Brown to respond with tax cuts

November 24th, 2008 at 10:31 am by David Farrar

I’ve said time and time again that NZ was almost alone in the world with its hostility to personal . We only got them after nine years of massive surpluses and massive spending increases, and Dr Cullen admitted that he would have made them smaller (if at all) if he had known about the extent of the credit crisis.

Even under Phil Goff, NZ Labour are geared up to attack National’s tax cuts.

So bearing that in mind, let us look at what PM Gordon Brown is looking to announce tomorrow:

has defended as “necessary and responsible” the massive package of tax cuts expected in tomorrow’s Pre-Budget Report.

Yes, UK Labour delivering a massive package of tax cuts.

Australian Labour also doing the same.

NZ Labour though are regretting their tax cuts and are opposing any further tax cuts.

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45 Responses to “Brown to respond with tax cuts”

  1. big bruv (13,934 comments) says:

    DPF

    Did you not take any notice of what Kullen said over the last nine years?

    It is NOT your money in the first place, you should be happy that he let you keep as much as he did.

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  2. dime (9,980 comments) says:

    this just shows how FAR LEFT NZ Labour is.

    kiwi leftists display more jealousy than other wsteren lefties.. i guess it ties in with NZ’s tall poppy personality.

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  3. burt (8,275 comments) says:

    An $8b surplus and no tax cuts – wot’s the cunnection – there is none….

    Cullen is a complete Muppet – it’s great to see his filthy self serving hands taken off the purse strings.

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  4. gd (2,286 comments) says:

    the new government must bring the tax cuts forward if it is to head off the looming economic collapse.

    the next round should be 1st February 2009 with another round 1 September 2009 and then again 1st February 2010.

    Wage and salary earners need cash in their pockets to restore their confidence and be encouraged to go out and spend

    Remember Its made round to go round and when it stops going around we are all in the shit

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  5. jacob van hartog (300 comments) says:

    What was working for families then if not tax cuts
    If you read the story it doesnt seem like Brown is talking income tax cuts, there seems to be cuts to VAT and measures for the low income , which sounds like Wf F

    [DPF: WFF is a form of welfare. Tax cuts are when you pay less tax up front]

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  6. PhilBest (5,125 comments) says:

    Jacob Van Hartog, what WFF did, was made every person in NZ with kids, who was on between 40 grand and 100 grand, more dependant on the State for their income at the margins, than on their job. Pay rise, pay cut, promotion, demotion, more hours, less hours – hardly mattered.

    THAT my friend, is socialism, not tax cuts.

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  7. PhilBest (5,125 comments) says:

    One of the realities now, is that getting out of an economic collapse can’t be done any OTHER way, than tax cuts and reduction in government spending.

    The reduction in government spending will come anyway, like it or not, when the government runs out of both taxation revenue and sources of loan finance.

    FDR and the Dems and many other governments did exactly the wrong thing in the 1930’s. The “New Deal”, and increased government spending, turned a financial crash into a Great Depression. It seems that even the likes of Gordon Brown and Kevin Rudd are awake to these realities.

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  8. dime (9,980 comments) says:

    philbest – i dont know a lot about the “New Deal”, can you point me in the right direction so i can read about it? any good links?

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  9. clintheine (1,571 comments) says:

    Gordon Brown is not only talking about British tax cuts, he talked about the absolute need for WORLDWIDE tax cuts the other week to save the worlds economies.

    NZ’s Labour is not just a little behind the world – it’s behind even the ex Communist nations of the world. Some countries people protest about raising taxes and yet Kiwis just blink and absorb it without a whimper… and then vote in polls saying they don’t mind paying more in tax to get better health/education…. sad sad sad.

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  10. jacob van hartog (300 comments) says:

    Remember too Iceland and Ireland are going down the gurgler ( 4% drop in Irelands GDP next year alone)

    They were countries that geared up just like Key was suggesting early this year as the answer to growth.

    Cullen thought different and was proven right

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  11. cha (4,036 comments) says:

    Mussolini himself praised the New Deal as following his own corporate state.

