The 2009 Budget

May 28th, 2009 at 2:03 pm by David Farrar

First of all kudos to and Treasury for getting rid of the old rolling embargo that was in place for previous budgets. This meant you could not blog a specific item until the Minister of Finance read it out in his speech. It made blogging and reporting very hard as it was not always clear whether the part you wanted to cover was even in the speech, let alone when.

So now it just a simple 2 pm embargo which means I can just hit publish at 2 pm, which I have done.

Deficits and Debt

The fiscal parameters inherited by Labour meant gross debt was tracking to reach 48% of GDP by 2013, and 70% of GDP, or $227 billion by 2023 – equal to $180,000 of debt for every household of four. There was a very significant structural deficit. This is because the economy will have $50 billion less output over next three years than forecast in the 2008 budget.

The status quo would have meant future generations would face either massively higher taxes, or cuts in health and welfare spending as more and more money would be spent on debt servicing. Debt servicing would have increased to $14 billion a year – more than current Vote Health.

The measures outlined in the 2009 budget are forecast to have gross debt peak at 43% of GDP in 2016/17 and then decline to 37% by 2023 – almost half the 70% on existing parameters.

The projected deficit for this upcoming year is still a very large $7.7 billion and next year looks to be $9.3 billion, before gradually reducing. So the Government is borrowing a lot of money to help keep people’s incomes and jobs steady.

Labour budgeted for $1.75 billion a year of new spending initiatives. National is reducing this to $1.45 billion for this year and $1.1 billion in out years. This is pretty reasonable – in the late 1990s it was only $600 million a year. However it will pose some real challenges in around 2011/12. For the next two years expectations will be lowered due to the global recession. People are accepting zero wage increases etc, and lobby groups know now is not the time to ask for lots more money.

But in two to three years, with the recession behind us, there may be a lot of pressure for new spending beyond the $1.1 billion. Inflation and population growth alone can take up a fair bit of that. We will still be running large deficits, but the economy will be growing and the Government will come under real pressure.

Spending Initiatives (generally all over four years)

  • $323 million for home insulation – grants of up to $1,800 for most households and up to $3,000 for community service card holders
  • $3 billion for Vote Health, being $2.1b for DHB services, $70 million for 800 more health professionals, $130 million for maternity services and $245 million for 20 new elective surgery theatres
  • $1 billion in new spending including $523 million on new schools and school upgrades
  • $900 million for Justice including 600 more police for $183 million, 246 more probation officers at $256 million and 1,000 more prison beds at $385 million

There is lots of little stuff also, but the Government has targeted most of the extra spending in a few key areas.

Jobs

Unemployment is forecast to peak at 8% in September 2010. I hope so, but suspect it may push 10% as I think the US and Europe are more stuffed than people realise.

The Government has committed $7.5 billion of infrastructure investment over the next five years through toad building, state house building and refurbishments, new and improved schools and broadband rollout. On top of that 600 more police, 246 more probation workers and 800 new training placing for health professionals.

Labour’s planned infrastructure/capital spend was $900 million a year – it has increased to $1.5 billion a year. Labour will claim more should be done for jobs, but in reality National is spending more on infrastructure projects than Labour would have. And the long term solution to jobs is having a competitive robust economy.

Reprioritisations

The line by line reviews have identified $2 billion of savings (around $500 million a year) that is being reinvested in frontline services. This means that that the $1.45 billion increase in operating spending will fund $1.9 billion of new initiatives.

As an example the Government has cut funding for adult community education hobby courses by $54 million, and increased special education funding by $51 million. Sounds like a good reprioritisation to me.

Also reducing support function expenditure at the Ministry of Education by $18 million to help fund a $36 million literacy and numeracy initiative.

Tax Cuts

Yes they are gone. The official Government line is deferred, but to no particular date, so I say they are cancelled. When tax cuts are budgeted again in the future, it will be a new package I suspect, not just reinstate the planned 2010 and 2011 tax cuts.

English said that it is highly unlikely tax cuts would be reinstated before the next election. He was asked if he would deliver tax cuts before the books were back into surplus (which is not until 2017), and he said the main thing they would look at is if the economy was growing strongly enough.

The deficits for the next two years, even without the tax cuts, is a combined $17 billion. They are a victim of timing partly. I did ask the Minister what their rationale was for deciding to break a tax cut promise rather than a spending promise such as interest free student loans, especially as he originally opposed interest free student loans but always campaigned for tax cuts. English responded that people feel insecure in a recession, and they made a decision not to cut any current entitlements to help confidence and security.

Several from the “right” congratulated me on my question, as no one else really pushed back much on the tax cuts vs spending issue. I was however amused to be berated by Miss Ten, who was attending as an analyst, for trying to get interest put back on her rather large student loan.

The $900 annual cost of the future tax cuts is around 20% of the total tax cut package. The Oct 2008 and April 2009 tax cuts are worth around $4 billion a year of foregone revenue and were very well timed in terms of fiscal stimulus. So at least we got $4 billion of the $5 billion!

In my words the main reason why they are gone is that they had not yet occurred. It is far less painful to cancel future spending or tax cuts, than to cancel existing spending or hike existing tax rates. Yes people get annoyed when they don’t get something promised, but they get more annoyed if you actually take away something they already have.

National did “pay” for the 2010 and 2011 tax cuts by reducing KiwiSaver subsidies by over $1 billion to compensate. The problem is that the fiscal position has changed so much since PREFU that anything not yet nailed down had to be sacrificed.

The problem for the Government is that while fiscally cancelling the tax cuts was the right thing to do, it makes their long-term closing the gap with Australia objective much harder. A low tax economy (with less tax churn) will generally grow faster than a higher tax economy (there is 40 years of OECD data to back this up).

The Government says it has a medium-term goal of a top company, trust and personal tax rate of 30%. I asked the Minister if he could define the medium-term and he said they were having problem even defining the short-term!

NZ Super Fund

As everyone expected, and as Dr Cullen himself said would be sensible when he set the Fund up, the automatic contributions are being suspended until there are surpluses again. The fund was explicitly set up to be funded out of surpluses. It was never intended to borrow for the contributions. So when you hear Goff and Cunliffe squeal about this, remember they are wrong.

The automatic contributions are likely to be suspended for 11 years, and this will prevent $19.5 billion of extra debt (plus interest). Once automatic contributions resume, they will be higher due to the Fund’s formula – $2.5 billion instead of $2.2 billion.

The Government is still going to make a voluntary contribution of $250 million this year. They seem to be tagging it for investment within NZ and to supplement the supply of capital to local businesses. This is very smart politically, but very dumb in an economic sense. However it was an election policy so no surprise.

Summary

There’s not much one can argue should be done differently. I would almost say the budget wrote itself, as the structural deficit and debt projections had to be dealt to. This budget knocks $100 billion off the long-term debt projection.

It is quite a canny mixture of ingredients:

  • An increase in infrastructure spending
  • Focusing new spending on core areas of health, education & law & order
  • Plowing savings back into new frontline spending, so one is not cutting overall spending in a recession.
  • Reducing future spending and future tax cuts to bring the deficit into surplus and cap debt.
  • Suspending Super Fund contributions so you don’t borrow $20 billion to “save”

It is pretty orthodox, and as I said probably almost wrote itself. It isn’t a budget for closing the gap with Australia, or seriously rejigging the economy. It’s the budget you have to have first, before you can get to grips with some of the other stuff. I can over-state how much of a disaster it would be I financing costs on debt were allowed to grow to greater than current Vote Health.

The politics around the Budget will be interesting. You could almost see the Greens abstain on it – after all it cancels tax cuts and gives a huge amount to home insulations etc. Labour will not be able to propose a constructive alternative (they will of course scare monger). The consensus amongst most media in the lockup seems to be that there wasn’t much else the Government could have done.

It also sets up an interesting election in 2011. The books will still be significantly in deficit, and National will not be offering tax cuts in all probability. So what will Labour promise to do differently? If they promise extra spending, then they can be branded as irresponsible and increasing debt. If they promise tax increases, then that won’t be very popular either.

Labour’s entire 2008 election campaign was based on how you can’t trust John Key, that he is not a centrist – but secretly a hard line right winger (like me :-) who wants to sell everything and slash spending and taxes. Their worst nightmare continues to play out – that John Key is exactly what he campaigned on – a centrist.

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196 Responses to “The 2009 Budget”

  1. Danyl Mclauchlan (1,065 comments) says:

    The Government has committed $7.5 billion of infrastructure investment over the next five years through toad building

    Ribbit.

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  2. Ryan Sproull (7,027 comments) says:

    We have the technology. We can rebuild him. The $7.5 billion toad.

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  3. big bruv (13,249 comments) says:

    Right…..this is the start of this contributor working to get rid of this left wing government.

    No cuts in benefits yet the bastards have cancelled the tax cuts, this is unacceptable to those who were conned into voting for the National party.

    [DPF: I am sure the Green or Labour parties will enjoy getting your support]

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  4. bchapman (649 comments) says:

    re 2011, the arguments will be about where you spend not how much. It will be interesting if having a Capital Gains Tax or changing the GST/PAYE tax mix come up in the tax review.
    The party that shows it is looking to the future and not pandering with popularist policies will get my vote.

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  5. mike12 (183 comments) says:

    A very forward looking budget me thinks. No tax cuts – at least better than the hike we would have got from Cunliffe.
    More cops and docs all good

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  6. toad (3,669 comments) says:

    DPF said: The Government has committed $7.5 billion of infrastructure investment over the next five years through toad building…

    That’s very pleasing to know.

    Cynical old me thought there would never be anything good in a National Party Budget.

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  7. dimmocrazy (286 comments) says:

    This is all about credibility. The Nats are never to be trusted again, simple as that.

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  8. toad (3,669 comments) says:

    big bruv said: No cuts in benefits yet the bastards have cancelled the tax cuts…

    Don’t forget the promise to increase benefit abatement thresholds bruv – another broken promise.

