Please translate

April 15th, 2010 at 9:00 am by David Farrar

The Herald reports:

Pushing the line that the Government’s tax changes would “benefit the few, not the many”, Mr Goff said the Government’s promise that taxpayers would be compensated for any increase in did not stack up.

“You are going to get a one-off compensation for GST in advance. But what you know is that might barely meet the cost of GST, but then it will run out. And in a couple of years’ time, there won’t be the compensation, but there will still be the GST.”

I’ve read this many times, and still don’t know what Goff means. The increase in superannuation does not last for a year only. The Government doesn’t take it back at the end of the year. And the tax cuts lift after tax wages which will lift super permanently.

A Grey Power delegate rose to his feet, saying he loved what Mr Goff had to say, but asked if it meant that he would be reversing the GST increase if he was elected to Government.

Mr Goff replied: “I know the answer you want to hear to that. But I’m going to give you an honest answer: I can’t tell you at this point.

“If I was to promise you I could do that, without knowing whether we will have the financial means to be able to do that, I would be misleading and I won’t do that,” he said.

That is a no, in other words.

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55 Responses to “Please translate”

  1. krazykiwi (9,189 comments) says:

    Pushing the line that the Government’s tax changes would “benefit the few, not the many”

    And therein lies the root of so much of what’s wrong with our national psyche. It’s not up the government to evenly distribute benefit and fairness across the population. It’s up to each of us to make the best of what’s available rather than sitting on our arses and waiting for state-delivered equity to arrive.

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  2. Redbaiter (13,197 comments) says:

    “A Grey Power delegate rose to his feet, saying he loved what Mr Goff had to say, but asked if it meant that he would be reversing the GST increase if he was elected to Government.”

    Most NZers cannot do maths. If they could, they’d never ever elect a socialist government. Superannuitiants need to face the cold hard truth- neither Key nor Goff can save them from their fate, one that they have brought upon themselves by election after election, voting for idiot power obsessed politicians.

    These politicians ( Jim Anderton is a classic example ) bought the votes of fools, and as it takes two to tango, there were fools auctioning their votes to Anderton. They all danced about in a frenzy of self gratification, totally blind to the future.

    Now they must pay the piper. Brace yourselves for a dose of reality Greypower.

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  3. Pete George (23,354 comments) says:

    I puzzled over that Goff statement on compensation running out too. The only thing I can think of is if Super wasn’t indexed and fiscal creep overtook the boost – or if in the future the government lopped off the compensatory increase. I can’t see that happening.

    So is Goff confused? Or deliberately confusing – saying something that he hopes will push the right buttons for some but it doesn’t actually mean anything concrete? Or misreported? That is the most logical explanation for an illogical statement.

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  4. homepaddock (434 comments) says:

    If GST goes up income tax will come down. Superannuitants will not only get a compensation for any rise in GST, they will also gain from the tax decrease.

    Superannuation is based on the average after tax income, if tax levels go down the after tax income increases and therefore superannuation does too.

    If they have income other than super they’ll also benefit from less tax on that.

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  5. Nick Archer (137 comments) says:

    Just shows how spineless Goff is, he has criticised the govt for promising not to increase GST before the election and subsequently moving to do so, yet he says they can’t promise to reduce it back down to 12.5% based on the same arguments that Bill English is giving for bumping it up to 15% (economic circumstances etc).

    Also on Greypower, I tuned into Morning Report this morning just before leaving for work and the Greypower person talking about the changes to the tax system etc didn’t make any logical or coherent sense what soever…

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  6. big bruv (13,571 comments) says:

    I dunno about that Redbaiter.

    The greedy grey power group are about to become a huge voting block given that the baby boomers are starting to retire.

    As we have already seen the baby boomer generation are the most selfish generation we have ever seen, they know the power they have and the bastards will not be afraid to use it.

    Like it or not there is not one party (save ACT) who would be brave enough (if they did not have a joke of a leader) to tell the old greedies that they have are not going to hold the nation to ransom.

    So, we are left with at least twenty years of pandering to these greedy old bastards, the rest of us will be the ones left picking up the tab.

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  7. m@tt (613 comments) says:

    “If I was to promise you I could do that, without knowing whether we will have the financial means to be able to do that, I would be misleading and I won’t do that,” he said.

