A good Labor budget

May 14th, 2008 at 7:29 am by David Farrar

Oh I so envy for its luck in having a more moderate less extreme and idelogical Labor Party. Let us look at what Wayne Swan has delivered. Australia’s population is around five times New Zealand so generally divide by five to get an idea of what it would be for a country our size:

  • of $47 billion
  • No tax on the 1st $14,000 of income – rising to the 1st $20,000
  • A of  $22 billion which is the largest for a decade but get this only around half what Cullen’s level of has been per capita.
  • A move to means testing for welfare rather than universal entitlement for the “baby bonus”
  • $33 billion (equal to around $6 billion in a NZ sized country) of savings from cutting wasteful or low quality spending
  • $4.7 billion on a national broadband network

Lowering taxes, cutting wasteful spending and targeting welfare at those most in need instead of the rich is not some mad right wing agenda. It is normal day to day prudent management by any Government right or left.

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48 Responses to “A good Labor budget”

  1. clintheine (1,568 comments) says:

    Mate, that budget is even something National wouldn’t touch.

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  2. East Wellington Superhero (1,151 comments) says:

    Advance Australia Fair and God Defend New Zealand from NZ Labour!!!

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  3. Pascal (2,015 comments) says:

    That sounds very sensible. I like the basic principles of what they are doing, targeting their welfare at those who need it and providing tax relief across the board. Nice.

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  4. mawgxxxxiv (554 comments) says:

    David: With this kind of thinking in Australia it’s looking like the forecast 100,000 kiwis bailing per annum prediction may well come true: http://www.interest.co.nz/ratesblog/index.php/2008/03/14/chart-net-migration-to-australia/

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  5. Murray (8,841 comments) says:

    The Asutralian labour party haven’t delivered dick. They’ve delivered the legacy of a long Howard government.

    Key is going to deliver dick because Cullen is busy pissing it all way on toy trains and beefing up the number of labour party hacks in the public service.

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  6. scrubone (3,081 comments) says:

    Just had a beauty of a quote on National Radio. Something along the lines of “We are not going to run a surplus for it’s own sake. We will give this money back to those who’s it is.”

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  7. virtualmark (1,513 comments) says:

    Just goes to show how much more the “centre” in New Zealand is to the left of the “centre” in Australia …

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  8. Redbaiter (13,197 comments) says:

    Could the Nats ever move far enough to the right to emulate Labor Australia??

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  9. big bruv (13,548 comments) says:

    When I look at the detail of this budget two things strike me, the first as correctly pointed out by Clint is that John Key does not have the balls to do anything like this, the second is that main stream NZ would not let him.

    I am not sure what is more disappointing, the fact that Key is not brave enough or the fact that we are now such a nation of bludgers who cannot conceive a life without hand outs from government.

    Either way we are fucked!

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  10. Bevan (3,965 comments) says:

    June can’t come soon enough!

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  11. Manolo (13,514 comments) says:

    RB asked: “Could the Nats ever move far enough to the right to emulate Labor Australia?”

    Unfortunately the Nats are spineless and lack conviction. A National Party government would tinker around the fringes, but wouldn’t dare to tackle issues such as the radical reform of the welfare state, changes to Cullen’s abominable tax regime, withdrawing from Kyoto, etc.

    In a nutshell, the answer is no.

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  12. getstaffed (9,189 comments) says:

    It is normal day to day prudent management by any Government …

    … which is why we’ve seen nothing like it. The NZ Labour government is a prudence free zone

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  13. NZD.JPY (130 comments) says:

    Well I’m sure that some Nat policy makers read blogs like this to get a gauge on public opinion so here’s mine even though it’s only worth one vote.
    Harden up. Don’t campaign to win the election. Campaign on principles and see if NZ deserves you.
    If they don’t then move to Aus and enjoy a prosperous life in the sun like the rest of NZ’s productive sector.

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  14. aardvark (417 comments) says:

    I’ve long advocated the introduction of a minimum tax-free threshold (did it in my blog again today) but I’m wondering whether the whole concept of taxing your income is past its best-by date.

    What’s wrong with ditching personal income tax (along with the massive cost of the state bureaucracy it requires and the onerous compliance costs on employers) in favour of hiking GST and therefore moving to a consumption tax system?

    This would mean that nobody paid any tax until they actually spent their money.

    Surely such a move would accomplish exactly what Cullen’s KiwiSaver is supposed to do (but without the risk) by encouraging people to save rather than waste cash on expensive imports like big-screen HD TVs and other such fluff.

    The amount of money that would then be available for investment in productive enterprises (especially export-earning ones or those needed to create a knowledge-based economy) would rise significantly. The reduction in bureaucracy and compliance costs would also mean that the net tax-take could be less without compromising the real essential services.

    Or another option is the social-wage.