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  12. philu (13,393 comments) says:

    his tax cuts are ‘to favor families..and the less well off..’

    http://whoar.co.nz/2008/wot-gordon-brown-plans-to-do/

    phil(whoar.co.nz)

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  13. Owen McShane (1,226 comments) says:

    Brown looks a good friend. We need to choose all our friends with care.

    NASA’s Mr Hansen, much adored by the Greens everywhere, tells a half truth to his audience in Stanford:
    http://www.paloaltoonline.com/news/show_story.php?id=10155

    “Hansen advocates a “carbon tax with a 100 percent dividend,” with funds returned to households based on how much they reduce their carbon footprints. Fossil fuels should be taxed at their source—the wellhead or port of entry—to create incentives for the most efficient behavior. For example, he said, “we import food from New Zealand because there’s no tax on aviation fuel, even though it makes no sense from a planetary standpoint.”

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  14. Conor (26 comments) says:

    Brown might be cutting VAT – do you support that?

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  15. dime (9,980 comments) says:

    was hoping for something more indepth than wikipedia.. i dont trust the lefties that edit such things :P

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  16. getstaffed (9,186 comments) says:

    jacob van hartog – you’re talking shit mate. WFF is not a tax cut, it’s socilaists redistribution of increased taxation. And Iceland’s problems are nothing to do with tax, but everything to do with State and citizens living beyond their means and borrowing heavily to support that excess.

    Back on topic… I agree with dime et al: We are so far to the left that we’re asked to believe that the modus operandi of other ‘social democracies’ is stoking the bonfire of right-wing extremism.

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  17. senzafine (455 comments) says:

    Jacob:

    WFF Is income redistribution. In NZ’s case, we had the dubious pleasure of INCREASING income tax for a select group. This has since been doled out to others under the guise of ‘Tax Relief’. No one got a tax cut, and some got a tax increase.

    A Tax Cut, is where there is a CUT to the TAX a person pays. That tax could be Income tax, GST, Tobacco tax, Alcohol tax, RWT, etc, etc.

    Its pretty clear cut. It seems its only the rabid lefties that are unable to make the very clear distinction.

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  18. Lee (610 comments) says:

    dime,

    the Wikipedia entry on the New Deal is a very fair and balanced article, and takes critiques of the ND seriously.

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  19. cha (4,036 comments) says:

    The New Deal began with Herbert Hoover.

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  20. PhilBest (5,125 comments) says:

    Cha, I am not the only one who believes there are paralells between Hoover and George W. Bush.

    Neither represented free market excess.

    Both reacted in a Lefty, “big government” fashion, to a financial crisis.

    Both were succeeded by even further lefty administrations who worsened what they had already started.

    But any suggestion that “free market” policies had been tried and failed, is either a myth or a lie.

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  21. PhilBest (5,125 comments) says:

    “FDR’s Policies Prolonged Great Depression By 7 Years, UCLA Economists Calculate”

    http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx?RelNum=5409

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  22. PhilBest (5,125 comments) says:

    I just tried to post a link to “FDR’s policies prolonged Depression by 7 years, UCLA economists Calculate” and it has been swallowed up in moderation.

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  23. Owen McShane (1,226 comments) says:

    If we look back to the Great Depression, the Roosevelt administration launched a major infrastructure programme which however failed to end the Depression. The problem was that the Government also passed over thirty pieces of legislation which threatened or undermined property rights which brought private investment and lending almost to a standstill.

    So now that the campaigning is over, our own Government has to step back and and set up some mechanism for analysing the machinery of government to identify those Acts, Policies, and Regulations which will prevent entrepreneurs and their financiers from building us out of recession.

    The first “casualty” must be those local body development contributions which actually fine entrepreneurs for having the audacity to build new tourist accommodation, factories or housing.

    Robert Higgs’ famous paper “Regime Uncertainty –Why the Great Depression Lasted So Long and Why Prosperity Resumed after the War” reminds us that during this period one threat to property rights was the frequent invasion of factories and offices by union members who simply took over the property until they got their way and yet were never prosecuted for trespass. Evidently they were immune to prosecution because “their cause was just”.