    [DPF: That is not broken. It is scheduled for 2011 unless things have changed]

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  9. big bruv (13,249 comments) says:

    Well said dimmo, the only thing that will annoy me more than this betrayal will be if Rodney does not speak out against this socialist shower of shit we call our government.

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  10. wreck1080 (3,726 comments) says:

    Budget looks predictable. No one really expected tax cuts to go ahead. Super fund cancellation is a no brainer. Goff will come out swinging on that one since I think it was a pre-election promise. Boring old goff, will spout on how we are robbing the pension fund.

    I’m tired of the govt bailing out the building sector though (home insulation stuff). That home insulation does not actually build the economy.

    So, instead of people having cash to spend on food/clothing/transport/health etc, it is going into propping up the building sector. Robbing peter to pay paul effectively.

    I’m sick of farmers, and builders.

    Question must be asked:Why did cullen and helen have to go on such a spending binge? We are paying the price for that now. Pricks the both of them.

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  11. big bruv (13,249 comments) says:

    Toad

    Who really gives a shit if dole and DPB bludgers are not going to get a raise.

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  12. Kimble (4,378 comments) says:

    This IS about credibility, and if National had done everything they had campaigned on then they would have lost my vote to ACT forever.

    The world changed since National won the election. If they ignored this then they would have been as irresponsible as Labour.

    This budget is exactly the sort of thing everyone expected. And it will be nauseatingly silly for Labour to come out and claim that it was full of nasty surprises. They will still probably do it though.

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  13. toad (3,669 comments) says:

    bchapman said: The party that shows it is looking to the future and not pandering with popularist policies will get my vote.

    That would have to be the Greens – the only party that sticks by its policies because it considers them correct, even if some of them may not be popular. A capital gains tax and tightening up the LAQC arrangements are among those.

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  14. sonic (2,818 comments) says:

    Bruv is Robin Hood in reverse, he wants to rob the poor to fill his own pockets.

    On the wider point, Labour campaigned on “you cannot trust National to keep their promises” given this budget we can regard that as proved.

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  15. Kimble (4,378 comments) says:

    The home insulation credit will have a lot of positive externalities, given that we have socialised medicine and welfare. Those two things arent going away any time soon so dont even bother whining about them.

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  16. stephen (4,063 comments) says:

    …the only thing that will annoy me more than this betrayal will be if Rodney does not speak out against this socialist shower of shit we call our government.

    Anyone know if he HAS to vote for it or not? I’m guessing yes, which would preclude any condemnation.

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  17. Kimble (4,378 comments) says:

    And sonic finally chimes in with the party line.

    NOBODY RESPOND TO SONIC THIS TIME

    1) It will really frustrate him
    2) we all know what you are going to say and most of us agree with you
    3) he wont listen and just spout off more crap

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  18. big bruv (13,249 comments) says:

    I see the racist party has managed to squeeze 42 million out of the Nat’s as well.

    So, Comrades English and Key have managed to look after Maori party voters, Green party voters and still kick National party supporters in the teeth.

    [DPF: You mean apart from the $4 billion of tax cuts already delivered, and the 600 extra police etc etc]

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  19. sonic (2,818 comments) says:

    Trying to shut down debate again Kimble, tsk tsk.

    What are you scared of? You might have to justify the budget?

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  20. Kimble (4,378 comments) says:

    REMINDER: NOBODY RESPOND TO SONIC

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  21. Danyl Mclauchlan (1,065 comments) says:

    Anyone know if he HAS to vote for it or not? I’m guessing yes, which would preclude any condemnation.

    He must support the government on budgets and confidence and supply. So yes.

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  22. KiwiGreg (3,170 comments) says:

    At the very least they should have signalled an increase in the National Super age to 68.

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  23. garethw (205 comments) says:

    Ambitious for NZ huh? All pretty boring but nothing really major that will grow the economy either through the recession or after it? Zero drivers for Mr Key’s beloved productivity.

    I can’t quite believe the extent of the slashing of the Super Fund. It’s going to be smaller so will fund much less of the super entitlement in the future (requiring more taxation then), and take longer to be a positive contributor to our taxation.

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  24. Kimble (4,378 comments) says:

    garethw, it doesnt make much sense to borrow to invest with a long term expected return only a little amount above the borrowing rate. Also, the more borrowing the country does, the lower our credit rating will go and the higher the credit spread will be. So borrowing to fund investing could make all borrowing more expensive, negating the positive expected return.

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  25. ben (2,396 comments) says:

    $3 billion for health. WHAT THE F***, NATIONAL?

    Labour doubled health spending this decade. It was spectacularly unsuccessful. In fact I think the number of operations went down, or only marginally increased. Now National wants to pour in more money while it stares at a $7 billion deficit.

    This might be defendable if there was any serious reason to think that this spending would actually make sick people well, but the evidence is that it won’t. It will be consumed not by more operations, but by an intensification of competition (i.e. lobbying) for resources between departments in the health system.

    A family friend is a senior doctor, among the most qualified people in the country, who spends more than half her time not treating people but lobbying to keep their department going or lobbying to take funds off somebody else to increase their share of the pie.

    So will the share of her time spent treating patients be increased or decreased by adding another $3 billion? It will decrease it, because that extra money just raised the returns to lobbying.

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  26. garethw (205 comments) says:

    I could have handled a reduction for a few years, but full cancellation for 11 years? Especially the direct effect it is having on the end output of the fund.

    [DPF: If there are no surpluses, there are no surpluses. The Cullen Fund was going to only pay for 1/7th of future super, and now it is probably 1/8th - not a big change to future affordability]

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  27. Sam (497 comments) says:

    “English said that it is highly unlikely tax cuts would be reinstated before the next election. He was asked if he would deliver tax cuts before the books were back into surplus (which is not until 2017), and he said the main thing they would look at is if the economy was growing strongly enough.”

    Ahem – what about the old line used to justify tax-cuts in the first place, you know, how they will grow the economy and all… So even National disbelieve their own marketing…

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  28. Jeff83 (771 comments) says:

    Firstly nice summary DPF. Thanks.

    Big Bruv, you must feel really disappointed, where is your National party of years gone by who ignored what they said to get elected and then did their agenda after. I think the party that said what you wanted to hear only got 2.8% (figure pulled out of my arse – what did Act get?) of the vote. Key’s campaigned on being moderate, and has shown that he intends to be so.

    Smart politics by Key, tbh surprised there is not more spending cuts. Working for the families would be a good start -> most inefficient system ever. I understand that for every $1 the IRD collects 25c is lost to the IRD bureaucracy; on top of that there would be the costs of WFF on top of it. Such a bizarre system.

    [DPF: I think a priority should be looking at a more rational tax and welfare system with less tax churn, and maybe going into the election to seek a mandate to implement it]

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  29. Kimble (4,378 comments) says:

    “This might be defendable if there was any serious reason to think that this spending would actually make sick people well, but the evidence is that it won’t.”

    I think there is good reason to think the value of the spending will increase. Unlike National (and ACT more importantly), Labour never did anything more than pay lip service to waste reduction in health, or efficient spending.

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  30. sonic (2,818 comments) says:

    So ben, you think you will get better health outcomes with less money?

    The number of elective surgery procedures carried out is a very poor indicator of the efficiency of a health system.

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  31. MikeMan (171 comments) says:

    No big surprises there I agree. On the whole it looks like a sensible and solid budget.

    wreck1080:
    The insulation stuff will have positive benefits for a lot of families in health, power expenses (and indirectly greenhouse emissions). That will all stimulate the economy and should put more money in most people pockets. That is assuming the uptake is large enough. If not then there will be a surplus from this funding bucket in 3-4 years time. Where is the downside?

    Anyone who thought that there would be a tax cut needs to wake up, mind you at least there was not a 0.25% cut on the bottom rate so that the nats could say “We did cut taxes and it is Labours fault they are not larger”

    I am quite impressed that there was very little political largess spread around for winning an elections sake.

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  32. Kimble (4,378 comments) says:

    Sam, there is a time for tax cuts; when the country is running a massive surplus. Labour took that opportunity and used it to increase (mostly entrenched) spending. When the country moves into deficit, increasing public debt is the major concern.

    The Lefties were arguing against tax cuts on the basis that they would increase debt. That wasnt true before. Now it is.

    The opportunity for tax cuts has been squandered and the blame for that lies nowhere near National.

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  33. Kimble (4,378 comments) says:

    NOBODY RESPOND TO SONIC PLEASE

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  34. Ruth (178 comments) says:

    Outside the beltway/blogosphere tax cuts are simply not an issue of huge importance.

    They won’t be in the Mt Albert campaign either.

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  35. peteremcc (341 comments) says:

    ACT has to vote for the budget, but that doesn’t mean we can’t speak against it.

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  36. bananapants (107 comments) says:

    A predictable, rather unremarkable budget. The tax cuts were never affordable anyway, so we shouldn’t be surprised about this.

    bigbruv – when you talk about cutting benefits, whose in particular are you talking about? And what do you mean by cutting?

    Do you mean that the woman down the road from me, for example, with three children under three (one a newborn), whose husband just abandoned her for a younger woman and fled the country? Should we cut her benefit? Because she sure does seem like a DPB-bludging slutbag from where I’m standing.

    And as far as the dole goes, shall we cut that from my other neighbour, the guy supporting a wife and three young children whose quantity-surveying business just completely went down the tubes, having not received any new jobs since 2008?

    Are those the sorts of people that you mean? Or are you talking about someone else?

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  37. sonic (2,818 comments) says:

    Kimble, could you keep the noise down so the grown ups can talk please?

    Never mind us though, what are S+P. our new overlords saying?

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  38. Sam (497 comments) says:

    A pretty safe budget – predictable as others have pointed out, and not all that different to what I imagine Labour would have produced (despite what they are able to say and criticise about it now). Tell me, why did we bother with the election again…

    I don’t see anything major for tertiary education – this would have been a useful priority in terms of investing in the future at a time when retraining will be one way of dealing with unemployment. Seems to me to make more sense than new frontline spending – just a bunch of new initiatives that will be as wacky and ineffectual as the old ones no doubt…

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  39. stephen (4,063 comments) says:

    He must support the government on budgets and confidence and supply. So yes.