    Of course it would have been easy just to promise something, perhaps a tax cut north of $50, then reneg later…

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  8. MikeNZ (3,234 comments) says:

    Pete
    So is Goff confused? Or deliberately confusing – saying something that he hopes will push the right buttons for some but it doesn’t actually mean anything concrete? Or misreported? That is the most logical explanation for an illogical statement.

    I think he knows exactly what he is doing.
    I think he is a liar as a result.

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  9. Redbaiter (13,197 comments) says:

    BB- There is no money. Nothing can change that, and National’s borrowing and continuance of the delusion that there is, will only make things much worse in the long term. No matter which way these fools who see government as their meal ticket vote, they’re fucked. There is no money.

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  10. Angus (536 comments) says:

    Social security and welfare – Core Crown Expense Tables:

    2004 – 14,252 $mil
    2005 – 14,682 $mil
    2006 – 15,598 $mil
    2007 – 16,768 $mil
    2008 – 17,877 $mil
    2009 – 19,475 $mil
    2010 – 21,139 $mil (forecast)
    2011 – 22,114 $mil (forecast)
    2012 – 22,925 $mil (forecast)
    2013 – 23,572 $mil (forecast)

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  11. scrubone (3,090 comments) says:

    He reminds me of the guy who pointed to the size of the student loans at the time ($3b I think) and the size of the surplus (which was, at the time, the same) and stated that that was proof that the government was taking from students to create the surplus.

    I then patiently explained the difference between capital and income.

    The GST increase is a one off, but will be with us forever. So will the compensation. So Goff’s trying to confuse people by emphasizing the “forever” aspect of the increase, but the “one off” aspect of the compensation.

    Labour just thinks we’re all stupid, and National’s copying.

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  12. Auberon (873 comments) says:

    I listend to Goff talking to Sean Plunket on Notional Radio this morning and he also pulled out a quite stunning projected statistic as a means of suggesting oldies wouldn’t be adequately compensated. That was that while the government might increase benefits 2% to compensate for a GST hike, inflation in this country was due to be 5% by the middle of this year. He said Westpac had predicted this. But have they? That would suggest a spike in economic activity which (while things are thankfully heading in the right direction) isn’t occurring from where I’m sitting.

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  13. big bruv (13,571 comments) says:

    Red

    A lack of money will not top the Nat’s and Labour promising to improve benefits for the old greedies, they will simply raise taxes to pay for it.

    The reality is that the grey power group are now entering their most powerful stage, as we have seen from them in the past it is all about them and all about what they can get out of the tax payer.

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  14. aardvark (417 comments) says:

    When it comes to tax you have to be careful that “the powers that be” don’t rip you off.

    I blogged today on just how the IRD is skimming taxpayers to the tune of millions of dollars a year. How do they do it?

    Well let’s just say, if you tried the same tactic with the IRD then you’d be facing a jail-term but they get away with what amounts to fraud simply because they *are* the IRD, the most powerful entity in the land.

    If challenged, I’m sure they’ll say “it was just a mistake” but if that excuse doesn’t protect taxpayers from the penalties and interest associated with filing a false return, I don’t see why the IRD should be granted immunity from what should be some repercussions for this attempt to rip off taxpayers by tricking them into paying more than their legally required amount of tax.

    When it comes to tax, it’s not just taxpayers who play dirty sometimes.

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  15. wreck1080 (3,820 comments) says:

    Goff is baffling with bullshit again.

    He is telling blatant lies, with the expectation that people will believe him because he is the labour leader.

    In the old days (pre internet), he probably would have got away with it.

    Unfortunately for Goff, in the days of internet his words are captured , distributed , and analysed by people such as DPF.

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  16. Shunda barunda (2,973 comments) says:

    For me personally, increasing GST is going to have a negative effect on the profitability of my business.

    My clients often have a limited amount of money to spend and that includes GST. Raising it will ensure the fat checks I write the govt every 2 months will get fatter directly proportional to my thin wallet getting thinner!!

    GST is not as fair as everyone thinks it is.

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  17. aardvark (417 comments) says:

    At the risk of being a link-slut I’m going to point to one of my own highly relevant columns. I think the government may have underestimated one effect of hiking GST — increased personal direct imports for items worth less than $400.

    In this column [url=http://aardvark.co.nz/daily/2010/0412.shtml]Tax dodging via the net[/url] I highlight how hiking GST just makes direct importation via online purchases a far more attractive option for consumers. Such direct-imports come straight through customs with no GST, duty or other charges — providing they are worth less than NZ$400.

