Dr Scrooge
People moaned when Dr Cullen was talking $10/week possible tax cuts, but it is even worse than that. He has now clarified that even that much is far too much money to give back to taxpayers:
“Some have misunderstood what I said about the $10 thing. . . (thinking) that is what people were going to get. What I was saying was even that was well above what would be an acceptable level of fiscal loosening,” Dr Cullen said.
As the graph above goes, Labour has taken in a massive amount more taxation and revenue in the last six years. And Dr Cullen says even $10 a week back is too much.
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February 10th, 2007 at 11:40 am
Gawd, just imagine being his wife! I bet he was a right scrooge with her housekeeping money too.
February 10th, 2007 at 12:33 pm
Gawd, just imagine being his wife! I bet he was a right scrooge with her housekeeping money too.”
I don’t need to imagine….hes been screwing me for years….bastard!
February 10th, 2007 at 12:43 pm
The big increase in crown revenue emphasises that the electricity reforms are effectively a tax. Prices have gone up, necessary to stimulate invements and make renewables affordable. But Cullen has pocketed all the dividends, and ginven nothing back. That mean a tax increase of around $2000 for my household with children.
GIVE IT BACK!
February 10th, 2007 at 1:12 pm
The man is as mad as a maggot.
So it’s OK to give people 120+/week as welfare under the vote winning umbrella of WFF. But $10/week as a tax cut will do so much damage to the economy.
How can one man have such a big ideology when he clearly has such low intelligence. Being convinced about your position on economic issues normally requires some intelligence.
But if one one hand you can say giving people $120+/week is good and has no inflationary impact but $10/week would. There is only one possibility – you are a buffoon.
February 10th, 2007 at 1:41 pm
Can you overlay onto the same graph the growth in crown spending?
February 10th, 2007 at 1:41 pm
We could afford tax cuts, OCR cuts and those of us with a real job in the private sector might even be able to buy a house if we got rid of New Zealand’s real inflationary beast:
A massive public service bloat which over the last 7 years which has sopped up virtually all unemployment that hasn’t been redefined as a sickness benefit.
You can’t give a productive person a tax cut when you’re giving all the money they earnt by creating value to their loser brother bum, who is employed as a civil servant.
The Public Sector: New Zealand’s new, super premium welfare scheme. “For those beneficiaries who can get out of bed”
February 10th, 2007 at 1:48 pm
Don’t worry Burt, John, Kiwi_Donkey,Jillypig and James one day these fucking grasshoppers will get their winter and us poor ants will have the last laugh.
February 10th, 2007 at 2:29 pm
Thanks for posting the graph David. It just shows how hopeless the situation is (with all due respect to your optimism SSB). One interesting part is missing though – it looks like all the indicators were rising when Labour took office – bad National!
Could you point me to the verifiable figures back to say the Muldoon era? When were they best (ie minimum)?
Thanks also to all the lefties who lied to me saying “the government take has been fairly constant for many years now”. Now we have to go through the 80s all over again – thanks a lot. This country is in serious trouble!
February 10th, 2007 at 2:49 pm
He actually believes it’s govt. property….that explains the behaviour.
February 10th, 2007 at 3:31 pm
Porcupine: do your own research. Lazy leftie.
February 10th, 2007 at 4:38 pm
John: That last line’s a keeper. I’m stealing it.
Porcupine: Not exactly what you’re after, but this study by the IMF covers a number of factors from 1971 to 2002 and includes useful compaative data with other OECD countries. Check particularly Table 4 “Sources of Growth Decomposition”. Don’t you just love the image of economies slowly decomposing? Must bring warmth to the heart of old socialist revolutionaries everywhere ;-D
If reading things like “Δlog(K) = 0.1022 of Dependent Variable: Δlog(GDPPC)” makes your brain hurt (as it does mine) there’s always the erudite and informed Brian Easton to fall back on. I’m sure he’ll have covered it at some point on his website. It’s where I go when I want something fundamental explained in a way I can understand, with the added value of institutional memory, even if I don’t agree with every recommendation he makes.
Personally, I believe there’s a much more relevant, sensitive and easily measured index of taxation, to whit: The appropriateness of the level of personal taxation is directly proportional to the number of Kiwis working offshore for purely financial reasons.
February 10th, 2007 at 6:07 pm
The graph is great evidence that our taxes are not too high.
It has long been argued that one had too lower taxes to increase revenue to government. IObviously that is not true.
There is Cullen’s way and – he has huge budget surpluses despite generous help to families and some assistance to savings, he is lowering debt, increasing spending in education and health, boosting savings used in infrastructure and grwoing a Super Fund.