    That used to be a basic question, but the hydra government be getting me all confused an forgetful.

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  40. big bruv (13,249 comments) says:

    DPF

    Could you at least try and give the impression that you are not a cheer leader?

    We were promised tax cuts, I worked bloody hard to get our local National party MP elected and for that I see the Nat’s deliver to Maori party voters, Green party voters and those who swing between the Nat’s and the Labour party depending on what is in it for them.

    I am bloody sick of paying for other people’s kids, I am sick of funding race based policies and I am sick of seeing my tax dollars being wasted on those to bloody lazy to get off their arse.

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  41. Kimble (4,378 comments) says:

    AHA just noticed another good thing. The mortgage diversion option in KiwiSaver has been removed. The inclusion of this option confused the purpose of the KiwiSaver scheme. It made the assumption that an investment in your property was the same as saving for retirement, which is a mindset New Zealanders need to move away from.

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  42. garethw (205 comments) says:

    Oh, and DPF must be seriously pissed off by the way:

    “Just for a moment there it sounded as if the Government might be preparing to renege on its promise of income tax cuts over the next three years.
    Now that would seriously piss me off if that ever happened.”
    http://www.kiwiblog.co.nz/2009/02/fallow_on_tax.html

    And cancelling the tax cuts would have been a Labour tax and spend policy
    http://www.kiwiblog.co.nz/2009/02/labour_back_to_being_anti_tax_cuts.html

    =P

    [DPF: And my preference would be to can stuff like interest free student loans than tax cuts. I actually asked the Minister specifically why didn't he do that]

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  43. peteremcc (341 comments) says:

    Here here Big Bruv.

    DPF’s comments that Labour wouldn’t done anything different speaks volumes.

    It’s ridiculous for anyone to suggest there is no alternative… go and read some of Roger Douglas’ press releases over the last week.

    National = Labour

    National’s budget = Labour’s budget

    Anyone surprised?

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  44. Kimble (4,378 comments) says:

    NOBODY RESPOND TO SONIC IF YOU WOULDNT MIND

    I am sick of otherwise rabid National supporters giving them shit for not adhering to an election promise that has since become, frankly, uneconomic.

    Its called the real world big bruv. I dont care what you were promised when times were good, times arent good anymore.

    How would you feel in Labour had won based on a campaign of a further massive increase in spending to mop up the rest of the surplus, and then followed through with that promise even after the surplus turned into a massive deficit?

    You would hope that they would see sense and adjust their actions to the prevailing conditions. For the countries sake.

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  45. rolla_fxgt (311 comments) says:

    Seems Goff hasn’t moved on from the election campaign, its still the tired campaign about Key’s honesty. Get a life, no one cares about your little beliefs.

    But not such a good budget from National, where’s the contestability of health funding for the private sector? Where’s a tax cut in 2011, with the associated spending cuts in bloated bureaucracies?
    Where’s increased science funding? Who really cares that Manakau gets 300 more cops? They voted for the last govt, why reward them for it? Put a fence around it, and just arm the cops that are there now, bullets are quite cheap. That’s really tough on crime.

    I’m disappointed in you John Key, shame on you.

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  46. sonic (2,818 comments) says:

    “an election promise that has since become, frankly, uneconomic.”

    Are you seriously telling us that no-one could have predicted the prevailing economic situation at election time? National’s only possible defence is that they were too dumb to read a newspaper business section until the 9th of November.

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  47. Razork (375 comments) says:

    LOL, good old BB.
    Nothing has changed.

    Complain and blame.
    When was the last time you had a good day?
    It can’t have been when your Hurricanes won a trophey.

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  48. Kimble (4,378 comments) says:

    TODAY IS NATIONAL “DO NOT RESPOND TO SONIC” DAY

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  49. Razork (375 comments) says:

    Oh Fuck me.

    Goff ” This government inherited an enocomy in good shape”

    That has to be the funniest line in Parliament this year.

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  50. big bruv (13,249 comments) says:

    Kimble

    Care to tell me the difference between this socialist government and the last one we had?

    I used to think that most here were not cheer leaders, I used to think that KB contributors could look at each and every decision based on its merits and support or condemn is accordingly, sadly it looks like I was wrong.

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  51. goodgod (1,363 comments) says:

    So, more or the same Labour type stuff, but less of it.

    Don’t know why they’re making long term projections. Labour will be back well before 2023 since there’s nothing National can trump them on.

    The argument now is that only surpluses fund tax cuts, is that it? So that means only high tax rates will ensure tax cuts from Bill English. And the worse things get, the more the government will step in to restrict growth? He’s even more confused than Cullen.

    And look, this whole ” can’t have done anything else…the budget wrote itself ” stuff is not even remotely believeable. Roger Douglas is a walking talking monument that at any time you may do what is best for the country. This is the budget that National gave away the next election on.

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  52. sonic (2,818 comments) says:

    It’s not great for National goodgod despite Mr Farrar’s heroic spin. The next election manifesto that the Tories produce that promises tax cuts will be torn apart, and the super fund decision is bafflingly long term.

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  53. big bruv (13,249 comments) says:

    Raz

    Been a bloody good week (business wise) to be honest, I hate to think of the number of dole bludgers I have kept in booze and drugs.

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  54. Razork (375 comments) says:

    big bruv (3644) Vote: 3 0 Says:

    May 28th, 2009 at 2:56 pm
    DPF

    Could you at least try and give the impression that you are not a cheer leader?

    We were promised tax cuts, I worked bloody hard to get our local National party MP elected and for that I see the Nat’s deliver to Maori party voters, Green party voters and those who swing between the Nat’s and the Labour party depending on what is in it for them.

    BB, you campaigned for ACT.

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  55. Kimble (4,378 comments) says:

    PLEASE NOBODY RESPOND TO SONICS TROLLING AT LEAST IN THIS ONE THREAD

    This one is expected to justify the spending they are doing. This one is not going ahead with a campaign promise under changed circumstance for purely political reasons. This one is being honest about the future of New Zealand rather than BSing their way through their first term.

    Its called FISCAL RESPONSIBILITY.

    It doesnt make sense to worsen New Zealands economic standing.

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  56. MikeMan (171 comments) says:

    Bananapants: Maybe he is talking about the females who have 11 kids to 10 different guys over 25 years so they never have to work.

    Maybe he means the guy who lives next to my mum who is 35, still living at home and spending his sickness benefit on weed every week.

    I have no problem with Unemployment benefits, just cap it at 50% of that persons tax contribution over their working life. The quanity surveyor would be fine and have significant reserves based on that formula. I have no problem with the DPB but the timer should start with the first payment and cut off when the youngest child at that point turns 13, that will cover your other neighbour. Why should the tax payer foot the bill if someone without the financial means to support a child gets pregnant?

    I do not think anyone is advocating the removal of all benefits in 01/01/2010 but there are people abusing the system and that is unsustainable in the longer term.

    It is about RESPONSIBLE management of resources, yes there should be HELP available but it should not be a lifestyle choice.

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  57. goodgod (1,363 comments) says:

    That’s correct sonic, but you can hardly call them Tories anymore, they may as well join the Labour party. Just have “sit anywhere you like day” in parliament. The Grand Coalition of Labour/National that was such an absurd suggestion pre Nov 08 has happened in every way except in name. Life’s funny like that.

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  58. big bruv (13,249 comments) says:

    Raz

    “BB, you campaigned for ACT”

    Not locally I didn’t, ACT did not stand a candidate in my electorate.

    I knocked on hundreds of doors with the National party candidate, it was always my intention to vote National here and give ACT my party vote.

    Wish I had not bothered now.

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  59. sonic (2,818 comments) says:

    “his one is not going ahead with a campaign promise under changed circumstance for purely political reasons.”

    Thanks for the response Kimble, however if you make a promise then claim you had to break it due to unforeseen circumstances, people are clearly going to ask why you failed to forsee them.

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  60. dimmocrazy (286 comments) says:

    I have some problem understanding all the friendly apologists here. The Nats campaigned on tax cuts fair and square. Not just that, they were going to fund these by “smarter” use of money spent on government activity. In my book that means only one simple thing, it is a mater of priorities, when we have to choose we will err on the side that individuals are better at deciding what to do with their dollars than the gummint. That was their platform and it was rolled out at a time NZ had been in recession for a year. (Billybob confirmed as much in his speech) Also they were very well aware of Cullen’s nasty surprises. So don’t give me any BS about recession etc. And EVEN IF there were reasons to reconsider, cuts should have been made in government spending, that was the promulgated priority, full stop.
    Conclusion: many (and I am one) were simply cheated into voting for the Nats. Simple as that, and no way to gild that lilly.
    It will take a lot for my disappointment to abate.

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  61. Kimble (4,378 comments) says:

    goodgod, FFS WHAT ARE YOU DOING!??! STOP IT IMMEDIATELY!

    SONIC IS A TROLL LOOKING TO DERAIL THE BUDGET THREAD

    DONT LET HIM

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  62. Kimble (4,378 comments) says:

    You FEEL cheated.

    But if National had continued with tax cuts, and increased NZ debt to record levels, then WE ALL would have been cheated.

    I really cannot see why you tax cut fiends cant understand that circumstances have changed since National started its election campaign.

    As for Cullens nasty surprises being obvious to anyone, well, they would have been surprises then would they?

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  63. goodgod (1,363 comments) says:

    I’ve give myself a slap on the hand.

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  64. sonic (2,818 comments) says:

    “I really cannot see why you tax cut fiends cant understand understand that circumstances have changed since National started its campaign.”

    What has changed since then that was not forseeable.

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  65. Ryan Sproull (7,027 comments) says:

    Sonic does have a point. The economic crisis was rolling along long before National campaigned on tax cuts.

    [DPF: And the tax cuts policy was changed so they were fiscally neutral, to take account of PREFU. Since PREFU the projections have got a lot worse]

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  66. stephen (4,063 comments) says:

    Wish I had not bothered now.

    This your way of saying you miss Helen Clark?

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

    Whats Key doing giving Russel Norman such praise in parliament during debate.?