    Pay everyone a nominal amount (say $15K per year) regardless of their income and tax every dollar earned at a single flat rate sufficient to finance the essential infrastructure.

    This would allow WINZ to be dismantled (since everyone would effectively be getting a benefit anyway) but, because that stipend would not be abated, people would also be encouraged to work because they would also be earning additional income in doing so.

    Again, the complexities of the tax and welfare systems could be pared down to a minimum and the resulting savings passed on by way of a reduced overall tax-burden.

    My point is that our politicians refuse to think outside the box. They are so stuck in the 20th century that they refuse to consider other options as even being remotely viable.

    Don’t we deserve better than this?

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  15. Redbaiter (13,197 comments) says:

    “John Key does not have the balls to do anything like this, the second is that main stream NZ would not let him.”

    ..right and this is all down to the Nats failing to articulate an argument that challenges socialism. They practically never say one thing against socialism. ..and why is that? I dunno really, but I’d guess because many of them just cannot think outside the socialist square, and those that can are intimidated into silence by the view that any word spoken against socialism is a bad word. The Nats need new people. They don’t need the people who are backing John Key.

    Most of the people I know who went to Australia were prompted to do so by the failure of the Brash strategy. It was apparent when Brash was defeated that there was little resistance remaining within the Nats to the forces of socialism, and this has been shown well enough since Key has been leader. People therefore decided that NZ was too far gone and packed up and left. National needed those people, but the Brash failure meant that need was not going to be met.

    Unless the Nats get anti-socialist arguments out into the mainstream, and successfully defend those arguments, there will be no change. The Nats need to take on the leftist strongholds of the media, the education system and the bureaucracy. To confront them strongly and to meet the weakly based socialist propaganda that underpins the existence of these strongholds with firm, brave and rational argument. Are there people in the Nats who can do this? Right now, I don’t think so.

    (..and going by the reticence of the newcomers profiled on Kiwiblog in speaking out against socialism, I don’t think there’s much hope for the near future either. NZ is fucked for two or three generations. The gutlessness and ineffectiveness of the National Party is the main reason for this.)

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  16. Rocket Boy (163 comments) says:

    Of course the $47 billion is over 4 years, and the actual average tax cut is about $20 per week.

    $12 billion in cuts per year divided by 5 is $2.4 billion or probably in line with what National would offer but a little less that the $1.5 billion Cullen has talked about.

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  17. Linda Reid (407 comments) says:

    aardvark – I love your thinking. It has long been my goal to see the whole tax system completely re-organised. I like the idea if getting rid of income tax and upping GST. No FBT, no need to file a tax return, no tax avoidance (or evasion) and house prices will be driven by genuine need, not as a tax-reducing ploy. Young people who want to save a deposit will be able to – simple to administer.

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  18. Simon (710 comments) says:

    What clint and redbaiter said.

    The center right in Oz have set the agenda which drags Labor across.

    About fucking time the nats set the agenda in NZ. Fat chance. Too scared of what Helen will say.

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  19. Simon (710 comments) says:

    Redbaiter nats don’t have the guts to take on Labour’s welfare-industrial complex.

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  20. getstaffed (9,189 comments) says:

    good stuff aardvark. we need freshing thinking like this.

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  21. Brian Richard Allen (2 comments) says:

    Mobbed-up unionist, Swan’s, socialist budget cynically increases the incentive of that sizable percentage of the Australian electorate that earns up to NZD470.00 per week to protect its tax-free status by forever voting Labour.

    Given that taxation in its every form is theft and would be called so if any non governmental gang employed the same force (that is, the point of a gun) to “collect” it as does government, the only way to ensure that everyone is treated equally is via the introduction of a flat tax — on every Cent of every individual’s income.

    That way, if I earn ten times more than you I will pay ten times more tax.

    Too simple, Kiwis?

    Brian Richard Allen

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  22. roger nome (4,067 comments) says:

    Yes I too envy Australia with its lower wealth inequality, and high levels of collective bargaining coverage (60% of the workforce is covered by a union-negotiated employment contract – the figure in NZ is about 20%).

    Yes, that Australian Labour Party sure is sooo much more right-wing than ours.

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  23. roger nome (4,067 comments) says:

    “cutting wasteful spending”

    So how’s the National Party’s waste-watch site going? Oh that’s right they couldn’t find any waste in Government spending so it’s been non-operational for the last, god knows how long.

    http://wastewatch.co.nz/

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  24. big bruv (13,548 comments) says:

    Woger

    “Yes I too envy Australia with its lower wealth inequality”

    All achieved under a right wing government, will you now concede that your corrupt party has done nothing for the working man in NZ and that the best thing that could happen to NZ is for them to be soundly thrashed at the next election?