    How do local retailers compete with this kind of competition if, every time GST goes up, their product rises in price but the direct imports don’t?

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  18. Redbaiter (13,197 comments) says:

    “A lack of money will not top the Nat’s and Labour promising to improve benefits for the old greedies, they will simply raise taxes to pay for it.”

    They can’t “raise taxes” when no one is actually paying tax, or the few that are are driven off shore or into bankruptcy. Tax can only come from productivity, and far too many NZers are employed in non productive jobs, and therefore not only not able to produce tax, but existing as a serious millstone to those that do.

    Its a situation that can only have one real outcome, (see Greece for one example) and the only real question is when will that outcome arrive.

    The longer it takes for reality to hit home, the harder the hit will be.

    In the meantime, NZ’s elected representatives keep lying to the country in spades, because most of the population is too jaw droppingly stupid (and uninformed by a corrupt media of course) to do anything but accept their lies.

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  19. RRM (9,670 comments) says:

    Meh, it’s Phil Goff.

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  20. grumpyoldhori (2,416 comments) says:

    Shunda barunda come off it, GST is neutral to business costs unless you try it on by claiming the GST back from a dozen sex workers a month.

    Big bruv, ACT ? tell me you are joking, what is their party motto, we are entitled, as that old bastard Douglas ranted on about ?
    As did Hide.

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  21. Manolo (13,517 comments) says:

    “If I was to promise you I could do that, without knowing whether we will have the financial means to be able to do that, I would be misleading and I won’t do that,” he said.”

    This shows Goff is as good liar as empty-suit Neville Key who promised no more new taxes before the last election. Both, the PM and the leader of the Opposition, are socialists at heart who would love to tax us to the hilt.

    Shame on these mendacious politicians.

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  22. backster (2,124 comments) says:

    The proposed tax cuts will be illusory once the ETS taxes are added to Electricity and Petrol on the 1st July. Those costs will filter down through productivity costs negatively effecting our standard of living. Politicians with all their perks will be sheltered from reality and alone will be enjoying the beneficial income tax cuts they have introduced.

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  23. Murray (8,842 comments) says:

    Phil who now?

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  24. burt (8,043 comments) says:

    Big Bruv

    said re: Grey power.

    it is all about them and all about what they can get out of the tax payer.

    Well of course it is, these people have been told (promised) by successive govt’s that if they pay high taxes now they will be looked after in their sunset years. The problem really is that the next generation don’t like the idea of supporting the oldies like the oldies were conned into doing when they were young.

    If you were promised something then told you can’t have it would you just roll over ? I personally think they were crazy for ever believing the politicians in the first place, but hey we can’t change that now.

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  25. burt (8,043 comments) says:

    Big Bruv

    You should hear my mother moan about how poorly she is looked after with GRI, how much tax she paid during her life, how much tax my dad paid and how unfortunate the long wait on a waiting list was considering how much they had contributed to the country over the years. She still votes Labour though… she might be angry but she hasn’t learnt a thing !

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  26. krazykiwi (9,189 comments) says:

    @backster – True. The only legislation passed faster that a new tax, is that of politicians granting themseves an enlarged retirement trough.

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  27. tvb (4,261 comments) says:

    Perhaps Phil needs to explain why the last increase in GST to 12.5% involved NO compensation and he supported that so what has changed – except the National Government IS compensating people for that increase. When it comes to tax increases the Labour Party has a very bad track record and over the last 25 years Phil Goff has his share of the responsibility.

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  28. burt (8,043 comments) says:

    tvb

    It is different when Labour do it. Labour good, National bad… remember the colour of the party logo is what makes the difference, not the actions or the policies.

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  29. Graeme Edgeler (3,277 comments) says:

    The increase in superannuation does not last for a year only. The Government doesn’t take it back at the end of the year.

    I think it translates something like this: for a married couple National Super is statutorily set at 66% of the average full-time take-home pay. National are promising to increase what pensioners get this year, but in a few years time, the statutorily mandated 66% of the average wage will have kicked in again, GST will have gone up so prices will be higher, but pensioners will only be getting 66% of the average full-time take-home pay, which is what they get now.

    I think. National’s compensation package doesn’t involve increasing the pension to 68% does it?

