PM’s 2010 Statement to Parliament

February 9th, 2010 at 2:32 pm by David Farrar

Overall pretty encouraging that the Government is going to pursue some economic reform that will increase the size of the national cake, rather than merely get obsessed with how to divide it up as the left do. If we grow the cake, then everyone benefits in time.

Major points by subject:

Economic

  1. GST increase to 15% under careful consideration – this is code for will be announced in May. This is good, as it will allow taxes on income, savings and investment to reduce, encouraging savings and investment instead of consumption
  2. If GST is increased (and they really have to after not ruling it out) there will be across-the-board reductions in personal taxes, and higher levels of payments for beneficiaries and WFF recipients.
  3. No capital gains tax – good too complex
  4. No RFRM for taxing residential property – also good as could cause real cashflow problems
  5. No land tax – a shame, as I think the one off whack it would cause to land owners would be worth it for the efficiency gains, and also the fact it would bring foreign land owners into the tax base
  6. There will be changes in the Budget around how property is taxed – almost certainly to include getting rid of claiming depreciation on appreciating buildings.
  7. Most government agencies to have no additional funding for several years – hear the PSA squeal.
  8. Changes planned for the way the Crown invests in CRIs
  9. Science and innovation a priority for new spending in 2010 budget – very good.
  10. Holidays Act to be amended as per Advisory Group
  11. Review of personal grievance decisions, and possible amending legislation to give more certainty in this area
  12. Govt to propose through a discussion document that some land in Section 4 be removed from it, and replaced with some land not currently in Section 4, to allow mining in areas with high mineral wealth but lower environmental value. This is probably the most ballsy move.
  13. Govt will establish a Conservation Fund from royalty revenue from mining on crown lands to invest in conservation projects, so more mining means more money for conservation. I like it!
  14. Law changes to remove regulatory roadblocks to water storage and irrigation in Canterbury, and also for the aquaculture industry
  15. Possible law change for capital restructuring of Fonterra
  16. Response to Capital Market Development Taskforce to be delivered in the next week or so
  17. $24 billion of spending in the next five years on capital expenditure

Social Sector

  1. National Standards will be supported by reform to ensure taxpayer funds make it through to schools and students who need the extra support
  2. Changes to early childhood funding to get better support to children currently missing out on ECE
  3. A policy on use of information collected through National Standards to be announced in 2010. Not sure what this means, but so long as they do not amend the OIA, not sure what impact it will have, and will be ropable if they amend the OIA.
  4. Funding changes for secondary schools to modernise, and ensure they can provide more practical and trades skills.
  5. Focus in tertiary education is programmes with over 50% drop-out rates
  6. Whanau Ora to continue to be developed as a new way to fund and co-ordinate social service contracts
  7. Hint that there will be restrictions on funding for tertiary students who keep failing and/or never leave university – presumably meaning the eternal under-graduate.
  8. Benefit reforms that focus on helping people get back to work, while supporting those who can not.
  9. Sickness Benefit criteria and testing to be adjusted
  10. Reapplication requirements for those on the dole for an extended period
  11. Work and training requirements for those on the DPB
  12. A change to the benefit abatement regime to improve incentives to take up part-time work
  13. Legislation to be introduced to reduce harm from binge drinking by stopping excessive proliferation of liquor outlets. That’s just government by slogans, as there is no proof that it is the number of liquor outlets that cause the binge drinking
  14. Two prisons to be opened up to private management

There is a nice stat about how moving 100 DPB recipients off their benefit and into work will save close to $10 million over their lifetime. And moving 5% of DPB recipients whose children are aged over six into work will save $200 million over 10 years.

Overall I give the package a solid B. If the GST was 100% confirmed (I judge it 90% confirmed) and they had gone for land tax also, I would have gone for a B+. And if they left out the nonsense about the number of liquor outlets being a problem I may have even gone for an A- after a few rum and cokes :-)

UPDATE: Phil Goff liked my analysis so much he quoted my “B” grade as almost the first thing in his speech!

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185 Responses to “PM’s 2010 Statement to Parliament”

  1. LeftRightOut (622 comments) says:

    Just one comment, on point 1.

    How is it good to reduce consumption? Fewer people buying my products sees a smaller chance for me to grow my business and employ others.

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  2. dime (10,212 comments) says:

    the 15% GST still scares me. those scumbag leftists will keep it at that level and put income tax back up when they are next in government.

    apart from that, income tax cuts are always a good thing. looking forward to the extra $$$$ id love a 30% top tax rate!

    they are looking into WFF, i guess thats a start.

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  3. Pete George (23,793 comments) says:

    A promising beginning, the proof will be in what is actually done. Quite a bit of what seems like standard waffly obvious stuff in the social section, this will depend on implementation and results.

    Most government agencies to have no additional funding for several years

    As long as this isn’t undone with other spending this potentially means an overdue squeeze on spending.

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  4. Peter (1,694 comments) says:

    Goffy just mentioned your B grade….

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  5. Danyl Mclauchlan (941 comments) says:

    Ooooh – you’ve got a fan on the opposition benches . . .

    [DPF: Well no one can say now I was too nice to the Govt!]

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  6. Brian Smaller (3,966 comments) says:

    they are looking into WFF, i guess thats a start.

    They are looking into WFF and seeing more money spinning through the system. Just let us keep the damn stuff in the first place.

    And, When are they going to repeal the ETS?

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  7. dime (10,212 comments) says:

    lol JK’s being attacked by Goff cause of your B grade!

    ya see a leftist would always give their leader an A no matter what

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  8. Rod (180 comments) says:

    LOL Phil Goff quotes DPF’s B rating!

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  9. sheath (55 comments) says:

    Why is CGT hard/complex? Almost every country has it.

    I was in Canada when it was introduced and it was not that hard. Primary REsidence was excluded. Also property owned before the date it was introduced you could even get valued and CGT applied after than or any capital increase was evened over life of ownership, ie if gone up $10 and you owned it 9 years before CGT tax day and 1 year after 10% of the increase was deemed taxable.

    That would solved some of the problems as then people would look at the value of the asset and risk etc and determine if it was effective use of money to invest in ie rental property vs investing in shares vs smell business vs bank etc. All have the option to gain or reduce over time.

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  10. Pete George (23,793 comments) says:

    I hope they move GST, they have to have something significant to balance immediate tax cuts against. Subsequent governments can increase taxes in all sorts of ways, that shouldn’t be a reason not to do what is necessary now.

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  11. ben (2,279 comments) says:

    More WFF under National? MORE? Outrageous. How can Key say that with a straight face while at the same time complaining about tax rates on labour? WFF is an important source of the very high marginal tax rates he only just said were bad. As always, the trade off between political and economic success laid bare.

    Science and innovation a priority for new spending in 2010 budget – very good.

    How is this good? How? The New Zealand government invests ludicrous amounts in innovation already through NZTE: $500 million last year. Around ONE THIRD of that money was consumed in administering the program! It is an unbelievably inefficient program. I have zero doubt at all that the return on investment is horrible given the near-complete lack of major successes coming from it. Except nobody, to my knowledge, measures this return. If they do it is a well kept secret. Governments are universally recognised as unsuited to allocating resources for innovation – it is very hard to do and introducing political dimension and having bureaucrats throwing around other people’s money guarantees failure. That is the reality. On top of all that, this government expenditure crowds out private investment. Something like $2 million in private venture equity was invested in Wellington in 2008 – pitiful.

    So Key’s idea is to throw more at this awful money hole. How is that good? How?

    More money for conversation? What half the South Island isn’t enough for DoC, they want all of it?

    Ok, private prisons. Nice direction – but trivial.

    Sorry about the grumpy tone, but this is just more government. A government which already consumes 46% of GDP in a country that is already in a major economic hole is going to get even bigger, is going to regulate even more, and is going to put even more people on welfare. That will not help New Zealand catch anybody.

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  12. berend (1,690 comments) says:

    I think this must be unique. While John Key is speaking, commentator responses are picked up and the next minute highlighted in parliament.

    Anyone else in the world who has done this? Kuddos to Phil!

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  13. Brian Smaller (3,966 comments) says:

    Goffy just mentioned your B grade….