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  25. roger nome (4,067 comments) says:

    “All achieved under a right wing government”

    That just shows how right-wing the 1990s National crew actually was. Proportion of population with net-of-housing-cost household incomes below the 50% threshold shot up from 5% to 17% between 1990 and 1994. Sure under National it came back down a little to 14% – but they’re the ones that caused the massive increase in inequality in the first place, and Labour continues to reduce it (in 2004 it was down to 12%). I agree that Labour should have done more to reduce income inequality though – especially where households with children are concerned (though WFF has gone a long way toward reducing child poverty in NZ).

    (page 60)

    http://www.socialreport.msd.govt.nz/economic-standard-living/index.html

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  26. big bruv (13,548 comments) says:

    Woger

    What a lot of crap, WFF is not reducing income inequity at all, it is simply stealing money from those who are already feeling the pressure to give (bribe) others who have no bloody sense of personal responsibility.
    Like most pinko’s you just cannot grasp the fact that under Howard Aussie went ahead while we under Clark have been left behind.

    Labour have butchered the best economic climate in living memory, where as Howard managed it fantastically, the results are now evident for all to see.

    Edit: What do you mean “gone a long way to reducing child poverty in NZ”?
    According to your corrupt leader there is no such thing as an underclass in New Zealand.

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  27. NX (603 comments) says:

    under Howard Aussie went ahead while we under Clark have been left behind.

    Goodness, has Roger pretty much conceded the point above..?

    Roger has joined the club.

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  28. side show bob (3,660 comments) says:

    Linda Reid, such blasphemy please say 3 Hail Marys and an Our Father you heathen. To think one would want to change our tax system, think of the poor accountants, lawyers, bank managers or the power grazy politicians. My God woman you speak of treason. The abiltiy to set taxes goes to the very foundation of power. The criminals in charge of this little backwater would actually have to lead the people instead of using coercion.

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  29. aardvark (417 comments) says:

    aardvark – I love your thinking. It has long been my goal to see the whole tax system completely re-organised

    If you think my ideas on tax reform are radical, check out my Recoverable Proxy idea for electoral and parliamentary reform. That’s something which I’m sure our politicians will *never* go for because it strikes at the very heart of the current serial autocrisy system.

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  30. Bogusnews (454 comments) says:

    The problem National faces is that Labour has been extraordinarily effective in keeping all debate within the confines of what labour finds comfortable. The most classic example was the EB’s. To the eternal shame of the media, they would not investigate the odd views of the Greens and how that would impact NZ’ers, instead they took their cue from on high and played the man rather than the ball.

    John Key must have seen how too many of Brashes supporters happily stood by while he was crucified and I suspect doesn’t want the same to happen to him. At least I hope that is the reason, and it probably is, when you see the way they were vilified when they tried to sort out doctors charging and how generally positive the media were (initially) of the ridiculous railway purchase.

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  31. Linda Reid (407 comments) says:

    yeah, Bob, I know. My son-in-law is a tax accountant. He’d have to find something more useful to do. But he’s a very bright lad, I’m sure he will.

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  32. NX (603 comments) says:

    Bogusnews wrote:

    John Key must have seen how too many of Brashes supporters happily stood by while he was crucified and I suspect doesn’t want the same to happen to him.

    Agreed. It’s amazing Brash got within a Mangere bus load of Helen Clark in the 2005 election given the way the media crucified him. In many respect Brash was politically very moderate with a few principled positions on the economy. Yet the way the media cast him as some far right-winger was totally at odds with his history. Brash after all was approached by David Lange, the hero of the left, to stand for Labour.

    So yeah, Key has learned to play the medias game, which is why he’s so popular. And why you don’t get too many of Guyon type stories where someone in the National Party doesn’t believe in Climate change, shock horror.

    It’s a shame really. Because the end result is you don’t get a sensible discussion on issues. I for one miss the days when Dr Brash use to take a firm, well-reasoned stand on an issue, but I certainly don’t miss the crucification he got with it.

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  33. mawgxxxxiv (554 comments) says:

    No waste in the public service ? Here is some :

    “Environmentally conscious Web Writer wanted

    We are seeking an energetic Web Writer to join our enthusiastic and motivated team. We have developed an exciting website (www.sustainability.govt.nz) for a high-profile sustainability project that we want to take to the next level of interactivity and usefulness.”

    http://www.jobs.govt.nz/vacancies/viewjob.aspx?opportunityid=45241

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  34. Patrick Starr (3,675 comments) says:

    Roger, you keep banging on about Aussies lower wealth inequity but you don’t answer any question that attempts to look at it closer.

    NZ data is gained through Stats NZ “SoFIE”, a 10,000 household sampling over 8 years of which I’m one.
    Whereas I understand the Aussie data is gathered direct from the Federal tax revenue. Do you know if the aust data source is correct?

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  35. roger nome (4,067 comments) says:

    “Aussie went ahead while we under Clark have been left behind”

    Actually since 1999 NZ has enjoyed a higher rate of economic growth than Australia. You’re argument’s totally spurious.