    These days, we need to consider the wider impact of allowing Greenpeace and anti-GM activists to invade private property and even destroy valuable experimental plants, apparently without risk of prosecution because they too are “doing good works”.

    The Centre is preparing further written material on this topic and invites any contributions or feedback.

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  24. presspassbob (14 comments) says:

    Jacon van Hardluck. You whimper at Ireland’s 4% drop in GDP. Well let me educate you on some economic realities. Ireland has for the past 25 years, regardless of whichever government was in power, focused their policies on positioning for economic growth through enhancing productivity, and attracting inward investment. It went from the poorest EC state to the richest.

    NZ under Labour attained growth through increasing debt fuelled consumption. As a result, Ireland will still be light years better off than here even with a decline in their economy because their GDP per capita is more than double that of NZ.

    Everything is relative, and we are relatively fucked due to academic inwardly focused, myopic Labour policies that cashed in on the good times and did bugger all to make this place more competitive. Be thankful we have a government now that can see beyond the next 3 year election cycle.

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  25. reddeath26 (97 comments) says:

    @ PhilBest-
    Correct me if I am wrong, but I am seeing as an assumption ‘free market’ policies are a be all, end all solution I am quite sure there are numerous ‘developing’ and former developing nations which have found this to not be the case. For instance Japan and South Korea using quite strong elements of protectionism to develop their markets. On the more negative side would be countries which have been forced into such policies prematurely and as a result suffered.

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  26. wikiriwhis business (4,019 comments) says:

    The Heralds up for sale

    I could understand if Kiwi owned it,, we buckle really fast financially

    But a Kiwi doesn’t own it so there must be a big problem on the Horizon.

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  27. presspassbob (14 comments) says:

    Oh and one more thing, Ireland has one of the most generous benefits package for pensioners, the unemployed, and other needy types…. because, their policies led to a much greater tax take based on lower taxes in a larger economy making it affordable to assist those in need without ripping off those who created that wealth in the first place by those who promote the politics of envy.

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  28. mike12 (183 comments) says:

    This is desperate bribe to cling to power as it looks like the David Cameron is going to be the next PM.

    Sound familiar – bloody socialists are the same the world over

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  29. unaha-closp (1,165 comments) says:

    “[Irish] policies led to a much greater tax take based on lower taxes in a larger economy making it affordable to assist those in need without ripping off those who created that wealth* in the first place by those who promote the politics of envy.”

    * The German or Dutch or Austian or Finnish or Danish or Swedish taxpayers who kicked in a net 41 billion euro in subsidy over the past 40 years might dispute this.

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  30. presspassbob (14 comments) says:

    And finally, Brown, Rudd, Key and others are all correct in wishing to reduce taxes in this economic situation. For once a consumption led recovery is urgently required. This will be good for 18 to 36 months then we all need to revert to productivity led growth. Why? Because the worlds economies have finite financial resources available to them, and long term conumption stimulation will be counter productive in the end as the money will eventually run out.

    So messers Key, Obama, Brown, Rudd, Jintao, Merkel, and the rest are best focusing on ways to improve productivity.

    There endeth the economics lesson….

    So Jacob, if you want to help, get back to your job and add some value, start a business, employ people, be productive and stop expecting everyone else to sort it all out for you.

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  31. presspassbob (14 comments) says:

    Hrmmm. Unaha-closp you are mis informed me thinks. For a start Ireland joined the EEC in 1973, some 35 years ago, coincedentally the year that the century long NZ guananteed subsidy ended from the UK, which NZ failed to put to good use and squandered with sucessive Labour tax and spend governments. The two countries joined the EC at the same time.

    More politics of envy wont help you either. Ireland did receive substantial subsidies though it has been a significant contributor for the past 12 years so they are giving back too. Common Agricultural Policy (CAP) aside, the difference is they put the remaining money to good use and Irelands current economy is a testament to that.

    Its not the money that matters, its what you do with it. Look at Spain and Portugal, two economic basket cases if ever there was. Yet they are the perennial sink holes for EC cash with no apparent gain.