    He didn’t really quote a blogger did he? God that man is sad.

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  14. berend (1,690 comments) says:

    ben, welcome to the National Socialist government.

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  15. garethw (205 comments) says:

    So we get a stepchange in our economic performance from adding a few percentage points to GST, changing depreciation rules and making what will have to be minor personal income tax changes given that he’s ruled out everything else and wants revenue neutrality?

    My definition of stepchange is obviously pretty different, that is about as underwhelming as it could get.

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  16. Jeff83 (747 comments) says:

    I give it a B, in that there are some balls being shown, I think the lack of a land tax or capital gains tax with all additional tax collected being channelled into reducing top income rates would have been positive, but I think John’s political nouse has seen this as too much of a hot potatoe. For the depreciation on the buildings to work well more stringent guidance most prob needs to be given by legislation (rather than as now relying on case law) on what constitutes a building and what is a fitting which can be depreciated, at a high rate. At the moment most tax payers positions and the IRD’s official position contained in their latest interpretation statement is relatively at opposite ends.

    Good to see some effort going into sickness benefit / DPB, hoping it will be enough, as the negative effects of both for extended time periods are more than just economic.

    The lack of increases in spending on public departments, whilst had to be done is potentially not the right way. Forcing a cutting of a certain number of staff, so wages can still rise would be preferable than what is going to happen again, public sector workers being heavily underpaid compared to overseas and accordingly leaving the country in rapid numbers (nurses, teachers, doctors, policemen etc).

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  17. NeillR (351 comments) says:

    Surely the first thing they need to tighten up with the DPB is to make any further children ineligible. Otherwise the baby-factories will just keep popping them out every 4-5 years (and certainly before they turn 6) until they’re old enough to qualify for superannuation.

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  18. Hagues (703 comments) says:

    Man Phil Goff is full of shit, glad he’s not going to be PM anytime.

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  19. kyotolaw (48 comments) says:

    Yawn, yawn, yawn.

    All that’s happened is Key has ruled out any real change to the property sector taxation – if depreciation is the only thing to change, it is the most interventionist and least effective method of taxing the sector.

    No mention of aligning tax rates at the top.
    No mention of getting rid of WFF.
    No mention of getting rid of interest free student loans.
    No mention of raising the retirement age or changing superannuation entitlements.

    Bernard Hickey is right here – Key is essentially telling Gen Y to leave the country while they still can.

    What is political capital for if not to be used?

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  20. Jeff83 (747 comments) says:

    O and agreement with WFF – better idea would be tax free threshhold, more efficent.

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  21. berend (1,690 comments) says:

    Jeff83: Good to see some effort going into sickness benefit

    Announced how often already? Nothing new.

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  22. somewhatthoughtful (472 comments) says:

    this is shit. where the fuck is the land tax?

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  23. stephen (3,981 comments) says:

    the 15% GST still scares me. those scumbag leftists will keep it at that level and put income tax back up when they are next in government.

    Or they could require tax to be paid in seashells, so what?

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  24. big bruv (14,217 comments) says:

    Sadly it was no more than I expected from the gutless Neville Key.

    He “might” raise GST (but only if he does not go down in the polls)

    He WILL raise benefits for bludgers at the same time as he made another “promise” to get tough on the same bludgers (again, he will only get tough on the Ure’s and Fullers if he does not go down in the polls)

    No real relief for the middle class Kiwis, the same middle class who have been financially raped over the last ten years.

    What a disappointment, the message Key is sending to our brightest and best youth is to get themselves a one way ticket to Sydney as soon as possible.

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  25. polemic (460 comments) says:

    Well done JK – Again he has tapped into the real sentiments of the battlers and middle NZ’ers.

    Phil Goff is dribbling on about pkts of Weetbix and Bureaucrat CEO’s

    Phil Goff has again gone off on a tangent and missed again the wants of NZ’ers.

    And once again smacked the Maori’s about their schools.

    Does Goff not know what we want or does his socailist roots run so deep that he can continue to tell NZ’ers what is better for them according to the Labour Party.

    Why doesnt Goff listen to the people. — NZ’ers want Tax Cuts and Jobs which will grow the economy and give us real growth.

    Lift the GST and get on with it – NZ will step up on more step and we’ll all be better off.

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  26. Dirty Rat (504 comments) says:

    I like the beneficiary thing and fit to work

    “Can you blog? “

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  27. KiwiGreg (3,278 comments) says:

    So a government that promised tax cuts makes one more or less clear statement on future tax intentions (increased GST) and that’s a “B”?

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  28. big bruv (14,217 comments) says:

    Now for comic relief we have the Aussie Red Russ speaking.

    There is something hilarious about an Aussie trying to pronounce aotearoa in his most PC style.

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  29. polemic (460 comments) says:

    Phil Goff you’ve Failed

    Your chance for the year is focussed on you socialist ideals and still not listening to Kiwis.

    Dont you realise we want jobs and growth.

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  30. Johnboy (17,015 comments) says:

    Specially when he has such a squeaky little castrati voice.

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  31. ISeeRed (236 comments) says:

    “higher levels of payments for beneficiaries and WFF recipients”

    Just what NZ needs to break the downward cycle of rampant welfarism and economic decline. NOT.

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  32. Steve (4,536 comments) says:

    In Phil Goff’s reply he mentioned Australia no fewer than 10 times.
    The man is in the wrong country

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  33. Put it away (2,872 comments) says:

    Who’s that curly aussie freak on the parliament broadcast right now ? Judging by the level of blind hatred for economic growth he has to be a green ?

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  34. Pole (6 comments) says:

    Listned on parli radio, under whelmed, no effective reform on property,
    Who is this dk wad Russel Norman, greeting in his feminine aussie accent in Maori, what a tool…..no-one is shouting him down as they have all gone to sleep…..

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  35. Gooner (919 comments) says:

    I cannot understand why everyone here is surprised there is merely talk of tinkering with no cutting to the core and decent reform.

    Honestly, what planet are you all on? How could you not see this?

    For the first time in 14 months, Goff is right. This is a “more, but better” government speech.

    But go here to read what Goff should really have said.

    http://nominister.blogspot.com/2010/02/speech-phil-goff-should-deliver.html

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  36. garethw (205 comments) says:

    Rule-47-for-Partisan-Blogs: When 80% of commentators spend their time throwing generic insults at the Opposition leader’s response rather than actually discussing the PM’s speech you KNOW it was pretty underwhelming…

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  37. big bruv (14,217 comments) says:

    Since when has the curly haired idiot leader of the Greens/Watermelon been an elected member of the Maori party?

    I despise the Apartheid party and all it stands for but I just will not put up with be lectured by an Aussie communist hell bent on destroying his adopted nation and starting a civil war.

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  38. Richard Hurst (885 comments) says:

    “..there will be across-the-board reductions in personal taxes..”

    Hmmmm. I’ll believe it when I feel it in my wallet. I suspect they will be very gradual and very slow in coming and the full reductions won’t be completed until after the 2011 election. Perhaps I’m being a little cynical I don’t think so.

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  39. Hurf Durf (2,860 comments) says:

    Red Russell talks far too much considering the vote size and importance of the Gweens.

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  40. berend (1,690 comments) says:

    OK Rodney, stop the congratulations, tear into this visionless spend more, and we’re thinking about taxing less National government.

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  41. Pole (6 comments) says:

    Big Bruv, with you all the way, never been so fked off in all my life, that prick Norman can fk right off.

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  42. berend (1,690 comments) says:

    Yep Richard, John Key was very quick in canceling tax cuts, but has never moved quick anywhere else.

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  43. jackp (668 comments) says:

    I was relieved to see key didn’t add a property tax. Unfortunately, our rates will go up an additional 2.5 percent on top of the rates hike the city councils intends to charge us. Also, petrol and food will be going up with gst along with the ETS I don’t think this is a good thing. There was one good thing, whether he does it or not, a freeze on all government agencies budgets. You can say it is a step in the right direction but it is moving very very slowly in the right direction. He could put a 20 percent decrease in budgets but keep the “front lines”. That would squeeze middle management out.

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  44. ben (2,279 comments) says:

    Polemic

    “NZ’ers want Tax Cuts… Lift the GST and get on with it”

    Were you going for irony there?

