Don’t believe the lies
January 28th, 2011 at 12:35 pm by David FarrarLabour are telling massive whoppers, such as the Government is borrowing $120m a week to pay for tax cuts for the wealthy.
The reality is that National’s tax and spending packages will in fact lead to around $2.8b less debt by 2014, than ehwt Labour were proposing. Bill English’s office has released this table showing the components:
Net fiscal impact of the Government’s tax changes ($million increase (decrease) in the operating balance)
| 2008/09 | 2009/10 | 2010/11 | 2011/12 | 2012/13 | 2013/14 | 6-year total | |
| Election tax package1 | (133) | (238) | (37) | 188 | 198 | 198 | 176 |
| Budget 2009 cancellation of 2nd and 3rd tranches2 | 105 | 553 | 956 | 999 | 999 | 3,612 | |
| SME tax package3 | (294) | (189) | 214 | (108) | (108) | (108) | (593) |
| Budget 2010 tax package4 | (460) | (90) | (40) | 175 | (415) | ||
| Total | (427) | (322) | 270 | 946 | 1,049 | 1,264 | 2,780 |
1. Fiscal impact = revenue (removal of R&D tax credit + KiwiSaver changes + cancelling remaining tranches of Labour’s tax cuts) minus costs (personal tax + IETC). Source: Cabinet Paper CAB(08)585.
2. This is not an increase in taxes but the cancellation of future intended tax cuts which were already in the fiscal forecasts. Source: Treasury Report T2009/418.
3. February 2009 SME tax package. Source: BEFU 2009, Table 1.7.
4. Fiscal impact = revenue (GST increase + depreciation + LAQC + thin cap + WFF + GST base + tobacco + increased audit) minus costs (personal tax + company + PIE and savings vehicles + GST compensation). Source: Budget 2010 Executive Summary, Table 1.
The key thing to remember is that the combined tax and spending changes have been not just fiscally neutral, but in fact debt reducing. In the first two years they were slightly expansionary (which is not altogether bad) in a recession, but by the end of next financial year they would have been positive for the Government fiscally..
Related posts:
- The net fiscal impact of National’s tax and spending changes
- Tax Cuts Past and Future
- The importance of low inflation and tax cuts
- Tax forecasts
January 28th, 2011 at 12:41 pm
tell me lies tell me sweet little lies, tell me lies ..
Vote:if you tell a lie enough times people will start to believe
January 28th, 2011 at 12:42 pm
The Labour Party has not even mentioned how they are going to improve the fiscal consolidation EXCEPT to put up some taxes. It would be interesting to find out how much taxes would have to go UP for the fiscal consolidation of the Labour Party to match the Government’s. The GST free food (has that been quietly forgotten, they have stopped mentioning it) and the first $5,000 tax free are very expensive items.
Vote:January 28th, 2011 at 12:49 pm
There are lies, damned lies, and statistics.
It would be a good idea to remind Double Dipton English that the road to hell is paved by good intentions and to start reducing expenditure as soon as possible.
It’s already two years too late, but still time.
On the other hand, the credibility of the socialist Labour Party and its henchmen is worth zilch.
Vote:January 28th, 2011 at 12:57 pm
I imagine Labour’s considers that:
1. National increased some taxes, closed some “loopholes”, and changed some other things, a fiscal positive for the government
2. National cuts taxes, in a manner of particular benefit to the “rich”, a fiscal negative for the government
3. The Government is borrowing $300m a week.
4. If National had done the first, but not the second, we would be borrowing $120m a week less than we currently are.
You can argue whether this is good or bad, but I don’t think it’s a lie, and certainly not a whopper.
Vote:January 28th, 2011 at 12:57 pm
So how many of Bill’s projections have been accurate in the past year?
Not that $2.8 billion over 3 years makes fuck all difference. Its a bit like Obama saying we’ll have to make changes because we risk being buried under a mountain of debt. When we are already buried under six mountains of debt.
See this chart.
Its just Labour/National trying to score political points while the country goes to hell in a hand cart because neither of them has the damn balls to do what really needs to be done. And it should be National that does it, for we know Labour never will.
Vote:January 28th, 2011 at 1:13 pm
tvb, how would Liarbore pay for their bribes? . Been the fiscal fuckwitts they are and given their deep disgust for the peasants on the land I’m picking these scum would fall in love with huge fart taxes. Not that any of these taxes would pay for carbon credits, I’m sure the socialists would make the Mafia look like choir boys, it would be full steam ahead for the skimmer.