    Finally, the subsidies Ireland did receive were largely targetted at the failed farming sector through the CAP, 80% of that subsidy went to prop up inefficient business practices and added very little real value. Ireland achieved sucess through good planning, investment, fiscal prudence, developing a world class education system, and a business friendly environment.

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  32. Frank (320 comments) says:

    Tax cuts are simply to stave off the retail sales downturn.

    The real downturn in the economy is just around the corner. This is the real shock

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  33. PhilBest (5,125 comments) says:

    Dime at 12.33, sorry I haven’t reacted more thoroughly to that.

    Google the following, the system won’t like too many links:

    Robert HIGGS “Regime Uncertainty: Why the Great Depression Lasted So Long”

    Brian RIEDL “Why Government Spending Does Not Stimulate Economic Growth”

    Andrew WILSON “Five Myths About The Great Depression”

    John FLYNN “The Roosevelt Myth”

    Burton FOLSOM “New Deal Or Raw Deal?”

    Amity SCHLAES “The Forgotten Man” and “The Real Deal”

    Jonah GOLDBERG “The Raw Deal”

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  34. PhilBest (5,125 comments) says:

    reddeath26 (18) Vote: 1 1 Says:

    November 24th, 2008 at 2:49 pm
    @ PhilBest-
    “Correct me if I am wrong, but I am seeing as an assumption ‘free market’ policies are a be all, end all solution I am quite sure there are numerous ‘developing’ and former developing nations which have found this to not be the case. For instance Japan and South Korea using quite strong elements of protectionism to develop their markets. On the more negative side would be countries which have been forced into such policies prematurely and as a result suffered.”

    I honestly believe there are other factors responsible both for the successes of nations like Japan absent free trade policies, and the failures of some other nations with free trade policies.

    David S. Landes work “The Wealth and Poverty of Nations” is very illuminating about the role of culture, the work ethic, attitude to others success, and so on.

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  35. reddeath26 (97 comments) says:

    @PhilBest –
    Firstly thank you for recommending something for me to read, I will see about reading it when I have time.

    Secondly, as for the free trade policies, there are very few examples of nations which reached wealth through free trade. From my understand a vast majority of those which are now the richest nation used various forms of subsidies, tariffs to protect their markets until they matured.

    As for the nations that did not go so well, it has been sadly overly common for these policies to be forced upon them for the benefit of others before they were ready.

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  36. xenophon (25 comments) says:

    Andrew, your argument seems to be based on the intellectually dishonest Cullen tactic of comparing top marginal tax rates without comparing the threshold at which they operate. I suspect many taxpayers would not object to a rate of 45% over NZ$ 450,000 personal income. What pisses them off is being told by Cullen ( and presumably you ) that they are rich pricks at $60,000 per annum income and should pay 39%.

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  37. Clementine (3 comments) says:

    @ PhilBest
    I agree with you. Governments spend money, not make it. Money should be left within the community where it can be used to provide settings for making more of it. Pity we can’t curb a government’s tax take by legislation allowing it a percentage of GDP and have them concentrate on the things central government are best at, like defense and law & order, health and education. We’ve had nine years of watching the Labour govt spend on touchy feely topics until we are now too scared to even be kings in our own plastic castles and are in fear of own shadows.

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  38. wreck1080 (3,924 comments) says:

    Flat tax rate in the low 20% range would be the ultimate.

    The only problem , there would be a massive jump in unemployement caused by all the accountants, lawyers, and tax officials who lose their jobs as a result. On second thoughts, what problem?

    Key you wimp, bring on Douglas ……

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  39. Glutaemus Maximus (2,207 comments) says:

    Gordon Brown has never had a proper job. It is sickening listening to him crowing about what a Genius he is all the time.

    Like Cullen he has been found out, as being a useless twat. There is nothing in the cupboard because he has spent it on a huge bloatocracy. 800k more clip board operators with huge pension benefits in Central Government, Regional Government. Double that for Local Government. But shit do we know exactly how many lampposts we have in each street.