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  30. burt (8,043 comments) says:

    Graeme

    That’s not National’s territory, more like Winston’s because it now serves his own best interest.

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  31. Pongo (371 comments) says:

    Graeme Edgeler. Super is based on the after tax wage and there is a compensating tax cut so the wrinklies will no doubt get 2.5% straight away then get their super lifted again at their annual revue. Greypower should have lynched Goff and given English a standing ovation, their grasp of economics is appalling.
    As a taxpayer when I get welded for my rental property in the budget I will pop round to my retired Uncles 2 million dollar property in Fendalton and see if he will let me use his holiday home in Arrowtown cos I wont be able to afford to go away this year.

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  32. Ross Miller (1,682 comments) says:

    Goff was apparently a lawyer in another life.

    Question ….. given his latest utterances how the hell did he ever manage his own Trust Account.

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  33. fatman43us (166 comments) says:

    None of this escapes the horrible fact- we are raising GST to be able to compensate those punished by the raised GST.

    Question: Why not leave the money in our pockets and forget the change to GST. Same effect, less bureaucrats, and perhaps the glimmer of the reason we are in this predicament at all – IT IS SPENDING. Cut that, and voila, the thing slowly begins to work again.

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  34. krazykiwi (9,189 comments) says:

    @fatman43us – indeed, but it’s not our money. You see, we only custodians of it on behalf of the loving, benevolent state. We should work harder and be more grateful. Socialism 101. Really. Off to the re-education camp for you!

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  35. Manolo (13,517 comments) says:

    Actually, Socialism 101 and 102 are what the dreadful Helen Clark taught the country the last nine years.

    After more than a year in charge, Neville Key and his National Party minions appear dedicated to continue teaching the much-maligned subject (NZ is on Socialism 201 at the moment).

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  36. Graeme Edgeler (3,277 comments) says:

    Graeme Edgeler. Super is based on the after tax wage and there is a compensating tax cut so the wrinklies will no doubt get 2.5% straight away then get their super lifted again at their annual revue.

    I’m not denying this.

    DPF wanted a translation of Phil’s argument. I provided it. (I think). This is what Phil Goff is getting at – GST will go up, but the pension will stay at 66%.

    It could well be economically illiterate, but the argument is perfectly understandable.

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  37. Pongo (371 comments) says:

    It will stay at 66% of the AFTER TAX WAGE and there is a corresponding tax cut so hence the after tax wage will be higher. Pensioners will generally be better off as they typically have income from investments so the tax cuts will work for their incomes as well.
    I missed Goff but heard the greypower spokesman and if pensioners are getting financial guidance from him it wont be long before finance company debentures make a come back. I find it hard to fathom Goff got a standing ovation from people who have been around a long time and should have a bit more sense, and he wont reverse the gst either.

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  38. Luc Hansen (4,573 comments) says:

    Weasel words from both the govt and the opposition abound in this debate, and we really have to wait for the details in the budget to get down to the nitty gritty.

    But one thing is certain: GST is a regressive tax, therefore, proportionality speaking, the well off will be taxed less; the less-well off will be taxed more, thus increasing our income inequalities.

    And this is one reason why we need to build more prisons.

    I look forward to the bleats from those who don’t understand the principle of proportionality.

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  39. krazykiwi (9,189 comments) says:

    “the principle of proportionality”. Hmmm. Luc thinks that because my neighbour earns less than me he’s heading to prison and I’m a bastard. The unspeakable stupidity of such ‘distributionist’ theory was well displayed through the Soviet era

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  40. GPT1 (2,106 comments) says:

    The translation is that Goff is in opposition and feels he must oppose. Some thick-ass has come up with an idea that sounds great to any social credit voter on why the increase in GST will destroy old people. Goff, being a bright sort of chap (for a lefty), knows that it isn’t true but still needs to oppose so he has confused the issue as much as possible to avoid future embarrassment. Simple really.

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  41. edhunter (523 comments) says:

    off with their heads, the grey’s that is not the poli’s, compulsary euthanasia at 75 the only solution ;-)

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  42. reid (16,111 comments) says:

    “GST is a regressive tax, therefore, proportionality speaking, the well off will be taxed less; the less-well off will be taxed more, thus increasing our income inequalities.”

    Yes, it is. It’s also impossible to evade or avoid except through cash jobs and there aren’t many of those out there in large enough scale to affect the revenue base except perhaps for drug dealers and hit men.