Whereas in the USA, there have been large tax cuts and a large budget deficit and thus a growing of public debt for most years since 1980 (the exception Clinton’s Presidency – obviously they have something in common – sustained growth and budget surpluses, left wing luck or just sound government policy?).
February 10th, 2007 at 6:10 pm
Rex
If a government tries to compensate people for low wages with low taxes. All that would achieve would be less public provision. We would then lose our place in the first world (with all the public services that implies)
and decline into a two tier society, one this country never wanted to be.
February 10th, 2007 at 6:13 pm
Tax as a per centage of the GDP goes up when companies make large profits (this not a bad thing) and when people borrow to spend (GST goes up).
February 10th, 2007 at 6:16 pm
But how did business make the profit (became more productive or by higher margins on power supply, petrol, etc) if profits/tax are rising against GDP.
February 10th, 2007 at 6:49 pm
Let’s deconstruct your “sound government policy”
“Generous help to families?” or a sad state where Cullen has spreading the tentacles of welfare dependancy into the middle class, making them all, “Labour’s families”. Helen’s surrogate children?
“Increased spending in education and health?” or wasting buckets of money with no regard for return on investment or accountability. If Cullen doled out the dosh in a business like he does with our taxes the shareholders would have long since demanded his head on a platter.
“Assistance to savings” you mean a hopelessly misguided ultra low risk, low reward savings scheme that will result in negative savings for New Zealanders, who should be using that money to pay off their mortgages. Where else can you get a guaranteed tax and risk free 8%+ return on investment?
Cullen has presided over a massive opex blowout and has consistently withheld capex leading to underinvestment in critical infrastructure (Electricity, Prions, Roads anyone?) which will constrain our economic development for decades to come.
We’re trying to build a knowledge economy and create growth on a grass mat in a straw hut, spending all our money on buffets for our unemployable friends, and investing all our compulsory savings into building our neighbours a factory so we can buy back the goods from them, with funds we privately borrowed from them.
Only a labour supporter would call that good financial policy.
February 10th, 2007 at 7:01 pm
Assistance to families – is not financial or economic policy, it is social policy. One which maximising revenues allows.
The fact that our wages are too low to enable people to afford their housing has to be resolved somehow. It is a necessary social policy.
Tax credits would only have been enough, if our house prices bore the same sort of relation to wage levels as they do overseas. But they do not and having ones families housed is part of essential social security for any nation with any pretence to commonality for it’s people.
February 10th, 2007 at 7:03 pm
I could add that Howards government has delivered a lot of help to families as well. In fact such policy is widespread in Europe …, it’s not something Labour invented – it was something Labour’s surpluses finally made affordable
February 10th, 2007 at 7:16 pm
“Increased spending in education and health?” or wasting buckets of money with no regard for return on investment or accountability.”
I realise there is no profit opportunity for those with capital in having public provision of such services. Otherwise I simply note National has never said it would cut any of the increase in spending. All over the world spending on health is increasing. And most countries also realise that their people need education to optimise opportunities/find a place in the global market economic order.
“you mean a hopelessly misguided ultra low risk, low reward savings scheme that will result in negative savings for New Zealanders, who should be using that money to pay off their mortgages.Where else can you get a guaranteed tax and risk free 8%+ return on investment?”
Many have yet to buy a house (and can thus save up for one via this) or have paid off their mortgage and can save for retirement through this. These have the greater incentive to take up this voluntary scheme. Those paying off mortgages are effectively saving by paying them off.
“underinvestment in critical infrastructure (Electricity, Prions, Roads anyone?) which will constrain our economic development for decades to come.”
Investment in all these areas has increased since 99.
“We’re trying to build a knowledge economy”
Which begins with spending on education …
and includes being smart enough to invest savings globally to both maximise returns and minimise risk.
Since we replaced handing out money for purchase of imports with focus on infrastructure spending (including education and health) the domestic economy has realised the golden mean – sustainable growth in all weather.
February 10th, 2007 at 7:25 pm
Hilarious stuff SPC…..
Labour surpluses for Howard in Aust??
Surely you’ve been drinking.
Howard’s first task upon being elected was to look at the Treasury books to find the socialists had an AU$ 80 billion black hole in the National accounts.
When,after after many years of paying the Federal govt debt back, zero was reached there was an outpouring of joy, Howard has been crowing ever since.
So corrupt had Keating’s process become that legislation now allows Oppositions to get the real briefing from Treasury pre election.
Labour surpluses for Howard…hilarious concept.
February 10th, 2007 at 7:47 pm
SPC – do not post a dozen times to a thread with a rambling series of post. Make one succinct post. If someone responds to it, then respond to their post. But you’re becoming like spam at the moment with seven posts over around an hour.
February 10th, 2007 at 8:05 pm
Whereas I would suggest, that one can only be succint WHEN REPLYING to long posts is by making short ones on each point. But if that is the general standard you have for posting here, thanks for clarifying that.