    And how diverse we are in the UK, and a thousand other little Hitlers we employ to just fuck us around. Disablity Act, Ageist Act, Racism Act, Fucking anything involving red tape act!

    Brown is a Cycloptic, Dour, Snarky, Bi-Sexual, Pervert! At the first formal meeting of New Labour in power in 1997. The standing joke straightway afterwards was that the only person in the New Labour Cabinet that didn’t have a boyfriend was Claire Short.

    Yes, Tony Blair also likes his goods delivered to the tradesman’s entrance!

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  40. Glutaemus Maximus (2,207 comments) says:

    From the Guardian:

    380,000 Brits left last year severely pissed out with Gormless Gordon. The Mr Bean of the Political World.

    NZ could import as many wealthy Brits as they want. Think what it would do to the fortunes of the Banks here, the shops, dealerships, and housing developments!

    Helen Clark cut it back to one person last Year. Only because she was a fucking Genius like Brown!

    Soak the rich and they leave
    Posted By: Iain Martin at Nov 24, 2008 at 01:07:29 [General]
    Posted in: Politics , Three Line Whip
    Tags:45p tax, Conservatives, Gordon Brown, Labour, PbR

    There isn’t much left of the original Brownite economic model. For a decade the language of prudence and alleged responsibility was used as covering fire for stealth tax rises and redistribution. The top-line rates of tax, even if he fiddled individual allowances to take much more, were to stay the same or even come down in terms of the standard rate.

    This formula was Gordon Brown’s answer to the failure of his mentor, John Smith, to sell the idea of higher taxes to aspirational English voters.

    But the Brown approach is pretty much shot to hell now with prudence abandoned years ago and redistribution and high spending having left the country borrowed to the hilt.

    Now, it appears that Gordon Brown is going to really go for broke with his government’s PBR tomorrow. It is being reported, by the BBC initially, that a 45p tax rate looms for those earning in excess of £150K.

    Forging a pact with many of the wealthy was New Labour’s greatest trick, ensuring that it was left alone to get on with its work unimpeded because it didn’t touch the 40p tax rate and offered new advantages to those working in the City or business but residing off-shore. That friendship ends tomorrow if these reports are correct.

    It is not difficult to work out the politics of this: the Labour left will love it, and the PM’s calculation is that after the carnage the banks have helped engineer so will many centrist voters who would previously have thought it sounded dangerously anti-enterprise. The suggested delay in implementation until after an election shows Brown will fight that contest painting the Tories as the party of the heartless rich. Vote Labour to increase taxes on the rich; what would the Tories do? You get the drift.

    A difficult challenge for the Conservatives this but one they cannot duck: they have to calmly say that taxing the wealthy excessively will drive away many of those who can help engineer a recovery.

    But let’s separate this from the politics for a moment and try to think of the national interest.

    As Fraser points out at Coffee House, 1% of taxpayers pay 23% of all income tax collected. And top rates of tax have been coming down elsewhere, making the 1988 Lawson budget which brought Britain’s down to 40% clearly ahead of the curve.

    Britain is going to need all the wealthy, entrepreneurial types we can find in the next decade to stay, prosper and pay a decent amount of tax. We know, from experience in the 1960s and 1970s, that if they are targeted for punitive taxation they vanish in large numbers. Soak the rich and they leave.

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  41. Glutaemus Maximus (2,207 comments) says:

    Oh and am old enough to remember when VAT on Goods was 8% and 12.5% depending upon the type of Goods or Service.

    So how good of Labour to bring it down to 15% across the Board!

    Bastards!

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  42. gd (2,286 comments) says:

    Gm You are right Any Gumint that thinks they can tax and spend their way out of recession has rocks for brains.

    the new world paradigm has changed Citizesn are no longer prepared to trust Gumints to take most of their hard earnt money on a TRust us we know what we are doing basis.

    Citizens demand more control and say over their lives. Gumints have falied big time in their endless quest to command and control.

    Time for them to practise minimalist and Foxtrot Oscar out of our lives.

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