Vote:January 28th, 2011 at 1:20 pm
Both parties, Labour and National, are the two sides of the same devalued socialist coin.
Vote:January 28th, 2011 at 1:39 pm
Hey DPF. you have’nt disaggreted “personal tax” in “$$ per week.”
could you do that for me instead of trying to use “fiscal impact” and hiding personal tax changes in a whole heap of unrelated crapola??
Vote:January 28th, 2011 at 1:48 pm
Manolo is right. When is National going to reduce bureaucracy? Brash is the only person that has come up with a concrete plan. I don’t agree with all of it but most of it is pretty good.
Vote:January 28th, 2011 at 1:57 pm
“Been the fiscal fuckwitts they are and given their deep disgust for the peasants on the land ”
Thats it Bob- Bill English, John Key And Phill Goff and every bureaucrat in the land and every welfare bludger and every other sucker on the state tit is only interested in maintaining the status quo. That’s why Billy and Johnny borrow $300 million a week.
And you know who pays it back don’t you Bob? And who pays the interest too don’t you Bob. You and me mate, that’s who. And while we struggle and sacrifice to do that, these very same fuckers that need the $300 million run around dreaming up new ways to harass us and regulate and generally piss us the hell off and make it harder for us to maintain them.
And there’s fuck all we can do because there are more of them then there are us. And they use their vote every year to elect their own personal smiling waving looting politician.
Do you know Bob that the annual interest payments on our debt will, in four years time, cost more than spending on the Police, defence and early childhood education combined??
So that is the state these leftist swine and their abuse of democracy has got us into Bob. Just fucking great ain’t it??
Vote:January 28th, 2011 at 1:59 pm
Gracious. Not even The Standard overtly shills press releases on behalf of their masters.
Vote:January 28th, 2011 at 2:04 pm
National would have to change their social policy for any sort of expenditure reduction. I don’t Bill English will be able to do that by himself.
Vote:January 28th, 2011 at 2:11 pm
“Gracious. Not even The Standard overtly shills press releases on behalf of their masters.”
Don’t need to really do they with all you gormless foot soldiers out there so willing to endlessly do the propaganda just because you believe.
Vote:January 28th, 2011 at 2:14 pm
Quite true RB, something will have to give. Why is it that most of the private sector in Kiwiland can understand and stay within their budgets but the government just takes, takes and takes. I can see two outcomes if nothing changes, the total breakdown of the country or the total Nationalisation of the country. The mounting debt in this country will eventually be the chains that enslave us.
Oh please Danyl the substandard is nothing but leftist dribble that your masters use for press releases.
Vote:January 28th, 2011 at 2:15 pm
Want to cut the defecit?
Want to reduce government borrowing?
Want to maintain current levels of service?
Make god pay his way – tax and rate the churches, their properties and their businesses!
I’m sick of paying for god! Let him dispose of his own rubbish, put out his own fires and solve his own crimes.
Vote:January 28th, 2011 at 2:18 pm
Redbaiter (12,922) Says:
January 28th, 2011 at 12:57 pm
So how many of Bill’s projections have been accurate in the past year?
Not that $2.8 billion over 3 years makes fuck all difference. Its a bit like Obama saying we’ll have to make changes because we risk being buried under a mountain of debt. When we are already buried under six mountains of debt.
See this chart.
Jesusinagokart, red! I’m working as hard as i can to support NZ’s debt, I’m not paying the American one as well.
If you’re so concerned about the US then piss off to seppo land, this discussion is about NZ.
Vote:January 28th, 2011 at 2:18 pm
The problem is the difference between revenue and expenditure. So why don’t NACT cut spending right now?
Oh that’s right, the previous Labour government made them do this.
And we would be borrowing $120 million per week less if National had run every part of their programme EXCEPT the income tax cuts, that is a fact.
So the only lie is the title of this thread
Vote:January 28th, 2011 at 2:19 pm
Hey guys dosn’t the 300 odd million pw include the rollover of existing loans due, or did I miss something, It is not all new borrowing is it, jesus wept, I might have to make time for the cardiac arrest today, bugger it I just aint got time and its Happy Hour at the Grand tonight so I get to drive drunk again or havn’t the bastards lowered the 0.8 yet.
Vote:It is so easy to miss stuff, whatever happened to Thursday.
January 28th, 2011 at 2:22 pm
MNIJ: I am supportive of all charitable organisations receiving a tax break. So long as churches continue to meet the charitable organisation criteria, I’m OK not to tax them.