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  45. wreck1080 (3,999 comments) says:

    This is not a catch up to australia plan. He has tinkered around the edges when everyone knows that hard changes were needed.

    What a joke.

    They were saying gst increase to 15% will bring in 200 million.

    That might allow a decrease the top tax rate to 35% ? Just a guess.

    Very disappointing John.

    This gets a D, since noone could possibly believe that this will achieve a catch up to australia.

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  46. Adolf Fiinkensein (2,703 comments) says:

    Now let’s get our feet back on the ground. Did you idiots really really expect the PM to deliver the May budget today?

    He foreshadowed some pretty major changes.

    1 Across the board income tax cuts at all levels.

    2 Removal of tax dodges for property investors and wealthy WWF rorters.

    3 A major boost for the petroleum/mining industry.

    4 Clamp down on benefits bludgers.

    5 A halt to growth in the core public service.

    6 Solid support for education standards.

    What he did not say was equally of interest. In ruling out a land tax and and an accrued value tax, the words ‘capital gains tax’ were spectacularly absent.

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  47. polemic (460 comments) says:

    No Ben Tax cuts will help everyone and raising GST once again prevents Tax evasion where as personal tax helps those in need the most

    Rodney is on the case again.

    Nz’ers want to be winners- Hear hear Rodney.

    Goff wants to keep being a Bollard crumb collector.

    Why can’t we catch up to Australia.

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  48. Johnboy (17,015 comments) says:

    When effectively you only have a choice between Neville and Goofy (or his replacement) as Glorious Leader suicide starts to look like a seriously attractive option.

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  49. bchapman (649 comments) says:

    More q’s than answers.
    1. What’s happening with Fonterra? Farmers don’t want it floated
    2. Extra money for low performing students but Eductaion budget static. What is being cut?
    3. What’s happening to business tax?
    4. Depreciation gets clawed back when rental properties are sold. How are they going to recover money from landlords?
    5. What’s happening with Transport, Police, Defence, Health, Education ependiture. I can’t any of these departments having expenditure held given what they have announced.
    6. Have the thought about costing ETS emmssions. A pretty big expense coming up I would have thought.

    Everything else we already knew about- not sure anything is any clearer.

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  50. Hurf Durf (2,860 comments) says:

    I missed the last bit of Red Russell’s whining. Did he mention the vaunted Green New Deal? I wonder what happened to that pipe dream.

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  51. big bruv (14,217 comments) says:

    Adolf

    You are a smart guy, so, how come you act like a brainless cheer leader for Labour lite?

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  52. berend (1,690 comments) says:

    Yes Adolf, this idiot had expected that something would be delivered. As promised.

    Instead we got GOVERNMENT SPENDING for sure. And Key is looking at tax cuts. How long is this man going to look? He already cancelled the promised ones, so doesn’t have a track record.

    Even you cannot come up with more than “foreshadowing”. Benefits bludgers is existing policy, they have announced that already, nothing new. And tax cuts? You really think we can have tax cuts while spending more? We’re borrowing 240 MILLION a week right now. And Key promised even more spending.

    We’re not idiots. You can’t spend more then what you have, because one day the chickens will come home to roost.

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  53. berend (1,690 comments) says:

    Hurf, he waffled on on about the new green low carbon economy. If he really believed in that, he would be setting up a business. The middle part of his speech was quite good though, I liked that.

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  54. big bruv (14,217 comments) says:

    It has just struck me what a fucked up little nation this is.

    First we have the government offering a vision statement for the future that consists of nothing more than borrow and hope and “she’ll be right”

    In reply you have a frothing idiot from the past whose only response is a good old fashioned socialist rant.

    Then we have the complete idiot co leader of the watermelon party whose ultimate goal is the destruction of the NZ economy.

    Next we have a man who used to be good value, sadly he is in the midst of a mid life crisis and has his mind on other things.

    Then to cap it all off we (in what we like to call a first world nation) have the leader of an openly racist party spewing her own style of apartheid and hatred.

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  55. Johnboy (17,015 comments) says:

    It only gets worse BB crazy Jim the geriatric shopping trolley inventor is waffling now.

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  56. Adolf Fiinkensein (2,703 comments) says:

    big bruv, because I haven’t got my head up my arse expecting someone to drag me out of the shit before the sun rises tomorrow.

    And just before you all jump up and down, note the word ‘comprehensive’ in the capital gains statement ( which I had incorrectly noted in an earlier comment. Leaves room for a ‘non- comprehensive capital gains tax’ in May. (Probably on residential and commercial investment properties. I’d include farms but I don’t think they’re game.)

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  57. big bruv (14,217 comments) says:

    Adolf

    Nobody expects us to be dragged out of the shit before the sun rises.

    What we do fucking expect is for Neville Key to start doing something about it, the bastard has had over a year to make a start, yet, so far he has done NOTHING at all.

    You were one of Clarks greatest critics, yet Key has changed very little that her government implemented, now you expect all of the rest of us to join you in your brainless cheer leading for the Nat’s.

    No fucking chance.

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  58. Pete George (23,793 comments) says:

    I wonder if this is a preliminary “don’t scare too many horses” smattering of tweaks.

    Or is it signaling tinker, tamer, sold you samer.

    Unless there is more detail about what they will carry on and do next term when they can make different promises and get a mandate for decent restructuring.

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  59. KiwiGreg (3,278 comments) says:

    “And just before you all jump up and down, note the word ‘comprehensive’ in the capital gains statement ”

    Nah that’s standard tax lingo because certain “capital” gains are already taxed.

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  60. MikeNZ (3,233 comments) says:

    The only steps are
    Cut spending, Govt must cut it’s cloth as it isn’t their money, it’s ours (that is those who pay tax!)
    Least tax, make it much more simpler than it is.
    Create the environment for entrepreneurs and innovation to maximise their efforts.
    Deal to laziness and the culture of entitlement, incl WFF.

    Everything else doesn’t attack the core issues.

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  61. OTGO (579 comments) says:

    I’d rate it a C. If he canned the ETS and gave us tax cuts to 30% across the board it’d be a B. Add privatisation of ACC, all benefits to be reapplied for under stricter conditions, end all Maori claims by 2014 and it might struggle into an A.
    Jeez those welfare figures are scary though. 20.8 million per day! $867,500 every hour!

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  62. Fale Andrew Lesa (473 comments) says:

    Wow,

    A “somewhat” Conservative administration arguing for state expansion and this is somehow a positive speech?

    Yeah right!

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  63. Gooner (919 comments) says:

    Adolf, so if there was an incomprehensive CGT that’d be okay?

    An incomprehensive CGT would just be further tinkering, which on reflection is what this speech is all about so he might just deliver!

    National: “more, but better, government”.

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  64. big bruv (14,217 comments) says:

    Bernard Hickey has it dead right.

    ““Key has finally shown his colours. He is a mediocre leader without the vision or the ability to change New Zealand. He is a seat-warmer who is too scared to scare the masses.”

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  65. Lucia Maria (2,651 comments) says:

    I don’t know how many people here can remember when GST was introduced at 10% in the late 80’s.

    In order to make up for it, our income tax was reduced. Back then the Government of the day could afford to get by with reducing income tax and only charging 10% GST.

    Since then both income tax AND gst have both gone up. More revenue to the Government from both sources?

    So why could the Government in the 80’s afford to reduce taxes and have only a 10% GST while as Government today needs a 15% gst?

    Has the cost of living for everyone gone up so that wages back in the 80’s were much higher proportionally than today?

    Or has Government got twice as many fingers in more pies than it did in the past, therefore needs more money?

    Oh, and repeal the ETS, John!!!

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  66. malcolm (1,952 comments) says:

    John Keyless: weak, visionless and keyless.

    – “Socialism by stealth” (WFF) stays.
    – Welfare dependency stays.
    – Un-indexed tax brackets stay.
    – Useless quangos and commissions stay.
    – No target for reduced Government spending.
    – No vision.
    – No hope.

