – congrats.
Vote:October 1st, 2005 at 9:06 pm
Buzz of course Australia which has 5 times the population ( 20 mill) and and economy 6.6 times larger ( GDP 611.7 billion v NZ’s 92.5 billion), would have a lesser proportion of government spending. Its called economy of scale.
Vote:Of course they have a compulsory superannuation which levies employers 9% of each employees wages, sounds like a tax to me that isnt counted in the stats.
The same super is paid from taxes here.
October 4th, 2005 at 8:34 pm
Sadly the problems of consumption is quite true and while tax cuts would be wisely used by a fair amount, the remainder that blow it on Plasma TVs ruin it for the rest of us. It’s the paradox of Government… in a sensible economy, we wouldn’t need to force people to buy things (through taxing and spending on public goods) when they could use their money more wisely. When people aren’t wise however… it gets tricky, and is really quite annoying. Because my next door neighbour can’t help himself, we all to be protected from ourselves.
Basically where I stand is laissez-faire while accepting the current reality that requires it to be toned down a lot. What’s good for me may not be good for those impulsive people down the street, and while I may personally be all the happier that they drink themselves to death and remove themselves from the gene pool… it’s not exactly politically viable.
So, reduce corporate income tax quite substantially, personal income tax reasonably, increase GST and reduce Govt spending to make up the short term differences. Not particularly radical so you won’t get tossed out of power before it comes to fruition, and encouraging people to invest their tax cuts.
Vote: