Fran says can tax cuts
January 31st, 2009 at 11:00 am by David FarrarFran O’Sullivan calls for National to can its 1 April tax cuts and put the money into boosted unemployment benefits and superannuation.
It’s amazing how so many people keep calling on National to break its election promises within just weeks of the election.
January 31st, 2009 at 11:04 am
Aww, there was a time when I thought Fran O’Sullivan was one of the two economic right wingers that writes in our media….has she lost her mind?
Vote:January 31st, 2009 at 11:07 am
Wrong Fran. Key should increase taxes by 500% and then redistribute it to everybody. This will not only fix the recession, but as well, none of us will ever have to work again. Won’t that be nice??
Vote:January 31st, 2009 at 11:17 am
“It’s amazing how so many people keep calling on National to break its election promises within just weeks of the election”
Isn’t it! Amazing! Perhaps people have seen through the smoke and mirrors. Horrors!
Vote:January 31st, 2009 at 11:35 am
Get over it Greenfly.
I can’t help thinking she might have a point here. If things get really, really bad, then yes. But I think at the same time, people receiving the dole should be out cleaning up our parks, public amneties, etc. With councils under cost pressures, maybe it’s time we made use of our unemployed, as well as instilling a sense of civic pride in them.
Vote:January 31st, 2009 at 11:39 am
It’s amazing how so many people keep calling on National to break its election promises within just weeks of the election.
Try replacing the the word ‘amazing’ with the word ‘significant’.
Vote:January 31st, 2009 at 11:42 am
was she having a bad day when she penned that? or too many cocktails at lunch?
its the middle/upper class that will grow the economy.. cut taxes as much as possible!
Vote:January 31st, 2009 at 11:45 am
I prefer amazing, as they are often the very ones who will condemn a party for not keeping its promises.
Vote:January 31st, 2009 at 11:45 am
If Fran O’Sullivan feels compelled to pay more tax to support unemployment benefits be my guest – make a donation, but I’d like more of my own money back to support my next own egg! – thanks for coming Fran.
Start reducing DPB and redistribute that money its so badly needed
Vote:January 31st, 2009 at 11:46 am
One area where I would cut taxes which strangely has not yet been discussed either by politicians or by the media, is in the current 39% rate on redundancy payments. That is critical and urgent, since many if not most of us on this blog who work are almost certainly going to lose our incomes this year and we won’t be able to get into a new job, either. It used to be taxed at 5%. That’s what it should be returned to. Now. Tomorrow is too late. Key, English, ARE YOU LISTENING!!!!!!!!!!!!!!!!!?????????????????
Almost every single company is currently in the process of implementing no-hire policies virtually across the board. This will not change, for the forseeable future. It will last right through this year and probably the next and the one after that, too.
Face it.
Such a cut would be hugely popular, and a relatively miniscule hit on the consolidated fund. It’s a political sitter. Key, English, ARE YOU LISTENING!!!!!!!!!!!!!!!!!?????????????????
Secondly, as I said months ago, this is definitely a case for a wartime cabinet situation. Well done Fran, for picking up on that. Keep saying that until it sinks in.
Vote:January 31st, 2009 at 11:47 am
“Try replacing the the word ‘amazing’ with the word ’significant’.”
‘Unsurprising’ would be better – No one claimed Labours 33.1% was ’significant’
Vote:January 31st, 2009 at 11:52 am
Reid, that is a very good point. That’s something that should be repealed immediately. Also, the essential double-taxation for second jobs – we want a productive richer economy, so why tax people who are just trying to get ahead? Such a move would be hugely beneficial for lower income earners, I can’t believe Labour didn’t do it.
Vote:January 31st, 2009 at 11:53 am
I agree that perhaps better targeting of the tax cuts to ease the task of doing business may be beneficial, however boosting unemployment benefits at a time when they are about to come under pressure is laughable. We need to encourage business investment and encourage job creation not unemployment creation.
I wish NZ media would remove all of the ‘Frans’ (O’Sullivan, Mold etc etc) who seem to think they provide ‘expert’ opinion. They are all as useless as tits on a bull.
Vote:January 31st, 2009 at 11:56 am
“They are all as useless as tits on a bull.”
Well yeah, but Fran O Sullivan is not quite as useless as most of them.
Vote:January 31st, 2009 at 11:57 am
“Reid, that is a very good point.”
So it is, but in fact you could make the same point in respect of almost every tax.
Vote:January 31st, 2009 at 12:00 pm
Gosh, your main cheerleader is off-message. Quick, have her sacked.
Vote:January 31st, 2009 at 12:14 pm
You could RB, but that one is especially urgent in the context of these times.
Vote:January 31st, 2009 at 12:16 pm
Perhaps poor old Fran is looking at an early retirement?, could there be self interest here?. I hear calls for thousands of fruit pickers have fallen on deaf ears, seems to me the benefit is still large enough to keep those who need it and those that don’t with all the necessities of life. No, no more fucking benefit Fran, what about helping hand to the thousands who pay for the benefit. God help this country when so call right wing commentators are stupid enough to believe that paying out more and more in welfare will save us from ourselves FFS!
Vote:January 31st, 2009 at 12:17 pm
V, I agree, but the thing that worries me is that all I’ve heard so far from the politicians is more of the same old stuff on how to do that, which won’t work, because we’re entering a new paradigm.
I haven’t heard anything from that Job Summit – don’t even know if it’s happened yet. Anyone know more? If anyone can come up with new thinking along pragmatic workable lines, it’s Weldon and co.
Vote:January 31st, 2009 at 12:31 pm
I find O’Sullivan confusing here. First she proposes some real Govt intervention, and then she warns not to follow the very same Obama interventions. (Hey Fran, where’s my green tomato recipes?)
I would have thought that if tax cuts were saved, then the banks get some much needed liquidity.. enough perhaps to cut their margins and start lending again to business? If intervention was needed, it could be in the form of an agreement with Govt to keep the money circulating in NZ.
Also, there’s good evidence that the 39% tax rate didn’t hit the Govt coffers in anything like the amounts that might have been expected because people are rational and formed trusts. Those trusts soaked up an extra $4 billion between 2001 and 2007, and income splitting, employing the family in the company and the creation of thousands more companies created lot more tax avoidance. Cutting the top rate would reduce such avoidance.. and that dosh could go into new public/private partnerships, if the Govt is clever enough to pitch them right.. NZers have been busting a nut to have opportunities for more direct investment in their country.
Meantime, I’ve been enjoying the interlude of the last three months.. hardly anything new to pry me and my cash apart.
JC
Vote:January 31st, 2009 at 12:36 pm
And we wait for politicians to get us out of this economic re-adjustment? although I do wonder why ACT is so silent.
Vote:January 31st, 2009 at 1:58 pm
reid,
I agree that new thinking is called for. I think politicians need to get out of the way lest we become like the U.K., where in some areas the state is 70%-80% of the local economic activity, in other words a drag on areas that are productive and wealth creating.
The reality is politicians won’t have the answers, because the real answers are politically unpalatable. But politicians as they are need to be seen to be doing something, however all they will do is interfere and prolong the pain.
Take bank bailouts like Citigroup as a case in point, why has the US government squandered 120% of the market cap of a bank for a mere 6% equity stake. It’s time to temporarily nationalize them, put them through Chapter 11, and reduce debts and obligations. The good assets, can be spun off and resold at market prices and run by competent management.
I can’t see how reaching across the political divide is going to solve anything. Why would you reach over to a political party who spent 9 years pissing any net gains against the wall by reckless spending/handouts/political bribes and has now engaged in some of the most economically illiterate and populist calls to date.
Vote:See: http://antidismal.blogspot.com/2009/01/goffs-goof.html
January 31st, 2009 at 2:11 pm
I don’t understand how anyone in their right mind can consider Fran to be a ‘right winger’, especially if you read the whole column. Basically she calls for scrapping the tax cuts (which are a PROVEN recipe to kickstart an economy), in favor of doling out the money to beneficiaries instead, expecting that their increased purchase of drugs, alcohol and lotto tickets is going to magically create jobs and boost the economy…..
Also Fran’s call for government to reach out to opposition, just exactly at time when the Labour Party happens to find itself in the opposition benches, is a little more than suspicious if you ask me.
Don’t remember any such calls being made during 9 years of autocratic Labour government…
So given Fran’s socialist leanings, I’d hardly label her demand that tax cuts be canned as “amazing”. Personally I’d use the word ‘predictable’…..
Vote:January 31st, 2009 at 2:13 pm
Over-taxation and billions of dollars worth of low-quality government spending have taken NZ from a strong position, economically, and left it in a position where we’re at the mercy of events overseas and the fallout from the Labour Government’s housing bubble.
And Fran O’Sullivan’s recommendation to fix the situation: Continued over-taxation and billions more dollars of low-quality government spending! Incredible!
A down turn in the business cycle is a message to everyone, government and business, to get rid of the inefficiency and waste that arose when times were good. Those countries that restructure fastest will be first out of the recession. Those that try to subsidise continued inefficiency and waste will be last out of the recession, with Japan’s economic quagmire from around 1990 till just a few years ago being a good example of that.
Vote:January 31st, 2009 at 2:51 pm
No doubt the media will be writing editorials on how National was right (as it was – although making the promise in the first place was madness) to can the scrapping of the surcharge in 1990 because the country was bankrupt. Defeaning silence? Fancy that.
Vote:January 31st, 2009 at 3:27 pm
Gueez Fran … just who pulled your chain? You don’t speak for me and don’t patronise me by trying to make me feel guilty. Donate your tax break to charity if that’s what you want. Right now my income is down and the additional tax relief is needed and welcome.
Vote:January 31st, 2009 at 4:45 pm
DavidP, this has been posted several times already in the last few days, but it is such a good analysis, I’d urge anyone who hasn’t read it, to do so:
James QUINN: “U.S. heading For Japan Style Two Decade Economic Depression”
http://www.marketoracle.co.uk/Article8541.html
I sincerely hope some of the Nats top economic people are following this line of argument.
Vote:January 31st, 2009 at 4:48 pm
And I love THIS video of Fred Thompson discussing, with heavy irony, the US Government’s “bailout” and “stimulus” packages…..
http://blip.tv/file/1528079
As he says; “be extra nice to the kids…….they don’t know what’s going to hit them……..” (after the current generation has continued to live high on more and more borrowed money)
What a pity he didn’t become President……
Vote:January 31st, 2009 at 5:01 pm
Ummm.
Fran O’…WHO ????????
Vote:January 31st, 2009 at 7:44 pm
I see today that Treasury has offered to supply English with a list of public expenditure programs that they consider are wasteful. Their claimed saving would be 2.5 Billion a year.
Fearless Treasury sticks its oar in
http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=10554434
Will English have the balls to act. I very much doubt it. He is a conservative socialist trained by Treasury and never earned a living in his own business so really doesn’t have the right mindset. Will probably attack the beneficiaries like his Mouth and Trousers friend Ruth from down the south. That’s what you always do isn’t it when you hail from the Southern pastures and don’t like the rest of us.
Vote:January 31st, 2009 at 10:23 pm
Actually i hope media commentators continue to put increasing pressure on the National party to raise taxes and break election promises, it would seem alot of people in this country need to learn a very hard lesson.
Vote:February 1st, 2009 at 3:01 am
“It is an absurdity that top-earning Kiwis should expect a pay boost given the massive deepening of the international recession and the rampant resurgence of protectionism”.
Actually this round of tax cuts barely makes up for Labour not dishing out the spoils in the good times when there were large surpluses. Think of the savings people could have gathered to spend now when it is needed (apparently according to Dr Bollard)
And Fran O’Sullivan is a journalist. She’s neither right or left or centre. I would certainly never be expecting an application from her to join the VRWC.
Vote:February 1st, 2009 at 4:39 am
Here’s a radical idea.
Re-instate the 5-10,000 Economic Investor Immigrants with a de-minimus lower limit of free cash of $3m + all the other chattels and accroutrements. Such as pre-funded pension pots.
Plus with proven entrepreneurial skills as employers.
Would be fully subscribed and instantly inject how many billion per annum?
Hundreds of thousands are clammering to exit the UK right now.
Plus all the knock on benefits to construction, housing market, bank liquidity,
Vote:February 1st, 2009 at 8:19 am
Sigh, Tax cuts are an immediate salve to our recessionary wound whilst infrastructure investment takes years for the cash to come through.
Vote:They should be increasing them