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  67. bchapman (649 comments) says:

    Nice to see conservatives celebrating tax increases. Mind you the inflationary follow on effects will make it feel like a lot more than 2.5%

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  68. bka (135 comments) says:

    “No capital gains tax – good too complex”
    As others have said, what he actually ruled out was a comprehensive capital gains tax, in effect repeating what he has said already; that the family home will not have a capital gains tax on it. This government is not going to slash large amounts of spending, so it is difficult to see how they would find the money to radically restructure the tax system across all bands of income the way he said, flatten the top rate and compensate for GST increases without some form of capital gains tax. He actually devoted a bit of time to going after people who had been using property to favourably adjust incomes so I think that is a pretty clear indication.

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  69. bka (135 comments) says:

    Newsflash – Annette King just said she has quite a lot of respect for David Farrar.

    [DPF: Oh God I am in trouble :-)]

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  70. Dave (2 comments) says:

    Hi Again from the team at http://www.inthehouse.co.nz. Following suggestions from last year we are now hosting all inthehouse video through You Tube. Here is the embeddable code for the PM address from 2pm today… height=”344″>. The You Tube channel is http://www.youtube.com/watch?v=HyCHw_MEI3A&feature=player_embedded#. Please feel free to view, share and enjoy, or not as the case may be.

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  71. polemic (460 comments) says:

    Annette King is quoting your “B” grade too.

    She’s cannot but accept that it was a good speech.

    You’d think the way they are trumpeting you’d(DPF) given the speech a “D” or “E”.

    The have to except that they can’t really knock anything serious in the speech.

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  72. dad4justice (6,594 comments) says:

    Annutte King thinks the cow jumped over the moon.

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  73. big bruv (14,217 comments) says:

    Why the fuck do the Nat’s let Pansy Wong speak in the house?

    She is impossible to understand.

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  74. david (2,194 comments) says:

    Wow DPF, You got quoted also by Annette King at length.

    A pattern is emerging. I think you have them worried David that they will use valuable oxygen singling you out for derision.

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  75. GPT1 (2,021 comments) says:

    Land tax with reduction in income taxes seemed practical and beneficial to me.

    Other point – if there is going to be a comprehensive tax review why not include WFF in their? I would like to see that dialed back as much as possible with commisterate tax reductions so that it there is at least a hint of transparency as to how much tax is being paid. Also more efficient to pay less income tax rather than have the state give you some of your money back.

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  76. backster (2,195 comments) says:

    I was disappointed, no coming to grips with wasteful executive spending, no elimination of Commissions etc. Increased welfarism. As NEILLR points out the DPB has only been tinkered with and the $200 million savings by forcing mothers back to work when the youngest turns six is nonsense, the reverse will apply with more unwanted poor little abused and neglected .brats being born. How can the Pollies not see this. What about the proposed Global Warming Scam taxes, what we gain on any income tax saving will be lost in Global Warming Scam Taxes.

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  77. big bruv (14,217 comments) says:

    Can anybody remember if Goff ever voted for the introduction of GST?

    I must admit that I nearly fainted when I heard him say that he was “always opposed to GST”

    Does he think that the Nat’s are never going to throw that back at him?

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  78. polemic (460 comments) says:

    Oh No Annette and Phil probably don’t know because they never knew what a National Standard actually means.

    In NCEA a B is between 60% to 75% pass isn’t it?

    No wonder that National are bringing in National Standards in Education.

    The Labour Party have endorsed his speech with a 60 to 75% Pass . What an admission !!!!!!

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  79. KiwiGreg (3,278 comments) says:

    “This government is not going to slash large amounts of spending, so it is difficult to see how they would find the money to radically restructure the tax system across all bands of income the way he said, flatten the top rate and compensate for GST increases without some form of capital gains tax.”

    There isnt going to be a CGT.

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  80. GPT1 (2,021 comments) says:

    Bastard, can’t edit. The shame for all to see – I used the wrong there. Ass.

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  81. KiwiGreg (3,278 comments) says:

    “Can anybody remember if Goff ever voted for the introduction of GST?”

    He was in government and under the whip. They all voted for it.

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  82. KiwiGreg (3,278 comments) says:

    “Why the fuck do the Nat’s let Pansy Wong speak in the house?”\

    Because she is a National MP?

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  83. Gooner (919 comments) says:

    GPT1, re WFF, it will be INCREASED, not dialed back, if GST is raised.

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  84. CharlieBrown (1,054 comments) says:

    Got to hand it to John Key. He has managed to get rid of all serious debate on reducing government size, something that even labour as a left wing party couldn’t do… National is really teaching labour a few lesons on how to be left wing.

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  85. Manolo (14,166 comments) says:

    Another golden opportunity missed by empty-suit Key. Higher taxes, more benefits, more welfare, no spending reductions, and so on. Next time someone says the National Party is for less taxes and more individual responsibility, I’ll punch the person!

    The current government has shown its lack of mettle and its true colours. Key and co. are neo-socialists to the core.

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  86. NeillR (351 comments) says:

    From the “Spinners i have met file”:

    Evans says his organisation will recommend that investors stop maintaining their properties, put up rents as much as they can, and sell up if holding onto the property proves unsustainable.
    He said the scrapping of depreciation write-offs could lead to a housing shortage in New Zealand.

    No, you numpty, it will have the opposite effect. Because rental properties will now have to realise a true rate of return (as opposed to being propped up by taxpayers money), prices will fall to a level that will allow a large percentage of current renters to be able to afford to buy.

    The only problem is the government hasn’t gone far enough – but i think i can understand why. Because the economy needs a major overhaul there is a danger of tipping back into recession or even depression if the property sector is hit too hard, too fast. Better to let it down gently by phasing in a number of recommendations over time. I only hope that some of the other ideas from the TWG haven’t been discarded completely, rather put on the back-burner until such time as the market can sustain such ideas as a land tax. Personally, i would have gone rip-shit-and-bust and watched the pigs squeal. :P

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  87. Inventory2 (9,373 comments) says:

    big bruv – Goff was a Minister throught the term of the Lange/Palmer/Moore government. On the basis of Cabinet Collective Responsibility he voted for the introduction of GST in 1986, and the increase from 10% to 12.5% in 1988 (or was it 1989?). If he says otherwise, he is a liar, plain and simple.

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  88. KiwiGreg (3,278 comments) says:

    “I only hope that some of the other ideas from the TWG haven’t been discarded completely, rather put on the back-burner until such time as the market can sustain such ideas as a land tax.”

    Pretty sure “off the agenda” means “off the agenda”

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  89. bka (135 comments) says:

    “There isn’t going to be a CGT.”
    Well maybe not; but in one breath that he absolutely ruled out a couple of things (land tax, and RFRM) and also, by my hearing, “a comprehensive capital gains tax”, and to figure out what that absolutely rules out I look at page 44 of the Tax Working Group report.

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  90. KiwiGreg (3,278 comments) says:

    @ Inventory2 – I’m not aware of ANY Labour MP breaking the whip on the 1980s Labour tax reforms. No doubt DPF will correct me if I’m wrong.

    [DPF: Nope. Goff almost certainly also voted in Cabinet for a flat tax too]

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  91. KiwiGreg (3,278 comments) says:

    @ bka – read pages 5 and 6 of his statement. Land tax, CGT and RFRM are all equally off the table.

    @ NeillR I think the impact of the removal of depreciation deductions will be more nuanced and will depend on a range of factors, including the elasticity of rentals, the marginal residential property buyer and other issues. The most likely predictable outcome is an increase in residential rentals.

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  92. Gooner (919 comments) says:

    John Key has said many times he doesn’t believe a CGT works – it hasn’t slowed property inflation where it is in place around the world.

    Mind you if p45 of the TWG report is correct an incomprehensive CGT could bring in $4.5 Billion. Don’t politicians just love those figures!!!

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  93. Steve (4,536 comments) says:

    GST was introduced Oct 1st 1986 at 10% under Labour
    Increased to 12.5% three years later also under Labour
    Phil Goff was opposed? should have said so then

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  94. mawm (211 comments) says:

    Did I miss something? This was not a budget speech and you are all behaving like it was. Key has indicated some of the directions goverment is going to move – that is all!

    OTOH, it would have been great if he had started with:- ‘we aim to cut goverment spending by 25% and reduce the numbers on benefit by 50%…..’