Vote:January 28th, 2011 at 2:32 pm
MyNameIsPOS, when you say “Want to maintain current levels of service?” can you please define the term “service” in your fucked-up world? Is it every single cent of low-quality pork inherited from the last lot of socialists (you know, your deity the communist lesbian), and the low-quality pork injected by the current lot of socialists?
Or, in your fucked-up view of the world, are there some cows that aren’t sacred?
Vote:January 28th, 2011 at 2:34 pm
So long as churches continue to meet the charitable organisation criteria, I’m OK not to tax them
But this is the whole point.
When the charitable activity is feeding the hungry, clothing the naked, etc, then I too am fine with a tax break.
But when the charitable purpose is promoting religion, running a business, brainwashing children, then no, there should be no tax break. And a church building is not part of the charitable works. It should be rated and txed like any other business premises.
An d when the “charitable purpose’ is the manufacture and sale of highly sweetened breakfast cereal aimed at children (eg Honey Weets) why should thay not compete on a level playing field by paying tax like their competitors do?
Vote:January 28th, 2011 at 2:41 pm
Make god pay his way – tax and rate the churches, their properties and their businesses!
I’m sick of paying for god! Let him dispose of his own rubbish, put out his own fires and solve his own crimes.
Be even quicker if we halved the Welfare Budget.
Vote:January 28th, 2011 at 2:43 pm
Bevan (3,003) Says:
January 28th, 2011 at 2:41 pm
Make god pay his way – tax and rate the churches, their properties and their businesses!
I’m sick of paying for god! Let him dispose of his own rubbish, put out his own fires and solve his own crimes.
Be even quicker if we halved the Welfare Budget.
Why not drop WFF and tax the churches?
Vote:January 28th, 2011 at 2:47 pm
Why not make useless left wing trolls get off their asses and get jobs?
Vote:January 28th, 2011 at 2:48 pm
lets just sell NZ to China.
They can pay now and take over in 2111.. long after Dimes gone
Them chinese think ahead! they will be right into it
Vote:January 28th, 2011 at 2:51 pm
Instead of focussing on the churches, why not start taxing the FUCKING SHOTOVER JET!!! and all the other commercial enterprises the brown aristocracy runs under the guise of “charities”
Vote:January 28th, 2011 at 2:52 pm
Jesus Wept.
Vote:Graeme’s comment above says it all. I don’t see the point in repeating but I’ll say he hits the nail on the head.
January 28th, 2011 at 2:56 pm
Offshore_Kiwi (440) Says:
January 28th, 2011 at 2:51 pm
Instead of focussing on the churches, why not start taxing the FUCKING SHOTOVER JET!!! and all the other commercial enterprises the brown aristocracy runs under the guise of “charities”
Why not drop WFF, tax churches and tax Ngai Tahu?
Or is that too hard for you to comprehend becuase I DIDN’T FUCKING SHOUT?
Vote:January 28th, 2011 at 3:10 pm
That’s what you get for being useless, Mr Key. The fact is the government *is* borrowing $300m per week. Saying that $120m of that is paying for tax cuts is disingenuous, but so is any comment which tries to equate a block of debt with a block of spending. At the end of the day, it’s all money and National have failed to stem the bleeding. Because they’re visionless, spineless and useless.
Here’s a free idea for John Key: trim the government and scale back the welfare state so were paying back $300 of debt each month. Then and only then can he tell me Labour are crap and he’s much better. Until then it’s just more bullshit and disinformation.
Vote:January 28th, 2011 at 3:46 pm
Is there any way to put this data into a visual graphic which would be more clear.
Vote:January 28th, 2011 at 3:50 pm
And quite apart from your point David, well made here, I think it is quite disingenuous of Phil Goff to count a cut in tax for “the rich” but ignore the fact that the great majority of all tax is already paid by them. I forget the stat – the top 10% pay 76% of all net tax, is that it? – but to then give them a small break, particularly in view of the mass departure of the well educated overseas, and point to that break as in any sense unfair is pretty awful by Mr Goff.
But, that’s what wins votes in this great country I guess.
Vote:January 28th, 2011 at 4:15 pm
So your line two there is when they didn’t cut taxes? That counts as postive fiscal impact?
Obviously I stand to be corrected, but isn’t that completely insane?
How about I promise to cut ALL the taxes, then change my mind. Double the income!
Vote:January 28th, 2011 at 4:18 pm
I am trying to imagine how popular this government would have been with everyone on here, at the Standard, and the rest of the blogosphere/media if it had done the depreciation on property thing, got rid of R and D tax credits, cut back kiwisaver contributions, suspended payments to the Cullen fund, put up GST and then, after years of campaigning on the issue, not given income tax cuts.
