Scope for further tax cuts say economists
Economists say there are options for National to offer further tax cuts, as a way to help people through the tough times ahead but also to help boost economic growth. The SST reports:
Deutsche Bank chief economist Darren Gibbs said a future National government could accelerate – as well as improve – tax thresholds and tax relief ahead of the April 2010 date set in the Budget.
“Just as Labour has a May 2008 Budget tax package kicking in in October, so could a National government in a May 2009 Budget bring forward the next round of tax relief to October next year,” he said.
It was unlikely there would be cuts in front-line spending (fewer doctors, teachers and so on) to pay for that.
But he said National could pay for more capital spending through public- private partnerships where private money, not public, built infrastructure such as roads that would be tolled.
Plus National has also announced before the budget that it has not signed up to around $2 billion (over four years) of Labour’s spending plans.
The Hive has some suggestions for other areas. They also say they would like to see the trains but who on Earth would be stupid enough to pay $1.5 billion for them?
May 25th, 2008 at 10:57 am
Great to hear that National will slash $750 mill of the health funding for next year.
And how much for schools operational grants will they cut back to save more money for tax cuts for the rich.
Since John Key says he likes the tax cuts but not the ‘structure’. This is code for rich pricks arent getting enough
[DPF: Sadly for you National isn't as stupid as you]
[GWW] Cant find any reference to the detail of nationals cuts to $2.5 bill. But there is a mention of a block of cheese, which is about the level of intellectual capacity we have come to expect
May 25th, 2008 at 10:59 am
The average NZ citizens abject compliance with ever increasing taxation, and their common reaction to plans to cut taxes with mindless inanities like “where will the money come from?” is an interesting study in mass insanity. Whilst citizens bitch and moan endlessly about rises in the cost of living- fuel prices, food prices, electricity prices, etc, apparently the cost of government is not due the same concern. Cullen can charge each NZ taxpayer as much as he wants to run the country, and they’ll keep on paying. Gladly it would seem.
So why should those who provide us with power and food and fuel and the rest of it pay any heed to cries of poverty. Apparently, consumers are ready to pay enormous amounts to be governed. Happy to have their money spent for them on all kinds of brainless socialist schemes (like buying trains at about 10 times the real value for instance). Oil companies are subjected to all kinds of scrutiny on the grounds that they’re profiteering, but Cullen and co get a free pass. Is this sane???
NZers are apparently quite happy to fund a government made up of 120 useless regulators and do-gooders when it could easily be so much smaller and less expensive. Quite content to have money doled out to backward looking tribalists making claims of historical mistreatment on often extremely tenuous grounds. Not at all bothered about hundreds of partisan quangos dishing out grants to all kinds of politically favoured organisations that in reality have little value to the community. Quite happy to fund useless government departments like the Race Relations Commission and the Dept of Woman’s Affairs.
Whilst NZers are so content to pay such huge amounts of their income to underpin a government that is mostly inefficient, interfering and bungling, top heavy and profligate, how can they claim to be in any kind of poverty, and how can they complain about the rising cost of living? Until NZer workers start asking for tax cuts, I mean really asking, and for real tax cuts, not the sleight of hand that Cullen and co are getting away with, nobody can ever take complaints about the cost of real necessities seriously.
May 25th, 2008 at 11:08 am
RB the trains are leased , the taxpayer bought the business. Any any future costs will be carried by the business just as the costs of a new wind farm arent ‘paid for by the taxpayer’. Dont forget we got the tracks, including the land for $1 a few years back.
May 25th, 2008 at 11:16 am
Dont forget we got the tracks, including the land for $1 a few years back.
And about 25millon in debt and spending we were required to make
May 25th, 2008 at 11:38 am
Take the price of fuel as an example. Say its two dollars a litre. The profit to the oil companies from that $2 is extremely small. Maybe 4 to 10 cents depending on the source of the raw product. Tax accounts for about $1 of the direct at the pump price (much more in actuality). While your hosing petrol into your tank, the government rakes off more than ten times the profit of the oil companies, but all the complaints are focused on the companies. Is this sane??