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  95. Jack5 (5,274 comments) says:

    GST at 15 per cent – another reason to move to Australia, or better, for NZ (or failing that our beloved South Island) to become a state of Australia.

    Australian GST is 10% but goods such as certain medical supplies, postage stamps, unprocessed foods are GST free.Also, according to the web explanation I read, some goods there are input supply taxed meaning that Australian GST is not passed on to the final end-user consumer and the supplier bears the tax as they do not receive input tax credits on this supply.

    Our politicians will have raised GST twice. Why is increasing tax so much easier for democratic politicians than trimming expenditure? Is it because the MSM is open to every whine for the gummint to fix everything? Is it because as a people we’ve lost our moral fibre?

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  96. NeillR (351 comments) says:

    @KiwiGreg
    I doubt that rentals can sustain much more. IIRC, in the last twelve months rentals increased around 4%, so without large wage increases to back them up, renters won’t pay more. If landlords attempt to raise rates you will see more people either shifting back home with their parents, or moving into cheaper accommodation. Its a complex equation, but the fundamentals say that houses are overpriced and at some point fundamentals always win.

    @gooner – i imagine that a lot of people don’t really care whether a CGT stops property inflation, more that it ensures that tax is collected on it. Why is it that one asset class should get such a free ride on the taxpayer, especially when the government insists that it is trying to boost capital markets?

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  97. Jack5 (5,274 comments) says:

    Hickey weighs in, something like – Key backs the property-bubble winners and drives out the young…

    http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10625085

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  98. Andrew W (882 comments) says:

    So Government revenue is increasing, and so is Government expenditure on welfare to offset the rise in prices.

    Totally fucking stupid.

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  99. Manolo (14,166 comments) says:

    DPF said about increasing GST: “This is good”
    You ought to be joking. With that unimpeachable logic (coming from you and the Beehive), why to stop at 15%? If it is good, hike to 25 or 30% and make it even better. Bollocks.

    Your attempt at spinning the GST hike falls is very, very lame.

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  100. Adolf Fiinkensein (2,703 comments) says:

    Kiwigreg, you should learn to read. ‘Comprehensive’ capital gains tax is off the agenda. Bill English stated so a month or so ago on TVNZ7. Ergo a ‘selective’ CGT is still on the table.

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  101. Nefarious (533 comments) says:

    Vote Nefarious for smaller government.

    It’ll only be me but I can guarantee you low taxes and reduced government spending.

    Just don’t piss me off with any lefty whinging or i’ll get all progressive on your arse.

    It’s a fucking sad situation when “The Great White Hype” proves to be just that, another populist pussy.

    I like it Farrar, if WE grow the cake then EVERYONE will benefit in time??? Why the fuck should they if they can’t even bake?? Meth and space cookies don’t count in this competition.

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  102. big bruv (14,217 comments) says:

    The thing that might save Neville Key is that the left insist on being brain dead fuckwits.

    They should be applauding the speech by Key, it continues on with the very worst of Klark’s polices yet you only need to pop over to the standard to see the way the idiots are bleating and moaning.

    Key is vulnerable, he is ready to be taken down more than a few percentage points yet those idiots still think that a rousing old fashioned socialist speech from Goff is going to see the voters flock back to Labour.

    Before Adolph and the rest of the cheer leaders accuse me of treason I have to say in my defence that the only reason I want to see a strong Labour party opposition is because I want Neville Key to be forced to remember that the bugger is leading the National party.

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  103. Steve (4,536 comments) says:

    @big bruv 7.16
    Phil did try his best to be effective, he repeated a lot of phrases which made his reply longer.
    In other words he wasted his time saying nothing. Oh Australia was on his mind …

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  104. Put it away (2,872 comments) says:

    The liquor outlets thing is random. Sounds like something the maori party would come up with. Someone’s done a deal to get the welfare stuff past them ? Sometimes ya gotta swallow a dead rat…
    Incidentally it was Labour that started the liquor outlets crusade http://www.beehive.govt.nz/release/law+commission+do+full+review+liquor+laws

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  105. Steve (4,536 comments) says:

    Phil Goff is a great Leader, just where we want him.
    But yeah, the Govt of the day is only as good as the opposition. JK needs to HTFU

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  106. ben (2,279 comments) says:

    Who cares what Goff did in the 1980s. The fact is Key got up in Parliament today and promised more tax, more regulation, more Working For Families.

    And the leader of the opposition got up and said it wasn’t enough, and bleated that the poor should be EVEN MORE SUBSIDISED than they already are.

    It is like watching idiots shifting deck chairs on the Titanic. New Zealand is already so far behind the rest of the first world, its government is in hoc around 8% of GDP, and even now all the politicians can argue over – because apparently this is all the majority of New Zealand voters are thinking about – is equality.

    Just how far into the ground does this country have to be run before somebody, anybody, starts thinking seriously about doing the things needed to catch up? Just how much top talent has to move to London before the median voter finally takes notice?

    And who the F*CK is standing up for the freedom to not have half their earnings taken and pissed away by other people?

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  107. grumpyoldhori (2,205 comments) says:

    When is Key going to do someyhing about those fucking socialistic landlords, the ones who have shit properties they rent out to the low paid.
    Instead of giving fucking landlords a gift in hand, why not just dump the housng allowance, that will save a bomb of money and drive rents down.
    If landlords go broke oh dear too bad, they should learn to take a joke.

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  108. ben (2,279 comments) says:

    To pick a paragraph almost at randrom from Key’s speech:

    The Taskforce also concluded that there is an opportunity for New Zealand to become a hub for financial services in the Asia Pacific region, specialising in providing high-value middle and back office functions for the funds management industry. The Government is keen to see if this or similar new industries could be developed here and we have asked officials to determine what steps we would need to take to make that a reality.

    This is just the Fatal Conceit. Again. 70 years of the Communist experiment and John Key still thinks officials can plan New Zealand to prosperity by writing laws and asking officials to take action. Jesus H. Christ, it’s barely 30 years since Think Big finally died, yet here we are AGAIN watching a National Prime Minister think government departments can plan our way to success.

    Bollard was right, but for the wrong reasons. Forget natural resources – all the people who think this shit is actually going to make New Zealand better are in NZ and voting, and all the people who recognise its folly are overseas earning triple the wages and don’t much vote.

    Key must know this is horse shit. As Bernard Hickey notes he is selling his soul for three terms.

    Livid, absolutely livid, in case you hadn’t noticed. :-)

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  109. side show bob (3,410 comments) says:

    I was fencing today but thought I would come in and watch old Shonkey’s big speech, will I never learn.

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  110. Jack5 (5,274 comments) says:

    Ben (8.01) is right about the financial hub mirage. There is no chance for NZ in this.

    We’ve stopped talking the time zone advantage crap since it’s plain round-world functions can be run from any modern city with all modern conveniences. Any way, the finance industry tends to follow other industry rather than lead it. That’s a key reason why the biggest banks in the world now include Chinese and Japanese banks rather than the ones of Britain, which let its industry wither.

    Any way do we have enough talent left, now that so many finance-company wizzes are either leaving the country or headed for the slammer?

    I think the sudden discovery of a mineral bonanza in national parks and under conservation land is a similar con. It’s one thing to revise the RMA to allow practical permission. But to talk of a hundred billion dollars worth of minerals waiting to be tapped…

    Any fellow poster care to rent a trailer and drive to Southland and tow back the poster’s thousand tonnes of low-grade friggin lignite? Just what could you do with it?

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  111. mavxp (483 comments) says:

    Where Helen Clark and Michael Cullen increased taxes by stealth (the media never noticed), Key and English are repositioning the NZ tax system by stealth – to change incentives, yet remain fiscally and politically neutral so the media doesn’t bleat too much and stir the people into a frenzy. All going to plan they will regain the benches next election, and by then the economy should be rosier and they can get stuck in without committing political suicide.

    Remember guys, Key and English have their hands tied because the govt is in deficit and its a recession. Massive drastic changes will have shorter pain in a growing economy. In a slow or stagnant economy which we have at the moment the pain will linger long and they will pay for it in the polls. So its tinker only at this stage. The signals however are significant – people will think twice about property investment as tax evasion, and the writing is still on the wall about a capital gains tax of some description. People need to invest in the local sharemarket and businesses which will be of real benefit to NZ, not inflated property prices. Interest free loans to students are being kept, but introducing performance at uni as a check for continuation of government funding will change incentives there. I actually think these guys know what they are doing both politically and economically.