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  36. Rex Widerstrom (5,327 comments) says:

    Murray says:

    The Asutralian labour party haven’t delivered dick. They’ve delivered the legacy of a long Howard government.

    I’m no fan of Rudd (and what little respect I was prepared to accord him has almost vanished thanks to his arrogant treatment of the press) but that’s a little harsh, Murray.

    One thing Swan seems to be doing right is going after wasteful government spending (though not, of course, attacking Labor’s Shibboleths) of which there is plenty and moving to stop the ridiculous levels of middle class welfare Howard brought in purely to win votes. So far the main target has been the “baby bonus” but there are other examples which it’s to be hoped will be addressed in future.

    Howard has indeed left a good legacy but it has been sullied – particularly over the last few years – with some fairly gratuitous vote-buying at the expense of infrastructure investment.

    Having said that, apart from tidying up the few spills John Howard left in what is otherwise a tidy kitchen, I don’t see anything like an exciting recipe for the future. Still, they’re out of practice, so I’ll withhold final judgment a little longer…

    Aardvark: Recoverable Proxies are a great idea and one I’d love to see debated when / if NZ actually sits down to examine its electoral and parliamentary systems rather than accepting MMP’s many flaws as though they are writ in stone. Alas I think the idea is too obtuse – as opposed to, say, the EFA – so it’s awfully hard to imagine a “Let’s Re-examine Our Democracy” campaign taking off. But if some people want to start one, I’m in.

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  37. Murray (8,841 comments) says:

    I don’t do wishy washy Rex.

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  38. MrHappy (70 comments) says:

    No you don’t, Murray. It seems your specialty is ranted hyperbole. :)

    MrHappy

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  39. Murray (8,841 comments) says:

    You don’t to sign it Capt Obvious, its at the top.

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  40. getstaffed (9,189 comments) says:

    Actually since 1999 NZ has enjoyed a higher rate of economic growth than Australia.

    RAOTFLOL. Actually bollocks… more lies from nome. The NZ economy is a train wreck under the guidance of our spiteful socialist dictators. ‘Growth’ has been seen in our bloated bureaucracy which has helped keep ‘unemployment’ artificially low, while the productive sectors weakened.

    Cue some irrelevant analysis link or Wikipedia reference as ‘rebuttal’. Yawn.

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  41. sonic (2,818 comments) says:

    ” don’t do wishy washy Rex”

    Except when challenged of course, then he cries like a weepy little girlie.

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  42. mawgxxxxiv (554 comments) says:

    getstaffed: the OECD numbers seem to support your claim that NZ has been falling behind Australia in GDP per capita: http://www.interest.co.nz/ratesblog/index.php/2008/01/05/chart-gdp-per-capita-in-us/

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  43. OECD rank 22 kiwi (2,820 comments) says:

    I love the smell of Tax Cuts in the morning. Smells like… victory.

    Australian Labor has just confirmed tax cuts in its budget. In the UK the Labour Party has had to humiliatingly offer more tax cuts in the form of an increase tax free allowance to a rebellious public. Soon it will be the NZ Labour Party’s turn. Mickey C is going to be holding back the sick in his mouth as he stands up in Parliament and offers tax cuts he doesn’t believe in to a disbelieving New Zealand public. John Key will then offer something slightly better and cruise to election victory in November.

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  44. roger nome (4,067 comments) says:

    getstaffed:

    Average GDP growth since 1999 has been 3.5% in NZ and 3.2% in Australia.

    See the second table.

    http://www.rbnz.govt/keygraphs/graphdata.xls

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  45. roger nome (4,067 comments) says:

    getstaffed:

    Average GDP growth since 1999 has been 3.5% in NZ and 3.2% in Australia.

    See the second table.

    http://www.rbnz.govt.nz/keygraphs/graphdata.xls

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  46. Murray (8,841 comments) says:

    Fuck off you whiny assed manky scots git.

    Why don’t you go head to head with Wahleoil again so we watch you sqeal while you run away like a little bitch.

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  47. jamesmnz (2 comments) says:

    aardvark & Linda Reid:

    The issue with a consumption tax (e.g. GST) is that it is regressive- those people that can least afford it end up paying a higher proportion of their income to tax

    example- if the GST was, say 25%

    income = 100K, spend 20K on consumption (16K + 4K to tax) = 4/100 = 4% of your income goes to govt.
    income = 25K, spend 10K on consumption (8K + 2K to tax) = 2/25 = 8% of your income to govt.

    Basically, the higher your income, the less you proportionally spend on consumption (you can afford to save more), so the poorer get taxed proportionally more

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  48. roger nome (4,067 comments) says:

    Wee muzza sure does know how to throw a good tantrum doesn’t he? Must say though, it’s not pretty watching a grown man squeal and flail like that.

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