    (Hullo John – there’s a by-election on and Russels the opposition)

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  68. big bruv (13,249 comments) says:

    Stephen

    “This your way of saying you miss Helen Clark?”

    At least I knew who the enemy was with Klark in power.

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  69. KiwiGreg (3,170 comments) says:

    “But if National had continued with tax cuts, and increased NZ debt to record levels, then WE ALL would have been cheated.

    I really cannot see why you tax cut fiends cant understand that circumstances have changed since National started its election campaign.”

    Yes because the only way to correct a revenue/spending imbalance is to maintain revenue? No real attempt to rein in spending and a bunch of new low-quality spending “initiatives”.

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  70. garethw (205 comments) says:

    For gods sake, drop this “only contribute in surplus” stuff. The Act says NOTHING of the kind, even if Cullen did once in an interview somewhere.
    Current cost of super: 3.5% of GDP
    Expected cost in 2030: 5.6% (and 6.6% in 2050)

    The whole point of this fund was to up our total super “cost” (including Fund contributions) slightly now to bring it down from 2025 onwards. We would have actually stopped contributions by 2022 and actually made money from it.
    We’ve now stopped ALL contributions until 2020! So all of us still alive and contributing in 15 years time are going to have higher tax rates to pay for that higher spend on the super burden.
    Based on a rough estimate of GDP in 2030 using the estimated 1% cut GDP spending on 2030 Super WITH the Fund is something like $3b a year extra that we’ll have to pay because of this wholesale removal of it.

    [DPF: You are wrong on many fronts. Automatic contributions are stopped, but the Government has made a vountary one, and may do mroe as the economy improves. And what I quote is not something Cullen once said - it was his official Q&A when he launched it. You do not get more official than that - see http://www.kiwiblog.co.nz/2009/03/absolute_hypocrisy_from_labour_over_nz_super_fund.html for details]

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  71. goodgod (1,363 comments) says:

    But if National had continued with tax cuts, and increased NZ debt to record levels, then WE ALL would have been cheated.

    I really cannot see why you tax cut fiends cant understand that circumstances have changed since National started its election campaign.

    Circumstances didn’t change. NZ still had a growth problem and still has a growth problem. Tax cuts were one part of an overall plan to end Government spending in areas the private sector could do it better and stimulate real industry growth. Why all the short memories? Cheated? How? National sold a change of direction and wouldn’t deliver.

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  72. Razork (375 comments) says:

    Patrick Starr (2359) Vote: 1 0 Says:

    May 28th, 2009 at 3:26 pm
    Whats Key doing giving Russel Norman such praise in parliament during debate.?

    (Hullo John – there’s a by-election on and Russels the opposition)

    Purely to piss Labour off.

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  73. big bruv (13,249 comments) says:

    And on a lighter note…..Red Russ is now boring the house to death with his communist bullshit.

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  74. Kimble (4,378 comments) says:

    DO NOT RESPOND TO SONIC PLEASE

    KiwiGreg, how long do you think it will take to move the public sector back to efficiency. It is not going to happen this year. This was not the budget that was going to do it all. We have seen some cuts already and we will see more in the future. But alot of the spending set up by Labour has an inertia that takes time to reverse.

    Cutting spending willy-nilly could lead to worse outcomes. These things take time.

    And Ryan, remember that the PREFU was released in October and even then it was out of date. People did figure that things would be bad, but how bad they were has only been revealed since then.

    http://www.kiwiblog.co.nz/2008/10/prefu_ten_years_of_deficits.html

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  75. MikeE (555 comments) says:

    I think this shows why you can NEVER trust a tory.

    http://www.youtube.com/watch?v=ciOmlFLZNx0 <– wheres my money?

    I hope Roger Douglas savages the nats this afternoon.

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  76. sonic (2,818 comments) says:

    “People did figure that things would be bad, but how bad they were has only been revealed since then.”

    You mean you didn’t notice all of the “world economy doomed to worst recession since 1930′s” headlines before the election?

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  77. georgedarroch (316 comments) says:

    A low tax economy (with less tax churn) will generally grow faster than a higher tax economy (there is 40 years of OECD data to back this up).

    Sorry, the evidence for which you speak simply isn’t there. There is zero correlation between tax rates and GDP growth among developed countries.

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  78. big bruv (13,249 comments) says:

    MikeE

    I will also be interested in what Sir Roger has to say, one would hope that Rodney lets him off the leash.

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  79. Sam (497 comments) says:

    Kimble, you, and the Nats, are guilty of thinking like the Labour party in terms of the affordability and priority of tax cuts.

    I said it earlier, if tax cuts can stimulate the economy, then why are they so bad now? They don’t have to cost us anything if we cut spending to compensate. The budget shows National’s priorities however, poll-driven labour-lite wins out over right wing economic theory yet again…

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  80. Ratbiter (1,265 comments) says:

    Nat tax cuts deferred until after next election?

    Helen Clark has taught you well, young Key.

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

    This is a very steady hand on the Tiller.

    Very, very stormy waters ahead.

    Just watch the German Economy, and Swiss, and Ireland, and UK all go off like a handgrenade when the highly leveraged derivatives start to get called in from Mid June onwards.

    The Banks there have no money now. Just wait till this horrible set of circumstances blows in. The fuckin Americans sold the greedy European Bankers a crock!

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  82. Kimble (4,378 comments) says:

    garethw, you still dont seem to get it.

    If we borrow now to invest in volatile markets we will swap tax increases in the future to pay for retirement for tax increases in the future to pay for debt. Not only that, we would be taking on additional risk from the investments. We would have swapped a certain liability for an asset of undetermined value.

    goodgod, if you dont think New Zealands (and the worlds) financial circumstances hadnt changed since National started their campaign (and remember once a campaign starts it doesnt stop) then you are misremembering history. People knew it was bad, but not exactly how bad it has turned out to be or how it is forecast to be.

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  83. KiwiGreg (3,170 comments) says:

    “Cutting spending willy-nilly could lead to worse outcomes. These things take time.”

    I dont know why you say that. As far as I know that hasnt been tried. And worse than what?

    I’m pretty sure I would be OK without a Ministry of Arts, I’m happy to pay direct for mine. I could live without a Families Commission. Private provision of charity would almost certainly be better targetted and more effective than Welfare. I could go on but it’s a waste of time as National’s objective, its sole objective, is to be re-elected. Over the long rung all countries get the governments they deserve.

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  84. Ryan Sproull (7,027 comments) says:

    DPF and Kimble,

    Fair enough response.

    Was anyone at the time of the election predicting that the economy would be such that tax cuts were unaffordable?

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  85. garethw (205 comments) says:

    [DPF: You are wrong on many fronts.]
    Usually yes, but I don’t think so here :>

    Fair enough that we’re getting $250m in instead of $2b. OK, that’s something (although as you said, ruined by politicising the Fund and forcing them to invest sub-optimally).
    And Cullen said it in a Q&A, interview, etc – for sure. But the Act is not predicated AT ALL on Government fiscal position and the relative costs of superannuation stay the same – a smoothed pay as you go system is still the best idea if you give a damn about what happens in 20 years time.

    Like I said, a reduction for this year and next (being the recessionary years) I would have seen an argument for and been supportive of. But cutting it for 11 years (besides this $250m) just destroys the concept of smoothing our about-to-ramp up super burden.

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  86. Kimble (4,378 comments) says:

    NOBODY RESPOND TO SONICS TROLLING TODAY PLEASE

    Sam, it is not right wing economic theory to always cut taxes under all circumstances. I think you are minimising the impact to New Zealand of increased public indebtedness.

    Spending cuts will come, and it was unlikely to come in the first year. Remember Keys promise not to reduce the number of staff in his first year? He said THAT because he knew it was impossible to determine appropriate cuts in that time.

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  87. garethw (205 comments) says:

    Kimble – so now we’re just going to take on that debt in 15 years time without any investment growth. It’s just shifting the funding of the spending out (however you want to fund it)

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  88. big bruv (13,249 comments) says:

    Lol..you have to laugh at the way nobody listens to a single word Red Russ has to say, every other speech in the house raises interjections or comment from the other parties, it is obvious that they all quite rightly think that Russ and the watermelons are a bloody joke.

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  89. sonic (2,818 comments) says:

    “Was anyone at the time of the election predicting that the economy would be such that tax cuts were unaffordable?”

    M Cullen 2008

    “Finance Minister Michael Cullen says his tax cuts will be smaller than National leader John Key’s proposals.

    In an apparent bid to spike any complaints by the public over the size of their tax cuts, Cullen has admitted the cuts he plans to unveil in his May Budget will be smaller than those planned by National.

    However, he said that National would not be able to outspend the Government on tax cuts without cutting spending on social services.”

    http://www.encyclopedia.com/doc/1P2-15571681.html

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  90. goodgod (1,363 comments) says:

    So tell me Kimble, when things get worse, will you support increasing taxes?

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  91. paradigm (507 comments) says:

    Brian Fallow is critical of the budget’s long term vision in the Herald Budget articles – particularly removing tax cuts. While I agree that in the long term tax cuts should go ahead, the current economic conditions may reduce the immediate benefit of them. We should consider that much of the benefit of tax cuts comes from attracting and retaining skilled people in NZ – fighting the “brain drain” if you will. Until the world economy picks up there will not be as many positions available overseas, and the braindrain might be less of an issue. I say might because I am honestly interested if this has the effect I just predicted. I guess we have to wait a year or too for the statistics.

    He also labels suspending govt payments to the cullen fund as creating a long term unfunded liability. In spite of the entirely sensible “no borrowing for investment” argument, I expect this to be used as a labour attack line given national has been slamming labour over “unfunded” election promises, and promised no unfunded comitments in the budget.

    Personally I think the govt needs to wean the country off interest free student loans. If its too politically expensive to cut current students off, then say all future loans will carry an interest rate equal to the rate of inflation (at the very least). This would mean that most current students are unaffected (and thus not sway their vote) and those who lose out in future would be under 18 (so couldn’t vote). While not yielding too many immediate affects, it would improve govt debt in the long term, and improve the quality of degrees studied. There is also an element of fairness in it in that the real value of the loan is retained.

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  92. big bruv (13,249 comments) says:

    Go get em Sir Roger!!!

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

    Move over ginga – GO ROGER!!!

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  94. sonic (2,818 comments) says:

    Douglas is such an economic illiterate, lets make huge cuts in the middle of a world recession, great idea.

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  95. goodgod (1,363 comments) says:

    We should consider that much of the benefit of tax cuts comes from attracting and retaining skilled people in NZ – fighting the “brain drain” if you will. Until the world economy picks up there will not be as many positions available overseas, and the braindrain might be less of an issue.

    hahah now that is classic left-wing thinking. Don’t have to get the country moving because the world’s moving slowly and competition for employees/futures is less. So just sit tight and ignore the situation. Yep, that brilliantly sums up the National attitude. Yeah, that’ll stuff them, those pesky educated types, they can’t escape so we’ll bleed em dry here and ruin their future earnings as well.

    I can’t believe I’m hearing this stuff here! It’s quite amusing.

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  96. KiwiGreg (3,170 comments) says:

    @paradigm – the potential problem with the brain drain issue is the US and Australia are likely to come out of recession in Q3 or Q4 of this year whereas New Zealand is likely to remain in recession into 2010 so the relative opportunities outside New Zealand will iincrease.

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  97. big bruv (13,249 comments) says:

    Lol….”Labour tried to tax us toward prosperity” “all I can say about this budget is that is it no better than a Cullen budget”

    Well said Sir Roger, rip into the bastards.

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  98. Kimble (4,378 comments) says:

    NOBODY RESPOND TO SONIC PLEASE

    “So tell me Kimble, when things get worse, will you support increasing taxes?”

    As a general rule, I dont support tax INCREASES.

    But in the real world it all depends on when the next downturn happens and how much they have cut wasted spending by then. If things take another turn for the worse next week, and there is still not enough time to identify waste, then a short term tax increase with a firm expiry date may be warranted for the country to remain solvent without burdening future generations with a trillion dollars of debt.

    If it is still further along and they have cut waste by as much as they can, as well as cut other vanity spending (on Arts lets say), then I would support tax increases, assuming they are still in a big deficit, if they target them a bit better (ie, a tax increase of 1% above an income threshold, unless you have private health insurance, like in Australia).

    I cant see it heading that way though. I reckon that spending CAN be cut over the medium term, without too much loss of welfare. And I reckon it could be reduced as a percentage of the total economy over time, to the extent that taxes can be significantly reduced. This would mean a shift in the NZ nanny-state, anti-business, fearful of private enterprise mentality, and the government only providing essential services.

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  99. burt (7,797 comments) says:

    OK you have had your fun DPF – where is the real budget story.

    Where were the big “OMG” announcements….

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  100. Jeff83 (771 comments) says:

    “DPF: I think a priority should be looking at a more rational tax and welfare system with less tax churn, and maybe going into the election to seek a mandate to implement it”

    Completely agree. Not quite sure what it is the but the effective marginal tax rate for some places on the income scale after WFF is taken into effect is up around the 80% mark, its fricken ludicrous.

    I am definitely in favour of a progressive tax system, as opposed to some purists, however it has to be reasonable and our current system isnt.

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  101. burt (7,797 comments) says:

    Jeff83

    What do you mean… keeping tax thresholds static while wages inflate is completely reasonable. Over 20% of people paying the rich prick tax rates just shows us what a rich country we are….

    Oh hang on…

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

    Shit look at that- theres a massive potential saving speaking right now

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  103. big bruv (13,249 comments) says:

    From the sublime to the ridiculous……here is Tariana and the apartheid party.

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  104. Kimble (4,378 comments) says:

    PLEASE DO NOT RESPOND TO SONIC

    Dont forget people, this is about the next election too. It does no one any good for National to cut taxes now, slash spending, and reduce welfare payments. All that does is give Labour more ammunition to win the next election.

    Do you really expect the rest of New Zealand to understand that reducing government spending may be a good long term action for all of us? Of course not. Look at how the previous National (and the Labour one before that) is demonised by the economic illiterati.

    It does the country no long term good to have the people that failed them for 9 years, that put the economy in the peril it is in at the moment, to have them waltz in after 3 years in opposition during which their chickens came home and roosted National up good, only to further screw things up.

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  105. sonic (2,818 comments) says:

    “Do you really expect the rest of New Zealand to understand that reducing government spending may be a good long term action for all of us? Of course not. Look at how the previous National (and the Labour one before that) is demonised by the economic illiterati.”

    In other words, our ideas are so unpopular we have to lie to the stupid mass of people about them.

    Oh and please don’t respond Kimble, thanks for letting that Tory mask slip.

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  106. big bruv (13,249 comments) says:

    “Dont forget people, this is about the next election too.”

    You just don’t get it do you Kimble?

    People like you are fodder for the likes of Key (as Sonic is fodder for the Labour party) irrespective of what Key promises and then fails to deliver you will always cheer for “your team”.

    You seem to excuse any mistake by the Nat’s just as long as the other team do not get to make the rules.

    Bloody wake up!

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  107. sonic (2,818 comments) says:

    “Sonic is fodder for the Labour party”

    I don’t even vote for them bb, try and keep up.

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  108. backster (2,076 comments) says:

    PARADIGM::::::::::’He also labels suspending govt payments to the cullen fund as creating a long term unfunded liability. In spite of the entirely sensible “no borrowing for investment”

    Yes Rod (someone) 2ZB’s financial analyst, made a similar comment last night, but neither FALLOW nor Rod ?? said whether they personally were borrowing money to invest in the markets at present.. Anyway if they are convinced this was a good idea the Fund Managers could leverage of their existing portfolio to make new investments. Me I’d rather put it on the favourite on the first race tomorrow.

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  109. Kimble (4,378 comments) says:

    NOBODY RESPOND TO SONIC PLEASE, NO MATTER HOW SHRILL HE GETS

    No big bruv, it is you who doesnt get it. If National had said in the budget that they were going ahead with the promised tax cuts, in spite of the changed circumstances, I would be bollocking them a lot more than you are right now.

    That would have shown that they had abandoned their obligation to New Zealand and its future.

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  110. sonic (2,818 comments) says:

    Kimble, I think the person getting shrill is sitting in front of your PC.

    “f National had said in the budget that they were going ahead with the promised tax cuts, in spite of the changed circumstances,”

    What changed circumstances, everyone knew what was happening in the economy.

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  111. paradigm (507 comments) says:

    I agree backster, the ability to make sensible investments is highly dubious at present, especially for a supposedly low risk entity like govt super. I was just predicting labour’s probable attack line.

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  112. burt (7,797 comments) says:

    What I find amusing is that the same people who supported Labour cancelling tax cuts because the surplus was not a large as expected are now bagging National for cutting them while the deficit is growing.

    Some muppets don’t have enough intelligence to remember what they cheered for last year and therefore they don’t notice they are making dicks of themselves this year.

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  113. sonic (2,818 comments) says:

    We are bagging them for making promises they could not keep burt, you see the difference?

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  114. big bruv (13,249 comments) says:

    Kimble

    “That would have shown that they had abandoned their obligation to New Zealand and its future”

    And because you are a cheer leader you cannot (or will not) admit that this budget is doing exactly what you hoped would not happen.

    Comrades Key and English have shit on the people of NZ and more importantly they have shit of the future for our kids all so they can keep their greedy little hands on reigns of power.

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  115. Kimble (4,378 comments) says:

    NOBODY RESPOND TO SONIC PLEASE, WE ALL KNOW HE TELLS OBVIOUS LIES JUST TO WIND PEOPLE UP

    Actually backster I am not sure a lot of fund managers are allowed to gear their portfolio without specific authorisation from all investors. Of course, they could simply be investing in companies with a lot of internal leverage of their own, which is quite risky itself.

    burt, they dont care what they were cheering back then, or lamenting now. Their aim isn’t to make rational argument, it is to populate the blogosphere with anti-National hate.

    BURT, we all know they response you will make to sonic. You point is valid and your argument is sound. So you can just leave it unsaid, and sonic unsatisfied, if you wouldnt mind.

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  116. Kimble (4,378 comments) says:

    What is this budget doing, big bruv? I dont think you really know.

    Is increased debt (a certainty now, as compared to when National first proposed tax cuts) really what you want to leave your kids?

    NOBODY RESPOND TO SONIC PLEASE

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

    If Peter Dunne and Roger Douglas both feel so strong about privatisation why dont they force the hand of the Nats?

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  118. sonic (2,818 comments) says:

    Saying that National promised tax cuts is a “lie” Kimble, is that your best response? (btw for someone ignoring me you are using my name a lot)

    Thats an interesting point Patrick, will ACT stand on principle or is Rodney’s ministerial car the only principle that matters?

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  119. Kimble (4,378 comments) says:

    PLEASE, NOBODY RESPOND TO SONICS OBVIOUS BAITING, YOU WILL GET NOTHING OUT OF IT

    Patrick, it was part of their agreement to support confidence and budgets.

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  120. big bruv (13,249 comments) says:

    Jesus Kimble, are you capable of formulating your own response or are all your lines straight from the national party manifesto?

    Who said anything about borrowing more money or increased debt?, do you really understand the crap we are in and the totally gutless way the Nat’s have approached this budget?.

    Actually, don’t bother answering that question, I know you have no idea and I know you don’t care just as long as your team retains power.

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  121. Kimble (4,378 comments) says:

    PLEASE DO NOT RESPOND TO SONICS TROLLING

    “Who said anything about borrowing more money or increased debt?”

    Like I said, cutting expenditure is not something that can be done all at once. You risk cutting important spending along with everything else. It is also not good politics for a number of reasons.

    Key acknowledged that the cut in expenditure would not happen immediately when he promised that staff numbers wouldnt drop. Have you forgotten that?

    Further cutting taxes (or have you forgotten the tax cuts that were already delivered?) before savings in spending can be made will lead to a larger deficit. Which will need to be funded. Either taxes are not cut now, or taxes are increased in the future to pay for the debt.

    Yes we all want lower taxes. But why? Because we think it will lead to a better outcome over all.

    So why would I be OK when taxes arent being cut? Because I think it will lead to a better outcome overall.

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

    Goff is a lying toad.

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  123. Ratbiter (1,265 comments) says:

    Sonic;
    as Glutaemus and a few others have said above this is just a steady hand in very dark times. Politicians have to work with what the balance sheet has to offer.

    Electioneering promises and slogans are just words – surprise! It is touching that so many fan boys are let down “but… you promised tax cuts…” as though realising for the first time that Key is but a politician, not the messiah.

    All in all, the response is a bit like the one towards the All Blacks losing to France in the quarter final. Only much, much more important…

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  124. jarbury (464 comments) says:

    Hi Sonic how’s it going?

    This budget is definitely 99% Bill English and 1% John Key. There’s no long-term vision in here as to how we are going to get ourselves out of this recession and close the gap on Australia. There’s no vision about how to transform our economy to one that isn’t completely dependent upon housing prices and Fonterra milk solids prices. There’s no vision about what we might do when oil spikes in price next year or the year after, or how to combat climate change in the longer term. There’s no vision about how to improve the actual health system’s efficiency and effectiveness, there’s certainly no vision when it comes to transport policy.

    This is a visionless budget. From both a right-wing and left-wing perspective.

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

    Kimble
    “it was part of their agreement to support confidence and budgets.’

    sure, but good old fashioned horse trading shouldnt be out of the question if they feel strong enough about it

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  126. Kimble (4,378 comments) says:

    Ratbiter, REALLY? REALLY?!? YOU ARE GOING TO FEED THE TROLL?

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  127. jarbury (464 comments) says:

    Just wondering what the state of the books would be without the October 2008 and April 2009 tax cuts. Anyone know?

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  128. Kimble (4,378 comments) says:

    Patrick, I am sure this isnt the budget they were hoping for. The upside is, that it actually strengthens ACTs position in the future.

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  129. Inventory2 (10,097 comments) says:

    Well, who would have thunk it? Plughead Cosgrove is quoting from Brian Rudman’s Herald article yesterday, just as was predicted!

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  130. Positan (383 comments) says:

    A well presented piece – however, many of the rendered abstractions made in “reply” represent either abundant proof of impossibly stunted cranial capacity, or the quality of consideration meted results entirely from too few brain cells in the typing fingers.

    BTW shouldn’t the phrase “The fiscal parameters inherited by Labour meant gross debt … ” in the second paragraph read ” The fiscal parameters inherited FROM Labour … ?

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  131. Ratbiter (1,265 comments) says:

    Kimble – I really don’t think there’s much for any leftie (even myself) to say – beyond “Oh look – Key’s flip-flopped on his tax cut promises”. And that has been said many times by the kiwiblog right already!

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  132. Sam (497 comments) says:

    Coalition agreements are not sacrosanct – would you have ACT and Dunne stand by and support a National promise to collectivize the rural and manufacturing sectors just because they had signed a bit of paper? A withdrawal of support is most certainly an option IF they feel strongly enough about the issue (but of course, there will be insufficient backbone from Dunne or hide – Douglas would probably do it if he were able…)…

    You could argue that National have broken their deal with their partners in that they have gone back on their campaign promises, which no doubt influenced the decision of their support parties to form a coalition in the first place. Thus it wouldn’t necessarily look bad for the minor parties to bring national down…

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  133. democracymum (660 comments) says:

    Interestingly although the budget was designed to stem an increase in interest rates
    National and ANZ cunningly slid through increases just prior to the budget announcement.

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10575024

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  134. Chicken Little (793 comments) says:

    THIS A PUBLIC SERVICE ANNOUNCEMENT

    After the runaway success of the IGNORE SONIC campaign on the Budget2009 thread on Kiwiblog, John English and Bill Key have just announced as a extra Budget2009 bonus the IGNORE SONIC campaign will now be in place until March 31 2010.

    Thats right Ladies and Gentlemen you get to – IGNORE SONIC UNTIL MARCH 2010.

    Who said there wasn’t something for everyone in Budget 2009?

    This Government delivers bigtime.

    WE WILL NOW RETURN TO YOUR NORMAL SERVICE

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  135. village idiot (748 comments) says:

    There’s definately a recurring theme with this budget and it’s that Kimble (whoever he is) is frightened of someone called ‘sonic’. Has anyone else noticed? Sonic? are you really that scary that we shouldn’t invoke your wrath? Kimble, are your really that timorous that we should do as you squeak?

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  136. village idiot (748 comments) says:

    In the crazy, topsy turvy downside up world of Kimble’s thinking, the slap-down Act has got from Key and English in this budget ” actually strengthens ACTs position in the future”
    What do you think of that, ssssssssssonic?

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

    Sonic is brain dead.

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  138. Rebel Heart (249 comments) says:

    Firstly, ‘sup Sonic.

    Secondly, WTF National. ACT better attack the fuck out of this budget otherwise screw delivering the rest of their pamphlets for the Mt Albert by-election. If this is the best we can get out of a right wing government after all these years there’s no way I can be fucked being involved with politics anymore.

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  139. burt (7,797 comments) says:

    DPF said;

    “It also sets up an interesting election in 2011.”

    Oh, of course, the election…. National have been in govt for what 6 months… and they are already setting themselves up for the election. Self serving major parties…. supported by spineless minor parties. I’m seriously thinking about hanging up my blog keyboard now the national-led govt have become a blue version of the Labour-led govt.

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  140. paradigm (507 comments) says:

    To be honest I think we should rig up a bot that would publish “IGNORE SONIC, HE IS JUST TROLLING TO COMPENSATE FOR (insert random reason here)” in any thread, immediately after he posts. If this discussion is any indication, it would probably improve the intelligence of the debate 10 fold.

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

    Razork “Purely to piss Labour off.”

    Great strategy, Pissing Labour off, whilst pissing on his own candidate sounds pretty ‘stupid’ to me

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  142. burt (7,797 comments) says:

    jarbury said;

    Just wondering what the state of the books would be without the October 2008 and April 2009 tax cuts. Anyone know?

    Don’t be a twit. Tax thresholds in a progressive taxation system must shift upward (call it tax cuts if you have an ideology problem and love fleecing people till they leave the country) or wage inflation makes us all “rich” under the progressive system.

    Do the math you idiot. If the “rich” threshold stayed at $60K forever how many years of minimum wage CPI increases would it take for minimum wage earners to be rich – answer – a lot less than “forever”.

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  143. Rebel Heart (249 comments) says:

    Haha, you’re not reading this thread are you Brian Nicolle or was it just a coincidence that you called me two minutes ago to ask how my leaflet dropping is going.

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  144. Grant Michael McKenna (1,156 comments) says:

    Well, I voted for a pragmatic centrist government, so I’m happy with the budget. To all ecofreaks, socialists and those who would sell their grannies for the sake of debt reduction: Key and English will be around for a long time to come, so get used to your misery.

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  145. Comrade MOT (59 comments) says:

    “fiscally cancelling the tax cuts was the right thing to do”
    What UTTER POOHS you speak DPF.
    They new when they promised tax cuts that there was a recession. They had already reduced the tax cut amount before the election cos they new there was a recession. Key was also promising recession relief before the election. They clearly new that there was a recession, and that there was a risk of it getting worse. (They could have put clear provisos into their promise)
    It is a break of a promise, and in no way needed.
    What about all this new spending? why not put that into tax cuts?
    “$323 million for home insulation – grants of up to $1,800 for most households and up to $3,000 for community service card holders
    $3 billion for Vote Health, being $2.1b for DHB services, $70 million for 800 more health professionals, $130 million for maternity services and $245 million for 20 new elective surgery theatres
    $1 billion in new spending including $523 million on new schools and school upgrades
    $900 million for Justice including 600 more police for $183 million, 246 more probation officers at $256 million and 1,000 more prison beds at $385 million
    There is lots of little stuff also, but the Government has targeted most of the extra spending in a few key areas.”

    Are you telling me that none of this could have gone into tax cuts?

    They are dishonest big “government knows best” bums, and they did not do the morally right or the fiscally right thing.

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  146. Friedman4Eva (3 comments) says:

    Government expenditure is on the rise. Core Crown Expenditure in the 2007/2008 was 31.8 percent of GDP. Under National it will surge to 37.3 percent of GDP in 2010/2011. Even by 2012/2013, it is 36.3 percent.

    Great stuff National!

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  147. Comrade MOT (59 comments) says:

    appologies for the “new”s instead of “knew”s

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  148. bananapants (107 comments) says:

    Did anyone hear Garth George on National Radio this afternoon? He sounds like he has a terrible cough.

    Mikeman – it’s nice of you to try and clarify for bigbruv, but I notice he’s avoided the question. I agree with you – blanket, generalised approaches aren’t useful. That’s why I directed a question to bigbruv, around his blanket, generalised statement.

    DPF – Are you sometimes a little embarrassed by the sorts of people you attract to your website?

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  149. tvb (4,200 comments) says:

    This is a very centrist budget, and firmly buries the politics of the mother of all budgets which caused National so much political damage. Labour are offering nothing credible and it seems the public will trust English and Key to get the balance right. Labour Governments in Australia and UK have wrecked the Crown finances through a series of largely ineffective stop-go measures, and will pay a political price for that. English and Key have a much steadier hand. Thank god for both of them.

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  150. Bullitt (137 comments) says:

    No real surprises from me. I would have loved to see cuts to working for families or scrapping interest free student loans but the political capital used would be massive. Tax cuts would have been nice but everyone knew they were gone. At least we didnt get massive tax increases like Labour would have brought in in their December AND May budgets.

    By the end of this term people will know National can be trusted and will do the best for the country and theyll be able to campaign on decent policies like getting rid of all those dead rats.

    Saying that I didnt vote National and I wont next time either. Someone needs to keep them honest.

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  151. Viking2 (11,126 comments) says:

    Poll on Stuff. Current results. Looks like people expected and require that Tax cuts go ahead. More Act voters for the next election. All good.

    Has the Government done the right thing by postponing planned tax cuts in the Budget?

    Yes, the economic climate makes further tax cuts untenable
    2427 votes, 24.3%

    No, tax cuts were promised and should have been delivered
    7197 votes, 72.0%

    Only if they are postponed for no more than a year or two
    365 votes, 3.7%

    Total 9989 votes

    Related story: Debt focus of Bill’s Bleak Budget

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  152. Viking2 (11,126 comments) says:

    HMMM. Now known as Bills Bleak Budget. Probably should have been Bleak Bills Socialist Budget.

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  153. RightNow (6,649 comments) says:

    Viking2, the stuff poll is still vulnerable to being screwed by multiple voting and there will be a number of groups interested in making out that National have done the wrong thing. I had thought it was mostly the blinkered Labour groupies and stranded fans, but it seems big bruv probably got a bit of RSI voting on it too. Anyway, I doubt that over 70% of tax-payers were going to benefit from this round of tax-cuts anyway, so that gives an indication of how credible it is.
    Big bruv, are you really so desperate you needed an extra $10 per week or whatever the next round of tax cuts would have given you? Are you also so selfish you can’t live without it for the sake of getting NZ back on a steady course? If so then you can do whatever you like you selfish twat, vote for the libs next time.

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  154. Kimble (4,378 comments) says:

    “More Act voters for the next election.” – Viking2

    Which is why I said it strengthens their position.

    Still, economics isn’t democratic. Just because 72% of people responding to a poll wanted tax cuts, doesnt mean that they are the right thing to do. Shit! The majority of New Zealanders will always want increased government spending on one thing or another, but that doesnt automatically make increasing funding of each of those things the right thing to do either.

    SONIC IS A TROLL, HE DELIBERATELY SAYS CONTROVERSIAL THINGS JUST TO PISS YOU OFF, HE PROBABLY DOESNT BELIEVE HALF OF IT

    DONT FEED THE TROLL

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  155. Murray M (455 comments) says:

    RightNow, I think you will find that BB is not objecting to no more money in his pocket. What he is objecting to is idle, useless, lazy, irresponsible, ungrateful, fucking pricks getting money for nothing. In that I agree with him.

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  156. grumpyoldhori (2,410 comments) says:

    Damn as much as it hurts a old Labour type to say so English has done a good job with the cards dealt to him.
    Like others I would like to see those bloody whining university students paying interest, but that would upset their ACT voting parents.

    Oh and a message to you ACT supporting types, you have fuck all chance of ever forming or leading a government, the simple bloody reason being that the majority support either the Nats or Labour.
    Don’t like it, fine, fuck off to a country with a nil tax take, I suggest Somalia.
    Now, will Hide give up the perks of office ?

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  157. jarbury (464 comments) says:

    jarbury said;

    Just wondering what the state of the books would be without the October 2008 and April 2009 tax cuts. Anyone know?

    Don’t be a twit. Tax thresholds in a progressive taxation system must shift upward (call it tax cuts if you have an ideology problem and love fleecing people till they leave the country) or wage inflation makes us all “rich” under the progressive system.

    Do the math you idiot. If the “rich” threshold stayed at $60K forever how many years of minimum wage CPI increases would it take for minimum wage earners to be rich – answer – a lot less than “forever”.

    I didn’t say “they shouldn’t have done the tax cuts”. I just asked what the state of the books would be without those tax cuts.

    [DPF: The April 2009 ones were fiscally neutral as cuts to KiwiSaver matched them. The Oct 2008 ones were off memory around $1.6b annually]

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  158. Rebel Heart (249 comments) says:

    More Act voters for the next election.

    This will only occur if ACT go on the attack and get on the front page of the news for being angry at the Budget. It looks like they’re just leaving it to old man Douglas that no media is going to pay attention to – it really needs to be Rodney for a headline that will make an impact: “Minister has no confidence in the National led government’s budget”.

    KIMBLE SHUT THE FUCK UP.

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  159. jarbury (464 comments) says:

    Burt: I didn’t say “they shouldn’t have done any of the tax cuts”. I just asked what the state of the books would be without those tax cuts.

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  160. Southern Raider (1,548 comments) says:

    Just seen the reporter with the mou (Fran) trying to drum up some left wing hysteria by talking to a middle income family who admitted $20 per week would make no difference, but got them to try and say National has lost their confidence for not proceeding with the tax cuts

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  161. burt (7,797 comments) says:

    jarbury

    This will explain it: http://beingrightisnotwrong.com/2006/07/04/tax-cuts-explained/

    Labour knew this was the case, they just painted themselves into a corner trumpeting an ideology that they knew would eventually ruin the economy. So they gave us what we deserved, what the reality of fiscal drag demanded and what was standing between any chance of winning the election or not.

    Really you lefties need to keep up – tax thresholds in progressive tax systems cannot stray static while wages are rising. Cullen being a dim-bulb couldn’t understand fiscal drag OR Cullen being a thieving overtaxing prick used fiscal drag to rape us. You choose which type of c##t he was.

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  162. burt (7,797 comments) says:

    kimble

    SONIC IS A TROLL, HE DELIBERATELY SAYS CONTROVERSIAL THINGS JUST TO PISS YOU OFF, HE PROBABLY DOESNT BELIEVE HALF OF IT

    DONT FEED THE TROLL

    Yes yes yes. I agree.

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  163. wreck1080 (3,726 comments) says:

    Labours budget (in the parallel universe where they won the election)….

    Top tax rate increased to 49%.

    GST increased to 15%.

    IRD budget doubled to cope with extra admin work to enforce new tax rates.

    Working for families payouts 10% increase.

    Means tested GP visits introduced. Those earning over 80k must pay full GP costs.

    ‘Kiwicard’ introduced. Giving beneficiaries and low income earners ‘free’ public transport.

    Unemployed to receive free university fees.

    Helen crows about this being the peoples budget.

    Cullen intercepted by reporters at the airport, where he sniggers at the increase in top tax rate.

    Thank god labour were given the boot!!!!

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  164. burt (7,797 comments) says:

    wreck1080

    Don’t forget that the top tax rate of 49% would be set to kick in at the same level as the dole. Anybody earning more than a beneficiary is rich and must be punished.

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  165. Ryan Sproull (7,027 comments) says:

    Sonic, you’re such a polarising figure.

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  166. big bruv (13,249 comments) says:

    RightNow

    “Big bruv, are you really so desperate you needed an extra $10 per week or whatever the next round of tax cuts would have given you? Are you also so selfish you can’t live without it for the sake of getting NZ back on a steady course? If so then you can do whatever you like you selfish twat, vote for the libs next time.”

    Wow!…spoken like a true and loyal fan of the National party.

    Unlike you I want NZ to get back on course NOW and I want a government brave enough to do what is right, this budget is simply a continuation of the status quo, you WOULD be able to see that if you took of your bloody blinkers for five seconds.
    I bet you did not even watch or listen to the budget speech, I suspect you came here with a predetermined pro National mindset and would be cheering for comrades English and Key even if they has raised taxes.

    You also seem to have forgotten that Neville Key campaigned on many issues but at the forefront was the issue of tax cuts and his own personal integrity, certainly the country needed somebody we could trust after the lies of Klark and Kullen and by and large the country responded to Key because he looked like a politician one could trust.

    Sure the economic climate has changed, and yes it was inevitable that Neville Key was going to have to break some promises but the part you blindly refuse to acknowledge (due to your blinkered mindset) is that once again Neville Key has broken the promises he made to his core National party supporters.
    What does the man have to do before you will admit that this is a budget designed to keep the Nat’s up in the polls rather than a budget that tackles the very real problems this nation faces?.

    This budget gives certainty to those on benefits yet does nothing to stimulate the vast majority of the workforce who have to rely on the retail world to pay their mortgages and feed their families, tax cuts would have helped ALL of those people, however we now know that Key does not care about them, hell, they are always going to vote for the Nat’s he prefers to sure up his vote among the beneficiaries.

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  167. big bruv (13,249 comments) says:

    DPF

    [DPF: I am sure the Green or Labour parties will enjoy getting your support]

    Not me DPF, I am a right wing voter, unlike some here I will always remain loyal to that cause, certain others will continue to vote “Blue” irrespective of the idiotic actions of the govt just as long as it keep the “red” team out of office.

    That sort of thinking gave us Mulldoon.

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  168. dime (9,399 comments) says:

    bruv didnt you vote Greens?

    mate, sometimes youre a light weight.

    National campaigned on a platform of not slashing the public sector. if you recall, brash lost because he said he would slash the public sector and helen screamed “loss of jobs” for a month and people believed it.

    youre thinking short sighted. National have done some good things so far. but going back on their “we wont cut public jobs in our first term” would be political suicide.

    now your comeback is “who cares about political suicide”

    answer – Dime does!!!

    i want this to be a 3 term govt. i dont want National to go back on their word 6 months into their term.

    who gives a fuck about a $20 a week tax cut or whatever it is.

    think long term – National are going to bury labour next election. next election there wont be the “we wont do blah blah” cause they would have earned NZ’s trust.

    remember – as a group, voters are dumb fucks!

    socialists always plan LONG TERM… hence, they eventually get some power (even if they do fuck it up).

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  169. jarbury (464 comments) says:

    burt, that’s certainly an interesting story. It’s somewhat dependant on the other country having lower taxes though, which generally isn’t the case.

    The UK and USA have just put up taxes. Australia’s likely to have to do the same pretty soon.

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  170. stephen (4,063 comments) says:

    kimble, I think your sonic strategy’s worked so far. Easy as it is to just ignore flame wars, one doesnt get much out of them.

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  171. bananapants (107 comments) says:

    Does Kimble’s anti-Sonic rant count as spam? Cos it was that annoying, I think it probably should.

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  172. burt (7,797 comments) says:

    jarbury

    You remind me of that twat Cullen when he was getting all boned up about the prospect of a 39% tax rate in 1999. He said “At 39% this top tax rate is moderate compared to the top rate in the US which is 48%” (it was 48% at the time but has dropped since).