    Next years budget should be more impressive, provided the economy overall is on track.

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  112. malcolm (1,952 comments) says:

    Just wait until next year. Hang on we have a taskforce looking into that. We have NZ’s future in mind. Our 2025 target is really just an aspiration, but now it’s a target again. Blah, blah, blah. Suck on this. Blah, blah, blah. Vote National for a better future. Blah, blah, blah.

    You’re gutless and visionless, John. Piss-off and let NZ have a decent PM. One who understands that there is no honour in being a popular PM of a dying country. None whatsoever.

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  113. Whafe (650 comments) says:

    mavxp = Dam Max, so hope you are correct….. I so want to agree and my thinking goes down your path, but I am yet to really believe that John Key really as the nutz to go through with the tough calls and decisions that need to be made. He still wants everyone to like him and he thinks he can be all things to all people…. National HTFU

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  114. ben (2,279 comments) says:

    rosscaverley: I scrolled down and the quoted paragraph was the second that I read.

    Here’s another quote:

    The challenge for New Zealand is to get more of our firms using science, research and technology to deliver more valuable products and services, which in turn allows them to succeed in competitive export markets and to create new and better-paid jobs for New Zealanders. Science and innovation are therefore key elements of the Government’s economic agenda, both this year and into the future. Our objective is a high-performing public science system which supports economic growth, and a wider innovation system that encourages firms to increase their investment in, take-up, and application of research.

    There is NO WAY that John Key could ever know that more science research and technology is going to add or destroy value, first because firms are highly heterogeneous and what works for some cannot work for all. Additional focus on science comes at the expense of something else, so we can be sure from the get go that Key’s plan isn’t going to work out for some businesses. But this is government. And since when did government officials know more about a business’s needs or an individuals preference than the business or the individual?

    Since never.

    And that is the Fatal Conceit again.

    There is no hope for this country. We will soon be passed by Mexico and Greece and eventually Brazil and Morocco and New Zealand politicians, egged on by a voting population forever happy to vote themselves higher incomes on somebody else’s tab, will STILL be arguing over who gets what share. It is pathetic to be surrounded by so many people who are so willing to take ever more of other people’s money and who have the chutzpah to call that civilized.

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  115. Sean (290 comments) says:

    I waited nine years for this? Pfff. I’m not booking a flight back to NZ anytime soon…

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  116. Pat (76 comments) says:

    Fuck I can’t believe all the pant-wetting from Righties who should know better. Take a deep breath FFS.

    No vision? No boldness? How about some fucking MINING to start with. In the land of the long white greenies, no less.

    Tax reform? Do you really want Hickey’s tax-the-fuck-out-of-property-owners ideas?

    And what better than paying less tax on income and more on consumption – where the consumption part is YOUR choice.

    Working for Families will get a trim from the top down. Cap the rate of growth in WFF and other benefits and within 5 years the books might balance for a change. But you can’t have a slash and burn tax/welfare reform AND expect to get re-elected to see it through. This has got to be a slow-burner.

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  117. noodle (151 comments) says:

    So it would be political suicide for Nat. to de-rail the Maori grievance gravy train? Shame. That’s not what I voted for John Key. You would know that many Kiwis decamp to Aussie because they are sick to bloody death of the ongoing, divisive and bloodsucking racial crap that passes as “redressing the wrongs” of the past.
    The Treaty of Waitangi was a simple and benign thing all those years ago. It has now become something malignant and National cannot or will not call a halt.
    John Key, every thing that you propose or promise will be, in some way, adversely affected by your blindness or opportunism in this critical arena. Sadly.

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  118. GJM (66 comments) says:

    I voted for National as they were going to put taxes down – and all they have down is put them up – ACC, ETS and everything else. Now GST will go up – and Muldoon and Cullen’s Bestest Friend – fiscal drag will mean that even if income tax rates drop now, they soon will ne back where they were before, along with the higher GST take.
    In the meantime, they won’t bite the bullet and nail the Treaty gravy train, the beneficiary gravy train (the opposite in fact), the WFF gravy train, the grossly inflated public service, etc etc.
    The middle class wage earners gets screwed again. Ozzie is looking better and better. If I was single and younger, this post woudl be written in an ozzie accent. but it is getting to the stage where we might go anyway. The kids will adjust.

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  119. Manolo (14,166 comments) says:

    More lies and unkept promises from empty-suit Key: http://www.nzherald.co.nz/martin-johnston/news/article.cfm?a_id=110&objectid=10538381&pnum=1

    Words that have come back to haunt him: “National leader John Key said told a press conference this morning that if National is elected and does a “half decent job” at growing the economy, then increasing GST and the top tax rate will not be necessary.”

    The PM must deliver on his promises or be forced out.

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  120. Reg (128 comments) says:

    I think Key’s speech was politically astute. In politics there is a huge gap between what should be done for the economic well being of the country and what can be done politically. It is far preferable to have Key slowly unravelling the fabric of institutionalised socialism and convincing the people of the necessity to do so, than for him to do what he knows needs to be done in haste and fail to sell it to the voting public, leaving us to be bankrupted by the next labour administration.

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  121. Manolo (14,166 comments) says:

    “It is far preferable to have Key slowly unravelling the fabric of institutionalised socialism and..”

    Reg, who are you kidding? Do you call this the “slow unravelling of socialism”? When the ‘slow’ task is completed, there will no NZ left to save. The country will be economic and morally bankrupt by the policies Key and his ilk are pursuing.

    If you prefer National’s chameleon-like and sell-out strategies over ethics and principles, be my guest. I do not want a bar of it.

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  122. Jim (358 comments) says:

    Major disappointment. Hickey is right. This time I agree with David Slack too, who puts it nicely:

    Will they take advantage of the bloody big gun the Tax Working Group has conveniently wheeled all the way up to the emplacement for them? It has given them a complete rationalisation and justification for them to proffer as they step forward to regretfully but nobly fire the damn thing.
    […]
    So what does that nice Mr Key do with this mighty once-in-a generation opportunity for a step change? He consults the polling.

    He gets up there, stands alongside the mighty gun, pulls out a water pistol, squeezes it and says: “I make no apologies for making a few of you a bit wet.”

    Brilliant.

    Key is a wuss.

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  123. expat (4,050 comments) says:

    Pat, Reg,

    Totally agree.

    Unravel the cost centre that is NZ’s current socialist blackhole.

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  124. Reg (128 comments) says:

    Manolo; you and I know what needs to be done. Actually so does John Key. But if John did it like you and I wished, a majority of NZers conditioned by a decade of socialism would,be taken out of their pathetic little comfort zones and Key would run the risk of losing the next election. I rather have a cautious Key than a rabid Clarkite.

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  125. queenstfarmer (782 comments) says:

    Jack5 – you asked the key (no pun intended) question: “Why is increasing tax so much easier for [Kiwi] democratic politicians than trimming expenditure?”

    Because a very large number of NZ’ers, including many National voters and self-described “conservatives”, have become weaned on welfare, handouts and subsidies. It will take many years to try and roll that back. Going cold turkey is not a smart choice. There’s a big difference between “spending” political capital and chucking it on a bonfire.

    Key is playing the long game. He is thinking 3 terms out.

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  126. CharlieBrown (1,054 comments) says:

    Reg – “It is far preferable to have Key slowly unravelling the fabric of institutionalised socialism and convincing the people of the necessity to do so, than for him to do what he knows needs to be done in haste and fail to sell it to the voting public,”

    That argument is completely wrong. History shows that needed economic change can happen quickly without a government being thrown out at the next election… concider the following examples:
    * Rogernomics – Two terms in gov’t, alot of the “radical” changes are still in place
    * Ruth Richardson – National survived the next election, however they did a typical national thing fearing change and got rid of her after that…. but they got re-elected
    * Ronald Reagan – Two terms in the US, with George Bush another republican being elected following his two terms
    * Maggie thatcher – 15 years

    The above scenarios prove that it isn’t political suicide to make the necessary changes far quicker than what you say.