February 10th, 2007 at 8:13 pm
Fred
My point and it is a simple one, so you should not have missed it, unless you were trying hard to.
New Zealand Labour’s surpluses being used to income support families is not unique. This is common elsewhere – under governments of the left and the right.
“I could add that Howards government has delivered a lot of help to families as well. In fact such policy is widespread in Europe …, it’s not something Labour invented – it was something Labour’s surpluses finally made affordable”
To elaborate, – it was something Labour’s surpluses finally made affordable, it was not affordable under National (in fact National said they would not have done the same with such surpluses – even though right wing governments elsewhere have).
February 10th, 2007 at 8:28 pm
Try some remedial English…it’ll save band width.
February 10th, 2007 at 9:00 pm
Yes, I get your ad hominem point. If one is not right wing, one is not as good at being English as others in the colonies.
February 10th, 2007 at 9:05 pm
Congratulations DPF you are obviously getting so much publicity, readership and influence from this blog that Labour has hired a weekend propaganda blogger to fill in the gap left by Sonic and his union’s restrictive weekendlabour laws.
SPC, a little logic 101 – “everyone else is doing it” doesn’t qualify anything as a good idea.
If it did I’d be taking on loads of credit card debt, divorcing my wife and having illegitimate children.
February 10th, 2007 at 9:06 pm
Ah….English as a second language, should have guessed.
February 10th, 2007 at 9:15 pm
John
I agree in general principle that popularity is not conclusive, but I was originally responding to the idea that support for middle class families was something unique to Labour.
In New Zealand National offered a mortgage interest rebate and a family tax rebate – very middle class family friendly policy (from the days when they were the party ofgovernment).
February 10th, 2007 at 9:39 pm
“The Public Sector: New Zealand’s new, super premium welfare scheme. “For those beneficiaries who can get out of bed”
That is utterly priceless, yet sadly true. The growth in Government has had an infaltionary effect on the rest of us too. Our rent in CBD Wellington has increased by 36% over the last 4 years because of the pressure put on limited commercial rental space by Government Departments et el.
We we pass that cost on which contributes to inflation, so Cullen’s sollution is to wollop mortgagors with a tax to cool off the housing market, take a look closer to home “Dr”.
February 10th, 2007 at 9:57 pm
SPC – so it’s not an original Labour strategy, but then, what is? It’s the classic strategy of a vote buying government looking to prop up support in a wavering demographic.
Subsidies and rebates are the opium of the voting masses. Once hooked they’re impossible to give up. How about not paying the tax/levy/tariff/charge/excise in the first place?
Taxing and rebating is a horrendously expensive and inefficient exercise that does nothing but product a set of lovely looking figures to quote “we gave families $150 million of additional support this year”, and make thousands of families believe that Labour is giving them a higher standard of living.
But then, as we’ve seen with their attempts to deny the underclass with an army of statistics, that appears to be all that Labour cares about – lies to sell the voting public.
February 10th, 2007 at 10:04 pm
PDQ – nail on the head. The link is so plainly obvious I can’t believe commentators aren’t taking Bollard and Cullen to task over it. Raise the official cash rate tax on households to screw exporters and offset the inflationary expense of poor quality public spending.
February 11th, 2007 at 11:19 am
Glad to see so many people waking up to the public service (out masters) situation.
The other one that gets me is – big business prospers and small business suffers under labour. Of course the answer is obvious – it is much easier to control a small number of large businesses and let them control their employees than it is to control a large number of free, prosperous people with the brains and money to see through their scams.
And you get the spin-off of low wages -> high employment, enforcement of ludicrous overregulation, EEO compliance, …
February 11th, 2007 at 11:44 am
Oh and laugh!
“We’re trying to build a knowledge economy”
“Which begins with spending on education …”
Value for money in education spending has gone down 10-100 fold in the time of high tax take. Most of our education spending is on watered down, wasteful, feel-good, non-vocation courses.
Those that do good courses are often out of here, never to return – often contributing to the economies of our competitors.
February 11th, 2007 at 5:21 pm
SPC you characterise prudent fiscal management which sees the retention of a moderate surplus while reducing the tax take as a percentage of personal income as “compensating” people for low wages?
I see it as allowing people to retain as much of their own money as possible while taking enough to maintain and improve a solid infrastructure. Yet have high taxes and a failing infrastructure (as pointed out by John).
The corollaryof your theory, then, must surely be a policy which causes sustained growth in real wages, thus retaining and attracting back the skills we need to build the economy… a level of wages so fulsome that no one cares they’re being overtaxed by Dr Cullen.
Could you point me to the Labour policy(ies) which achieve that, please?