Vote:January 28th, 2011 at 4:44 pm
Oh I see – that’s Labour’s planned tax cuts they were cancelling (right?)
Okay, it’s not insane.
That said, considering National cancelled some of its tax cuts too, I wouldn’t lean too hard on a counterfactual based on another, imaginary government following all the way through.
Vote:January 28th, 2011 at 4:55 pm
Hang on, I’ll take that back. Here’s the press release:
“those change include … cancelling two rounds of future tax cuts that had been previously planned by both Labour and National.”
So however you look at it at least one component of those numbers is completely imaginary.
Vote:January 28th, 2011 at 4:56 pm
“..Is there any way to put this data into a visual graphic which would be more clear…”
a toilet…?
phil(whoar.co.nz)
Vote:January 28th, 2011 at 5:11 pm
COST-EFFECTIVENESS OF PRIVATISATION VIS PUBLIC-PRIVATE-PARTNERSHIPS (PPPs):
I have an OIA reply from Bill English, Minister of Finance, dated 23 December 2010, in which you may be interested?
My question:
“1) Please provide a copy of the ‘cost-benefit’ analysis that the NZ Treasury was asked to produce – which proves that the use of private consortiums to build and run public institutions, including prisons and schools – ‘will offer savings over conventional procurement methods’.
Answer:
“Cost-benefit Analysis of PPPs by the Treasury
The Treasury has not prepared any cost-benefit analysis on the use of private consortiums to build and run public institutions.”
My question:
“3. Please provide the information which proves that the use of private consortiums to build and run public institutions, including prisons and schools, is more ‘cost-effective’ than the ‘in-house’ Ministry of Works model.”
Answer:
“Proof that the use of private consortiums is more cost effective than the Ministry of Works model
No analysis has been undertaken comparing the use of PPPs to the “Ministry of Works: model, given that the Ministry of Works and Development was disestablished in 1988.”
_____________________________________________________________________________________________
errr…… so WHY was the Ministry of Works model disestablished in 1988?
What was ‘broken’?
Where is the ‘efficiency’ in effectively allowing private contracting companies to ‘write their own cheques’?
Who is exercising ‘prudent stewardship’ and ‘fiscal responsibility’ over our public resources, ?
Apparently – NOT the NZ Treasury?
So – who is?
I look forward to asking unlimited ‘hard’ written questions of Ministers from inside the House, after 5 March 2011!
Penny Bright
Media Spokesperson
Water Pressure Group
Judicially recognised Public Watchdog on Metrowater, water and Auckland regional governance matters.
“Anti-corruption campaigner”.
Attendee: Australian Public Sector Anti-Corruption Conference 2009.
Attendee: Transparency International 14th International Anti-Corruption Conference 2010.
Auckland Mayoral candidate 2010.
Independent candidate Botany by-election 2011
http://waterpressure.wordpress.com
Vote:January 28th, 2011 at 5:20 pm
Sorry Penny, you’re upset that Ministry of Works was disestablished in 1988? And that Treasury hasn’t recently done a study about whether it might be more efficient? Are you aware how insane that sounds?
Vote:January 28th, 2011 at 5:20 pm
Take a trip to North Korea and ask some of your starving commie mates about cost benefits you head in the sand Marxist fruit loop.
I mean what kind of a blathering nut case includes a thirteen line signature every time they post a message to a blog? Anyone who does something so ridiculous has got no damn right to be asking anyone about cost benefit analysis.
Vote:January 28th, 2011 at 7:37 pm
Oh FFS Penny has reared her unwashed head again.
Penny do you realise that the model you are proposing is exactly that of 60s 70s era Communist Soviet Union?
Probbaly th eprimary reason it was phased out in NZ in 88
A model that was proven to be a breeding ground for corruption, neppotism and breeding bed for a beurocracy that your beloved workign class could not support.
Sigh
Vote:January 28th, 2011 at 7:41 pm
Goff is a very confused old man with dyed hair.
Bless.
Vote:January 28th, 2011 at 7:43 pm
I see my ‘thirteen line signature’ as helping to fill the ‘transparency deficit’, particularly created by the raft of ‘anonymous’ / ‘nom de plume’(d) posters such as yourself ‘Redbaiter’ – whose ad hominum replies prove that I’ve obviously raised some VERY valid points.
Don’t you agree that there should be ‘cost-benefit analyses’ before decisions are made to spend significant amounts of public monies?
How ‘fiscally responsible’ are you?