    John Key had staggering amounts of political capital, alot of this built on the foundations Don Brash laid for him. However JK seems to have his own private agenda.

    Judging by the fonterra comments, he is going to help his good friend Mark Weldon (typical political cronyism) and effectively force Fonterra to list on the NZX… and JK knows that farmers cannot do anything about it.

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  127. CharlieBrown (1,054 comments) says:

    To follow up from my previous comment. All the above scenarios were of governments that made the necessary changes early on in their term. So don’t expect John Key to eventually make the changes required (eg, cut gov’t spending significantly)… he won’t.

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  128. CharlieBrown (1,054 comments) says:

    rosscalverley – what is good business sense?

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  129. malcolm (1,952 comments) says:

    Good comments, CharlieBrown.

    Unless there’s a major calamity, the new government will naturally get two terms before the voters even think about having Labour back. Better to make the radical fixes early and hope some of the benefits are apparent by the end of the second term. And John Keyless has the ability to communicate the need for change.

    John Keyless is a gutless man and a gutless PM. Seriously pissed off.

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  130. CharlieBrown (1,054 comments) says:

    Fonterra is a co-operative… the gov’t should not be forcing any changes on the supplier/owners. Farmers best interest aren’t necessarily the same as the best interests of city dwelling shareholders… let them choose whether they want to list.

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  131. freethinker (677 comments) says:

    mavxp (138) Says:
    February 9th, 2010 at 8:45 pm

    Agreed but it cannot be political suicide to reduce govt expenditure to 2005 levels over 5 years thus giving hope that Dr Bollocks and Labour’s defeatism of not being able to eliminate the income gap with Australia is pisplaced. I recall the christchurch inventor of the personal powerpack flying machine – AKA The James Bond flying machine saying NASA didn’t tell us we it couldn’t be done so we did it – and withouth the vast resources of Uncle Sam – just Kiwi ingenuity and our shed.FFS National cut govt expenditure or else my vote goes to ACT – both of them.

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  132. malcolm (1,952 comments) says:

    John Keyless needs to sort out the bankruptcy of our bloated government and welfare dependency before he starts telling the owners of Fonterra how to structure their business.

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  133. CharlieBrown (1,054 comments) says:

    “Unless there’s a major calamity; I believe we have had it. It was the recession, so this is rebuilding. Ergo, this is Government 101.”

    The calamity had already happened by the time national was elected… further strengthening the opportunity for change… FFS, all they had to do was say it was an economic necessity due to the recession and the forecast deficits to cut government spending.
    The recession should have been a reason to cut government spending, not an excuse not to.

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  134. malcolm (1,952 comments) says:

    malcolm, he may do so after you stop being childish with the keyless…

    It is childish, but given the man’s performance I think it’s also apt. So I’ll stick with it. These aren’t letters to John Key. We’re discussing his inaction, at a time when NZ needs change and he’s failing to give us any – while simultaneous bullshitting us about his great aspirations for NZ.

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  135. Pat (76 comments) says:

    “…or else my vote goes to ACT – both of them”

    Good. Maybe they can get to 5% so the Nats don’t have to give the bunch of feather-weights a free run in Epsom so they can avoid extinction.

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  136. Anthony (768 comments) says:

    I agree with Sheath – taxing capital gains is not complex and certainly not if done in a simple way like taxing realised gains. I hope Adolf is right and taxing realised gains hasn’t been ruled out although just heard Peter Dunne on the radio saying it was only an envy tax and complex, etc. He has agreed with me in person that taxing capital gains is fair but said it was political suicide. Certainly, he won’t be getting my electorate vote.

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  137. burt (7,424 comments) says:

    I know the Douglasonians will gun me down, but I think we also need to consider various rates of GST. It’s hard to argue a tax of 20% on nonessential items (eg speed boats) with a zero (or low) rate of life’s essentials. (eg fresh produce) The complications in accounting and managing variable rates are largely overcome by the quantum advances in point of sale technology since we implemented a single rate for simplicity of administration in the 80’s. That simplification was and is beneficial but are we talking about reforming the tax system for fairness or are we just tinkering. Tinkering is so Cullenesq.

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  138. Shunda barunda (2,986 comments) says:

    “# Govt to propose through a discussion document that some land in Section 4 be removed from it, and replaced with some land not currently in Section 4, to allow mining in areas with high mineral wealth but lower environmental value. This is probably the most ballsy move.”

    It could also ultimately be the most destructive event for our natural heritage in decades. Have you met many local miners DPF?
    And any way, who decides what is and isn’t environmentally valuable?.
    Things can look great on paper but at the end of the day the guys doing the mining still have to give a shit and I can assure you that they don’t.
    It won’t work, vandals can’t be reformed.

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  139. libertyscott (344 comments) says:

    Phil Goff would be proud to make the same speech if he were PM.

    The state will grow, tax as a proportion of GDP will be static, and freezing spending “except” means nothing more than this government is about not making things as bad as Labour would have.

    The left will scramble around to find ways to label this new-right/neo-liberal, when it is nothing of the sort. It is conservative status-quo, swallow almost all Labour did, and don’t change things.

    Quite simply, if you want government in NZ to reduce the size and role of the state, you wont get it voting National. If you think most of what Labour did was good, and you want to take a three year break from it, then vote National.

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  140. mistywindow (26 comments) says:

    C- for effort.
    A+ for gutlessness.

    Shuffling the deckchairs on the Titanic.
    Fiddling while Rome burns.
    Choose your own cliché.

    John Key has the political capital to make real change and he’s blown it. I’ll continue to pay to education my grandchildren as Australia’s nation builders.

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  141. Viking2 (11,672 comments) says:

    No One’s said it yet but here’s what Blenglish and Key should do if they were principled. about incomes and taxation.
    Personal Tax rates 30%
    Company rate 30% Trust rate 39%.

    Why, because presently income is sheltered behind trusts to such a degree that one can assume a minimum wage and therefore take advantage of the 19% rate whilst getting tax free distributions from a trust that pays only 30%.
    Yesterday there was a report(which I now can;t find) about the IRD appealing a tax case against two people in Christchurch who(quite legitimately), rearranged their affairs from individual taxpayers to become self employed within a company, paying themselves minimum wages to avoid the top rate. The judge previously ruled that they were entitled to do this and that the tax laws prescribe no minimum wages the must be paid.
    Now thrusts are worse than this for trust can shelter all sorts of earning on which they pay the lower tax rate and the persons benefiting from the trust proceeds need declare nothing despite receiving large sums of money that with higher tax rates for trusts would then become income in their hands.
    There is nothing new about this, it is a device that has been used to minimize taxable income for yonks. Farmers have used it to get university subsidies for their off springas one example. It is widely used currently to benfit from WFF and those that
    don’t like WFF this is where your vitriol should spent, on those that do earn in the higher levels but have rearranged their affairs tocollect the WFF. Its not what was intended but its what people do.
    So Trust rate 40%.

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  142. dad4justice (6,594 comments) says:

    Yes misty, Australia will be the big winner after this pile of horseshit from a weak Jonkey. New Zealand is beyond repair unless you are a curly communist or a magpie maori. Everybody with an ounce of common sense can see that this government are febble and two faced pricks.

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  143. ben (2,279 comments) says:

    Rosscalverly: you, sir, are a fool.

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  144. KiwiGreg (3,278 comments) says:

    “Fonterra is a co-operative… the gov’t should not be forcing any changes on the supplier/owners.”

    Of course you are correct. At the same time the government should also immediately strip Fonterra of all of its monopoly quota rights as well.

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  145. KiwiGreg (3,278 comments) says:

    “hard to argue a tax of 20% on nonessential items (eg speed boats) with a zero (or low) rate of life’s essentials. (eg fresh produce)”

    It’s actually very easy to argue against it. Who decides what’s essential and what isn’t? As soon as you create a boundary you will create unintended impacts (for example as a kid I well recall all the bags labled [in small letters] “School bag” because “school bags” unlike other bags, were exempt from sales tax). Complexity at collection and payment is always borne by the business doing the collecting so that is negative for business.