February 11th, 2007 at 5:49 pm
Porcupine
Allowing providers to determine courses based on demand was National policy.
February 11th, 2007 at 6:06 pm
Rex
1. Context. I was responding to those suggesting lower taxes was the way to improve incomes.
Tax rates are not the mechanism for that. Though income support for families (from tax revenue or targeted rebates) is common around the world.
The struggle is to do this (maintain our social infrastructure) and also upgrade our economic infrastructure on our low wage incomes.
2. Infrastructure does not fail within the term of one government cycle, it is the legacy of lack of investment in past decades.
We have been struggling here since the 70’s for the combination of surpluses and associated adequate investment in infrastructure. The current government is one of the few that is not culpable.
3. How to get real gain in wages (we have for 20 years been falling behind Australia)? Good question – does any party have an answer. And is government the one responsible/capable of resolving this?
Labour has tried to end the hands off government era and look at tax incentices (increasing depreciation allowances to encourage capital investment of profits, R and D, apprenticeships etc) –
I note that we have struggled since we floated the dollar (uncertainty over it’s instability and it’s over-valuation discourages productive investment) to even get a trade surplus let alone one sufficient to compensate for our low savings/reliance on borrowings.
February 11th, 2007 at 8:13 pm
Lol, SPC, classic communism to blame the economic ills of the country on the free market floating dollar. Our currency wouldn’t be overvalued if we weren’t using the OCR sledgehammer to crack a simple inflation nut.
Inflation equals the difference between the increase in the money supply less the increase in total productivity or net output.
Massive poor quality government spending creates inflation because the additional dollars spent do not create a corresponding amount of additional output. The government gets poor value for money and we pay the price through a decrease in our individual purchasing power.
Not only are they taking too much of my money but they’re not even spending it properly. Thanks Labour.
February 11th, 2007 at 8:24 pm
The OECD advised against BOTH tax cuts and government spending increases – on the ground that they were inflationary.
I note National did not promise to cut back any of the health or education spending made.
It just intended to cut taxes and reduce the size of the surplus. Now that would have been the most inflationary course.
Awarding tax cuts to the public and so generate a demand for imported consumer products, is not spending in the productive sector or domestic infrastructure (education enables future growth, health care maintains the existing workforce – so along with roads/communications/power etc are part of necessary investment) is the most inflationary course.
Until National can find a way to target tax incenticves to the productice sector, they are increasing the inflationary risk (deterring investment in anything but retail and cost plus service sectors).
February 11th, 2007 at 8:38 pm
Here’s a simple way to increase investment in the productive sector – decrease the official cash rate. Dollar down, less savings, more investment in productive sector. Then lower taxes and bank the real increase in your standard of living.
Will house prices will go further through the roof – possibly? But thet’ll eventually reach their real value then there will be more investment in product business instead of unproductive land.
Retarding property price inflation to the detriment of the productive sector and balance of payments is, well, retarded.
I’d rather see the government retard the banks ability to lend through the use of Basel II, than use the OCR to clobber all of us.
February 11th, 2007 at 8:41 pm
Plan B – cut wasteful government spending and hand it back as a tax cut. Net inflationary effect = 0.
February 11th, 2007 at 10:26 pm
The RB Governor is independent.
He would probably increase the cash rate, if government cut taxes in anyway but phased year by year.
I personally support ways to reduce inflationary pressure without so much reliance on the cash rate.
Thos includes a capital gains tax on non residential property (foreign owned and rental).
February 11th, 2007 at 10:35 pm
Two more radical ways would be
1. dirty float at 80 cents Oz (reducing the link between our attractive interest rates and the dollar)
2. replace a portion of the cash rate with a fee on all loans (this reduces the interest offered on deposits – which can be compensated for by only taxing interest once the CPI rate was deducted).
February 12th, 2007 at 12:32 am
A dirty float? Sounds like a labour party item in the Hero Parade. A fee on all loans? As I exaplined to my brother in law, basic economics:
A levy on fixed rate mortgages would increase the cost of money and therefore force some marginal owners to sell, thus increasing the supply of houses and shifting the supply curve to the right.
Higher interests costs would also restrict people’s borrowing capacity, thus reducing demand for houses.
More houses, cheaper + less demand = housing crash = upside down mortgages = foreclosing borrowers = national financial meltdown.
Cullen surely wouldn’t be THAT stupid….but then, didn’t Theresa say the same thing 9 months ago about local loop unbundling?
I note we’re all paying for that government decision now.
February 12th, 2007 at 9:40 pm
A dirty float or float indexed to another’s currency, is not unknown. Most choose the USA’s dollar, but that is too risky for us (given what happened to Argentina’s exports).
Your confusing what I posted and what Cullen proposed is inexplicable. Try again.