Then the money so taken by the government is squandered on dopey non workable impractical extravagant socialist initiatives, and NZers don’t complain about this. They want an enquiry into the prices charged for petrol but they squeal like stuck pigs when there are suggestions to cut taxes. The government is apparently to be kept immune from the type of scrutiny that is applied to oil companies. Is this sane???
Why can’t NZers see that it is excessive taxation that is causing the strain on their budgets. Taxation that is used to fund an enormous monolithic government structure that is at the very least 75% unnecessary. The recent rises in the cost of living (and its only just starting) are all mostly down to the cost of government.
Whilst citizens are happy to fork out huge amounts of their weekly income to sustain this derelict ruinous monster, this millstone around their necks, they cannot complain about the real cost of living.
They brought this circumstances upon themselves through unwise and shortsighted use of their vote, through listening to the words of necromancers and illusionists, and they are apparently determined to continue to anchor themselves to this costly burdensome deceitful self serving entity, and to continue to pay for it. So let them pay for it, and let them suffer the cost of living rises that are coming as a result of their foolishness. Apparently real poverty is the only thing that will make them see sense.
May 25th, 2008 at 11:41 am
GWW
You are truly something. Where the hell do you get this stuff from? It would be comedy genius if it was not for the fact that you actually believe your own little lies. They bought the rolling stock, or rather the use of the rolling stock. Toll keeps the profitable freight side. And this constant harping on about a 25 mil a year nonsense.Geez. Toll sold the rolling stock operation because it drains money from the freight forwarding business. They also sold it for nearly double what it was worth and then hung some of their debt onto it as well. The total cost will escalate to nearly 1.5 billion. Now I realize that as a labour spin doctor you would find this tough (your boss did and you are not going to suggest that you are smarter than the good doctor are you? I mean he walked face first into the worst deal in history) But say that the business does run a profit of $25 mil a year. Then without taking inflation, interest, future expenditure or change in technology into account, it will take 60 plus years to recover the original costs, include just inflation and you have 140 years, repay interest lost and paid and you are talking 500 years, That would only recoup something that is worth half as much as you paid for it.
Great buy. And people wonder why this country is now facing one of the bleakest economic periods in the last 60 years? Step up the good Doctor.
May 25th, 2008 at 12:01 pm
Bok,
Your words hit the nail on the head though I must say it’s a waste of time trying to explain to fans of the Toll deal why it’s a dud. It is very troubling to me that such an inept Government as this bunch of turkeys were suckered into such a dumbarse deal as this one.
Cullen’s overhaul strategy at the moment seems to be “I don’t know what I’m doing with the economy so I’m going to leave totally stuffed so the other guys will have trouble repairing the damage”. This fools serious fiscal inadequacies have been masked because the economy was booming and he could get away with it. Now the economy needs a specialist to carefully manage the countries finances he’s up the creek without a paddle.
May 25th, 2008 at 12:10 pm
>They also say they would like to see the trains but who on Earth would be stupid enough to pay $1.5 billion for them?
I’m starting to think there might be positive opportunities in this deal. I’ve commented before about how NZ can’t afford a proper road system and a proper rail system and ends up with half-baked versions of each. And about how the only way to stop future Labour governments from blowing billions of dollars on rail is to rip up the tracks, apart from those needed to support commuter rail in Auckland and Wellington. So…
What is the value of the real estate currently covered in tracks? I’d be guessing it is more than the six or seven hundred million bucks we’ve just spent. The Wellington rail yards are about the size of the commercial CBD, for goodness sake! Rip up the tracks, wider and improve roads where possible due to the rail right-of-way running alongside roads, then sell the rest for housing, office blocks, or to expand farms.
May 25th, 2008 at 12:10 pm
The main point of the SST article is that tax cuts can be as large as National wants, because they can always just borrow money to pay for them.
Funny that that point didn’t make it into your summary…
May 25th, 2008 at 12:23 pm
Experience in NSW with tolled roads generally shows that motorists will avoid them, simply to avoid paying a toll. Then, the PPP loses money and its private backers demand the government pay them an annual subsidy in lieu in toll revenue.