    It’s also administratively cheap from the govt’s perspective (although not from the business’ perspective) but now both sides’ systems are emplaced everything just ticks along, on a monthly basis.

    That’s why govt likes it: simple, regular, cheap to collect, hard to evade, non-inflationary once an increase works its way out of the economy one or two years hence.

    PAYE and FBT are the only competitors in terms of ease of collection. Sadly, most govts tend to focus solely on that aspect rather than what’s good for the economy, because that’s the only thing their revenue advisors know how to say. Only idiots listen attentively.

    I know Liarbore focused solely on that from Cullen’s track record. Will Key be more creative? I sure hope so but tea-leaves aren’t good so far…

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  43. Michael (899 comments) says:

    The more Phil Goff lowers expectations of the tax/GST package to superannuniants, the harder it will be for him to win back the votes if they actually find themselves better off.

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  44. side show bob (3,660 comments) says:

    This country is headed for total breakdown. If the gutless fucks that pretend to be leaders continue down this path of communism there is going to be trouble. What these damn fool leaders have not taken into account is that there is a breaking point. Forget civil war, it will simply be a war of survival. National has been a total disaster for this country, while our leader is away licking Kenyan arse the country sinks deeper and deeper into the mire. Get your shit together National the clock is counting down.

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  45. PaulL (5,983 comments) says:

    And why do we think a “regressive” tax is a bad thing? I can understand that a regressive tax system can be a problem, but a regressive tax as part of an overall progressive tax system is not necessarily a bad thing. So long as we’re managing the income tax to even out the regressiveness of the GST, no issue.

    As always, Key is missing the opportunity to introduce a tax free threshold.

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  46. Shunda barunda (2,973 comments) says:

    “Shunda barunda come off it, GST is neutral to business costs”

    Only if your labour component is about the same as your expenses, if you are doing more work than buying materials then you spend an awful lot of time collecting GST on your labour for the IRD, enter clients with a set amount of money and any GST increase lowers my profit margin.

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  47. db.. (79 comments) says:

    @ Shunda barunda 7:39pm

    …”enter clients with a set amount of money and any GST increase lowers my profit margin.”

    Careful now.. That sounds like hip pocket accounting to me.

    Best to “cost plus” the job and keep the paper work straight.”
    If “pricing the job” is necessary where you trade then price too high and fall back to the “cost plus, plus” as a sweetener.

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  48. Shunda barunda (2,973 comments) says:

    “Careful now.. That sounds like hip pocket accounting to me.”

    I’m not doing anything dodgy, I am in a profession where about half my work involves being the last guy on the scene after the other tradesmen have done there bit, ie the clients have been sucked dry and I get the dreggs!!
    When you are the last guy on site the clients tend to say “what can you do for x amount of $” .
    If GST goes up it will in reality eat into my take, charging more is ok when they have more!!

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  49. side show bob (3,660 comments) says:

    The rise in GST will kill thousands of small business but don’t worry the dropkicks will reimburse the less well off. Trouble is we all will be worst off, so what is the logic of this insanity?

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  50. big bruv (13,571 comments) says:

    “The rise in GST will kill thousands of small business ”

    How?

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  51. big bruv (13,571 comments) says:

    By the way, who else noticed that their pay packet was a little bit lighter this week?

    This from the government who said they were committed to “ongoing tax cuts”

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  52. krazykiwi (9,189 comments) says:

    How?

    bruv, read Shunda’s 8:19 post. Businesses like his will definitely suffer.

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  53. nickb (3,675 comments) says:

    “By the way, who else noticed that their pay packet was a little bit lighter this week?”

    I did bruv now that you bring it up…
    ACC gone up to 2% of our gross pay….

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  54. Pauleastbay (5,035 comments) says:

    Who are you lucky bastards with a weekly pay packet??

    Try contracting and have your ACC arbitrially charged on either what you earn or what you are working on, it varies hugely

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  55. jackp (668 comments) says:

    Since Goff wouldn’t lower GSt if regaining power, why did he drive around New Zealand paid for by taxpayers telling everyone to go against the rise of GST. Goff alterior motive was to ride around New Zealand to show his face. Shows the stupidity of both Key and Goff when principle is thrown to the wayside. I thought I would never say this but Winston Peters is looking better by the day.

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