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  146. Pete George (23,793 comments) says:

    Mr Key has delivered not so much a step-change as a stutter.

    I’d call it more of a shuffle. I’m hoping that he will learn to lift his feet by budget time.

    The speech wasn’t visionary, more like preparatory. Maybe holding back to more contentious moves so they can be done and dusted in one hit at budget time. Hopefully….

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  147. Flashman (179 comments) says:

    Key simply floated a few indicative tweaks so that the pollsters at the call centre can work the phones to drift net some feedback for later consideration. Government by Focus Group – don’t you just love it?

    How’s that New Vision for New Zealand of yours coming along John?

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  148. Pete George (23,793 comments) says:

    Ok, this is more promising:

    Wait patiently for three months for the real oil in the Budget before passing judgment on the Government’s latest and seemingly insipid prescription for shifting New Zealand’s sluggish-performing economy into the growth fast-lane.

    That is the message from Government insiders. Only then, they say, will the exact extent of sweeping tax cuts planned to take effect from this October become evident.

    http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=10625260

    Yesterday may have been some carefully laid out PR.

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  149. Crusader (327 comments) says:

    OK, all you lefties with the value judgments on individuals’ purchasing decisions….

    At 12.5% GST content on a $200,000 jetboat is (1/9 or purchase price) about $22,000.
    compare with GST content on $20 worth of fruit/veges is about $2.20.

    Raise GST to 15% and the jetboat goes up to 204,400. Now the “rich prick” is stung for an extra 4 grand taking his GST component to $26,400. Quite a contribution.

    While down at Funky Pumpkin, the battler paying $20 for the fruit and veges is now paying $20.44.

    All this hoo-ha from Labour about an extra 44 cents on the vege bill?

    The Lefties will still go on about how raising GST rapes the poor to pay the rich, blah blah blah. They know this to be nonsense, and it is just disingenuous for them to keep on spouting such krap.

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  150. david (2,194 comments) says:

    i’m more inclined to think that this is part of a longer game.

    John Key et al are and will position NZ over the next 22 months without scaring the horses excessively. This will ensure a second term and there will be another 100 day plan (remember that – most have forgotten already) in which a bunch of preplanned and relatively radical changes will be rammed through while everyone is thinking about their Christmas turkey dinner.

    I think key is actually herding cats here and his timetable is the three months following the next election as the time to slam the gate.

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  151. Scott (1,807 comments) says:

    I like most of what’s being offered in the budget.

    My big concern is raising GST to 15%. I appreciate the economy is not in good shape and we need to safeguard government revenue.
    However my question is this — if we get good times again would consideration be given to lowering the rate of GST?

    I just believe we pay too much tax generally and we rely on the government too much. I would like to see more individual and community responsibility, a general commitment to a lower tax regime over time, and smaller central government.

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  152. mpledger (425 comments) says:

    “Legislation to be introduced to reduce harm from binge drinking by stopping excessive proliferation of liquor outlets.

    That’s just government by slogans, as there is no proof that it is the number of liquor outlets that cause the binge drinking”

    It’s impossible to prove but there is reasonable evidence to suggest that drunkeness and amount consumed is associated with the density of alcohol outlets – see this Auckland study…..

    Addiction. 2008 Oct;103(10):1614-21.
    Density of alcohol outlets and teenage drinking: living in an alcogenic environment is associated with higher consumption in a metropolitan setting.
    Huckle T, Huakau J, Sweetsur P, Huisman O, Casswell S.

    ~~~~~~~~~~~~

    For a constraint based argument it seems reasonable.
    In the 2005 National Alcohol Survey, about 25% of drinkers aged 18-24 get drunk (self-report) at least once a week.

    If there were no outlets selling alcohol then that level of binge drinking wouldn’t be sustainable. (Who could make that much alcohol without being found out by the police?)

    As the number of outlets increases from zero then there would be expected to be increasing binge drinking until you get to some sort of threshold where alcohol is so freely available that adding another outlet won’t change consumption.

    I’d say we are well past that threshold and that reducing alcohol licences by even 20% wouldn’t change things to much (considering that since the 80’s the number of licences has increased, IIRC, by 400%).

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  153. Pete George (23,793 comments) says:

    OK, all you lefties with the value judgments on individuals’ purchasing decisions….

    I’m usually labelled a lefty here (when they are being nice).

    I think GST should go to 15% – and I think Goff sounds like a joe hunt going on about the poor being hit hardest.

    My understanding of it is GST goes up, WFF and benefits go up a little to balance the average affect to zero for “poorer” people, rorts and avoidances are clamped down on, and top tax rates come down to give incentive to:
    a) earn more
    b) invest more

    Yes, most people who earn more will gain more. That shouldn’t disadvantage lower earners (who have been given greater gains already under Labour), just give them more reason to aspire to higher incomes.

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  154. kowtow (8,936 comments) says:

    Capitals gains tax too complex,rubbish.

    Almost every real country in the world taxes profit on sale of non family home.NZ doesn’t cos so many politicians and “ordinary” NZers invest in property.

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  155. centreforward (32 comments) says:

    Generally a good effort but perhaps too timid – esp in regards to no land tax. A universal land tax – even one set at 0.1% would have at least broadened the tax base, increased efficency and brought in overseas land owners.

    The GST rise to 15% is a good move – puts the incentive on investment rather than consumption. Low income households will see benefit increases, adjustments to WFF and there has just been a raise in the minimum wage. Also the government has not gone about reducing government spending.

    Finally the promised income tax cuts might finally arrive. The proposals will allow kiwis to choose what happens with more of the money they earn. I had hoped for 27% top rate but 30% would do until after the next election. 33% would be too easy for a future government to bump back up to the current rate again.

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  156. excusesofpuppets (132 comments) says:

    I’ll just wait and see if WFF benefits go up when GST goes up. I have my doubts that this government will actually do it.

    Starting to distrust this government now, a real shame. I had such high hopes.

    And now they are going to mine National Park? I’m not a lefty green party supporter, but even I know that mining National Park is 100% Pure Bullshit.

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  157. nickb (3,696 comments) says:

    I am no great fan of John Key, but I do find it highly amusing how upset the media are that the “rich are going to get showered with tax cuts”. They mention the figure the average worket will get, and then casually comment that “John Key would receive $219 a week”.

    Well, this is how it works in a progressive tax system. I wish people on the left would shut the fuck up and understand how huge a proportion of tax the wealthy pay. Most Labour supporters would pay zero or negative income tax once jandouts like WFF are factored in.

    Is there were no “rich pricks” in NZ, who would fund Labour supporters’ accomomdation supplements, benefits, wFF ,healthcare, schooling etc etc..

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  158. Dobbie (33 comments) says:

    Personally I liked yesterday’s statement. I thought it was clear and concise and showed some leadership. Regarding the debate around mining national parks I wish they’d stop spinning though. ‘Key-hole’ mining means they go in through a small entrance hole and then take out hectares of land, collapsing the mine shaft as they go! It’s like a dummy-bullet – makes a small hole going in, but a big hole coming out! I also can’t wait to see the consultation document. Keen to find out exactly what they think the benefits will be to the NZ economy. After all, $25 billion in mineral wealth does not equate to $25 billion benefit to the NZ economy.

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  159. Dobbie (33 comments) says:

    I meat ‘dumdum’ bullet, not ‘dummy’ bullet. As in ‘dumdum’ policy.

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  160. drinks-after-worker (47 comments) says:

    Looking forward to Farrar blathering on about how the Nat’l Govt has a mandate to raise GST. Will I have to wait long?

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  161. MikeNZ (3,233 comments) says:

    Where are we going to though, whats the game plan?
    I realise he’s little stepping and it’s no wonder with the poor bleaters moaning about the rich pricks on 38%
    but until we let loose our entrepreneurial people we are going nowhere.
    and providing we clobber state spending.

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  162. CharlieBrown (1,054 comments) says:

    # KiwiGreg (982)

    “Of course you are correct. At the same time the government should also immediately strip Fonterra of all of its monopoly quota rights as well.”

    Its a monopoly that would quite happily give up selling in NZ… in fact, it makes no money in NZ as its milk is sold below cost. LEts give Fonterra the right to choose where it wants to sell its product!

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