    However Cullen being an intrinsically devious and dishonest prick didn’t finish the story. The top rate of 48% kicked in at $400,000 USD which at that time was about 10 times the $60K NZD threshold Cullen was stroking himself off about.

    Perhaps Aussie will put taxes up soon, but did you notice that when they had strong govt revenue they reduced them rather than waiting till they had no choice.

    The US & Aussie therefore had a tax policy – we had a thief who believed that the art of taxation was to pluck the goose with the least amount of hissing. The prick didn’t care the Goose died of cold over winter as long as he had all he needed to spend to buy the election.

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  173. big bruv (13,249 comments) says:

    Dime

    Thanks for the history lesson, I am devastated to see you join the rank’s of the cheer leaders, did Razor Sharpe lend you a jar to put your brain in for the next three years while you cheer on command?

    Seeing as you are so keen on history you might be able to cast your mind back 25 years to a time that was not unlike today, we faced a very unsure and bleak economic outlook yet we have a government brave enough to do what was right not what was politically acceptable, their actions were the foundations that successive governments built on resulting in our nation enjoying the best economic conditions in living memory.

    That government was a Labour government Dime, the cheer leading you and others here display would have resulted in Muldoon being reelected to power simply because you are blinded by small minded cheer leading and tribal loyalty, bugger the issues just keep voting for “your team”.

    So carry on Dime, call me what ever you fucking like I simply do not give a shit what you or any of the other mindless flag wavers think.

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  174. dime (9,399 comments) says:

    really? 25 years ago… time unlike today…?

    i thought 25 years ago, the glorious Reagan was leading the US to greatness .. as opposed to this week where you had the president say in an interview “we are out of money”

    what was the tax rate back then bruv? 66%?

    would you say we had a protectionist economy back then? do we have one now?

    i know youd like to see homeless people etc… but some of us are still human.

    and i say again – some of us think long term. 3 years without tax cuts? i can live with that.

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  175. dime (9,399 comments) says:

    wreck – “kiwicard” hahaha thats some funny shit dude.

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  176. burt (7,797 comments) says:

    dime

    3 years without tax cuts in a shrinking economy is entirely reasonable. The interesting question is will people accept no pay rises for 3 years as well ?

    Then ask another question – if the company you work for is banking record profits and denying you a pay rise for 9 years will you defend that as well ?

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  177. big bruv (13,249 comments) says:

    Oh really dime, so the economic outlook is all rosy is it?

    The solutions that worked so well back then will work just as well today.

    Oh, one more thing, do you REALLY want to get into a shit fight with me about social issues Dime?….really?

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  178. dime (9,399 comments) says:

    no bruv – the economic outlook is fucked.

    my point was, we arent in the same situation that we were in 25 years ago. sure, some things are similar… but the world wasnt FUCKED 25 years ago like it is now.

    as for social issues – i dont know if you honestly believe what you say. but id rather have some shit bags take advantage of our welfare system, than live in a country that lets people live in absolute poverty.

    if i ever change.. put a fucking bullet in me.

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  179. OECD rank 22 kiwi (2,811 comments) says:

    Labour’s entire 2008 election campaign was based on how you can’t trust John Key

    On the election promise of tax cuts Labour has been proved right.

    Today marks the first broken election promise from Labour-Lite.

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  180. dime (9,399 comments) says:

    OECD – so they should have broken the other promise? and cut the public sector? or would you prefer to have our national debt blow out?

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  181. big bruv (13,249 comments) says:

    The public sector, social welfare, no more money into health (they receive enough as it is, fire a few thousand bureaucrats and they could fund all the operations they need on the existing budget) cut the 43 million bribe to the apartheid party, cut the home insulation packace…..the list goes on and on Dime.

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  182. paradigm (507 comments) says:

    National’s options:

    1) Cut spending. Labour shouts Key is Roger Douglas Mk II. Electorate (who are addicted to welfare) panics, kick out National. We get another 9 years of labour. Many of the changes National tried to make are reversed. Govt gets bigger.

    2) Cut tax cuts. Upset people who have no choice but to vote right wing anyway. Welfare addicted centre vote retained. Key gets wins multiple elections and slowly weans electorate off welfare. We get 9+ years of National. Over that time Govt is put on a diet.

    Which to choose….?

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  183. OECD rank 22 kiwi (2,811 comments) says:

    This isn’t a budget a Don Brash lead Government would have made.

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  184. OECD rank 22 kiwi (2,811 comments) says:

    dime says at 9:06 pm

    so they should have broken the other promise?

    Damn straight!! Reducing spending is always preferable. Why not just push the factory default reset button back to 1999 before Labour started fucking up the economy.

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  185. bchapman (649 comments) says:

    I haven’t seen anyone provide a clear message detailing how we are going to grow GDP and exports. Arguing about the rate of tax cuts is meaningless unless we can develop some high tech industries and value add to our primary exports.
    Hoping ‘the market’ or “China buying our milk” will save us is wishful thinking.
    Getting off your bums are developing a strategy to value add to our exports and training our kids in science and engineering, we need to brand ourselves so we can attract high spending tourists to spend more time here.
    RWC 2011 is coming, lets not waste it.

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  186. LC (162 comments) says:

    When did benefits become ‘entitlements’?

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  187. burt (7,797 comments) says:

    LC

    When we extended them to people earning up to $120K a year.

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  188. grumpyoldhori (2,410 comments) says:

    bchapman good god, I hope you are joking about kids doing science and engineering.
    Just look how well NZ is doing with all those doing media bloody studies.
    Sorry let my sarcasm go then, you are right and I hope we copy the education systems of countries such as Finland.
    But that is probably asking for too much .

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  189. burt (7,797 comments) says:

    Anyone who tells us Cullen left us in a better position than most…

    OK, lets put this to the test. Labour said they would put us back in the top half of the OECD and we went backward. Once we generally agree that the global economic crisis is past the bottom lets see if after all OECD countries have been ranked (after hitting the ‘bottom’) we are in the top half, better or worse than we were in 2008, better or worse off then before we went backward under Cullen.

    That will be the proof of the pudding for Cullen. Do you agree this is a fair test ?

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  190. Banana Llama (1,105 comments) says:

    Science? Engineering? what are these things you speak of, everyone knows we make money by borrowing and spending, that the true driving force behind the economy are shopping malls.

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  191. tvb (4,200 comments) says:

    Do not forget that budget arises out of a Labour Government leaving the cupboard bare. Labour Governments eventually run out of money leaving a big hole with a new set of people doing nothing and with their hands out for taxpayers’ money. Everytime. The public overall understand that but taking the axe to people such as students getting free money would have been nice but the poltiical ground for that wasn’t there. The final solution is to find a constitutional way to destroy the Labour Party.

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  192. Viking2 (11,126 comments) says:

    Fran O’sullivan gets it right. English is devoid of ideas so he has set up a group of advisers to tell him what needs to be done. This mornings post. http://www.nzherald.co.nz/business/news/article.cfm?c_id=1501241&objectid=10575140

    He was always going to be like that. He is an abject failure, was always going to be. Conservative, Catholic, Treasury trained and a trough snuffler of old. No training in innovation, no idea of why and how people are energized.
    Has shafted Keys ambitions and the rest of NZER’s as well.

    Prediction;
    Within 2 years the Australian economy will be running full steam ahead. Consequences for NZ. Lots more of us are going to leave for better climate, much better wages and much less tax. If you doubt me then get to reading the Aussie papers everyday instead of filing nonsense posts and do some thinking about what you read.
    Same old same old.
    No game breaking from the Nats as per usual.

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  193. KiwiGreg (3,170 comments) says:

    The only good thing I can say about the budget is that Cullen would probably have put taxes up (arguably English did but I’m in a generous mood…). Poor quality spending, lack of vision, state crowding out private sector.

    New Zealand will still fail to pay its way in the world (imports>exports, I’m including services dont quote the last 3 months physical trade stats at me); we will still become (relatively, if not absolutely) poorer. As the rest of the world, particularly Australia, recovers from recession these differences will become even more pronounced.

    I get the real politik of managing a country for a re-election, but New Zealand actually needs leadership. Of course New Zealand in the main doesnt WANT leadership so I guess we get what we deserve.

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  194. LC (162 comments) says:

    There’s a book called ‘The confident hope of a miracle’ about the Spanish Armarda. I think the title applies to this budget. An unexpected storm destroyed the Spanish Armada. Bill/John, you had a chance to prepare us for the unexpected storm, a chance to move NZ to a position to weather the future storm. Instead we’ll insulate our houses (which sort of reflects the inwards ‘don’t look outside’ thinking that this budget reflects) Maybe next year something with purpose?

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  195. James (1,338 comments) says:

    What a wierd and silly idea….that the State should produce a budget for its citizens…….with their own money…

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  196. Chthoniid (2,027 comments) says:

    Getting off your bums are developing a strategy to value add to our exports and training our kids in science and engineering, we need to brand ourselves so we can attract high spending tourists to spend more time here.

    Kids don’t do science for the simple reason that it is a dumb career move for most.

    I spent 10 years at university going from BSc to PhD (the PhD took a wee bit longer because I worked some of the time to stop debt getting out of hand). At a financial level, that was really dumb. If I’d left school, got a job in the bank or the like, settled on an ‘average salary’ and got into a real estate rather than a PhD I’d be far better off.

    I’ve got a good salary now but by world standards, scientists in NZ don’t get paid a lot.

    The real hurt comes from the tax & welfare system. Give up ten years of income and you will- despite a much higher salary- not be better off. The reality is that Cullen’s tax and WFF programmes mean I could take a pay-cut of about 50% and my household income would barely change. You can’t justify getting a science qualification in NZ when for most scientists, this will reduce their permanent-income. 5+ years of study at no income to be no better off- and probably worse off- than the leeches driving the property markets- has throttled the participation of young kiwis interest in science-education.

    If you want to make science more attractive, then you can’t use the tax-and-welfare to punish those people who are trying to be innovative and productive, open new markets etc.

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