All that is really generated then, is a great big white elephant, that no-one will use.
May 25th, 2008 at 12:37 pm
“All that is really generated then, is a great big white elephant, that no-one will use.”
Actually the infrastructure created in NSW is worthwhile and WILL be used for decades ahead. The big problem there is pricing and availability of alternatives. This does not go hand in hand with all PPPs.
“The main point of the SST article is that tax cuts can be as large as National wants, because they can always just borrow money to pay for them.”
In reality Labour is funding its tax cuts with borrowing. They might say on the loan application that it is for ‘infrastructure’, but without the other huge spending increases they wouldnt need to borrow at all.
May 25th, 2008 at 1:52 pm
Personally i have no problem with the country borrowing money to assist the economy and its people through the hard times. Actually I have no problem with borrowing to invest into the country and its people in the good times.
Every person on this blog borrows in one form or another. They borrow against their futures in education, own credit cards, mortgages, and overdrafts. They borrow to buy whiteware, cars, and electrical goods. The whole of our culture and economy is based on borrowing. In fact kiwis are suckers for it, they pay incredible interest rates compared to some nations. Guess what, the illusiory feel-good factor you get when you ‘own your own house’ or ‘buy a new car’ or ‘upgrade your television’ – all achieved by borrowing. Shit, people even pay through the nose for fast food rather than waddle off to the fruit and veg shop for goods to cook – they ‘borrow’ time itself.
And then guess what not one person who does this, worries about the homeless, the starving or the state of the economy, health or education systems while they drive off with the new flat-screen TV. They still sit at their expensive computers, achieved by borrowing at stupid rates from overseas lenders, to finance the overseas economy that made the computer, and pontificate about how much they care, and how they are going to ‘Vote Green’.
So I say, if you are so opposed to borrowing and how it disadvantages the poor, drive around the locality and look at the satellite dishes, look at the 4WDs in the driveways, look at the KFC and Mac-litter in the streets, and then come back to your expensive computer, and tell me all about the ‘evils’ of borrowing.
As an aside, I would alos like to add that not one red-cent of the money Cullen has spent in the past nine years was his.
It was all borrowed.
From you and I.
To quote Morrissey – “In the midst of life, we are in debt, etcetera…”
May 25th, 2008 at 3:04 pm
Testing image tags
May 25th, 2008 at 3:21 pm
DPF:
Is that Obama saying “I look FORWARD to my tax cut under a National-led government”?
May 25th, 2008 at 3:35 pm
This is not the place to discuss the rail buyback. But some are still in the dark.
There is no ‘frieght’ business. TollNZ has a rail and truck business. The government bought the rail business for the agree price . Any business has to spend money in new equipmentnt etc over the next 5 years.
THis is NEVER included in any sale price. eg Auckland Airport had a bid to buy 40%. They will be building a new runway in the next 5 years. The bidders dont have to add 40% of the cost of a a new runway to the price they paid ?. Its paid for out of profits and or new borrowing.
The rail business will need new rolling stock. The current rolling stock is leased. New trains will be much the same process, in fact you can get a pay by the hour arrangement where the manufacturer of locomotives will maintain their engines as well. Again no direct cost for the taxpayers as it will be paid for out of the profitable freight business.
The tracks are one feature that will require more investment than will be generated by the income so will require capital injection from the taxpayer, but strangely national ‘supports’ the government owning the tracks business so presumably they have no problem with this.
May 25th, 2008 at 4:07 pm
David
Thanks for that. This is the image I tried to publish here a few days ago but the image tag just kept getting swallowed.
In any case -isn’t it great? I’ve been well aware of the messianic nature of the Obama phenomena – but this takes the cake for socialist realism artwork – it’s the 1940′s all over again.
A poster like this really does put some perspective on the argument that there is little difference between Key’s National party here and an Obama administration!!
Mind you – photoshop Key’s face on to this, put it up in a corner of Kiwiblog – and it would suddenly be even more grist to the mill that this place is resident to “the far right”.
May 25th, 2008 at 7:38 pm
David – why have you posted a picture of Freddie Mercury on this thread?