Also great to see your support for ‘freedom of expression’ – a cornerstone of the ‘democracy’ that I would have thought someone such as yourself would be a great believer in?
Silly me.
I for one would be fascinated to see your ‘credentials’ ‘Redbaiter’.
Do you have any of note?
You’re not breaching the ‘party line’ by engaging in debate with me are you ‘Redbaiter’?
Well – ok – your comments hardly fit into the ‘intelligent debate of the issues’ category.
I live in hope………………..
You have a LOVELY evening
You’ve certainly helped make mine!
Kind regards,
Penny Bright
Media Spokesperson
Water Pressure Group
Judicially recognised Public Watchdog on Metrowater, water and Auckland regional governance matters.
“Anti-corruption campaigner”.
Attendee: Australian Public Sector Anti-Corruption Conference 2009.
Attendee: Transparency International 14th International Anti-Corruption Conference 2010.
Auckland Mayoral candidate 2010.
Independent candidate Botany by-election 2011
http://waterpressure.wordpress.com
Vote:January 28th, 2011 at 7:48 pm
Penny what about my questions? Will you answer those in the name of transparency?
Vote:January 28th, 2011 at 7:54 pm
That contributions reads quite dim, not bright, as the author claims.
Vote:This land never ceases to produce socialists and communists of all tones.
January 28th, 2011 at 8:26 pm
Penny
Your forgot to add “Stalinist Stooge” and “Supporter of Kruschev’s Stagnant Economic Policy” to you list of titles.
BAM!
Vote:January 28th, 2011 at 8:27 pm
In actual fact, most corruption comes with the private procurement model – procurement is where the money is – who gets the contracts?
At the Transparency International Conference that I attended in November last year, I found out that the global private procurement model was estimated to be $14 trillion ($14,000,000,000,000), of which $2.5 trillion ($2,500,000,000,000) was estimated to be lost in bribery and corruption.
(Well – it’s not actually ‘lost’ – the cost of bribery and corruption is included in the inflated charges for those privatised services – which disproportionately burdens the poor.)
I asked where the evidence was that confirmed that this ‘private procurement’ model was more cost-effective for the public majority internationally, than previous ‘in-house’ provision by central and local governments.
I wasn’t provided with any evidence.
Same as when I asked for NZ evidence.
At this Transparency International Conference – I became acquainted with the concept of ‘State Capture’ – the form of ‘grand corruption’ where vested interests get their way at the ‘policy’ level – before legislation is passed.
Seems that ‘State Capture’ is endemic here in NZ.
How did we get the ‘Rogernomic$’ neo-liberal reforms in the first place?
How did we get the Auckland $upercity?
Try googling ‘State Capture’ and checking for yourselves……….
Tip: Check out ‘Regulatory Impact Reports’ and see just whom is consulted and involved in policy-making by ‘policy analysts’ who advise Cabinet……………….
Look forward to finding out a LOT more about ‘State Capture’ when I’m the Independent MP for Botany
(There – that should jam some of your apoplectic / ad hominum buttons on FULL!
Don’t disappoint me!
Kind regards,
Penny Bright
Media Spokesperson
Water Pressure Group
Judicially recognised Public Watchdog on Metrowater, water and Auckland regional governance matters.
“Anti-corruption campaigner”.
Attendee: Australian Public Sector Anti-Corruption Conference 2009.
Attendee: Transparency International 14th International Anti-Corruption Conference 2010.
Auckland Mayoral candidate 2010.
Independent candidate Botany by-election 2011
http://waterpressure.wordpress.com
Vote:January 28th, 2011 at 8:36 pm
A state-owned power company plans to mobilise as much as 930.5 billion kip (US$115.4 million) to build more power plants after putting 25 percent of its shares on sale this week.
Truth it seems is in the eye of the beholder.
In a later post DPF is crying down Labour over their objection to selling off SOE’s. In that post DPF points out that even in Laos they have got the idea. What he failed miserably to say was that the process and result would seem to be quite different. In the model proposed by Key it was self off 40% and the Govt. will pocket the cash to spend on new assets.
Assets that remain unnamed and the money just goes into the bank account which like the extra mortgage will just make the Govt. thinks its rich again so it will waste it.
In the case of Laos, the article posted, (copy below), clearly states that the cash raised will be retained by the company which is selling the shares to be reinvested in that company.
The EDL Electricity Generation Company is allowing local and foreign investors to subscribe for shares until December 24, after obtaining permission from the Lao Securities Exchange Commission.
The company will sell about 217 million shares, with about 86.9 million allocated to foreign investors and 119.4 million to local investors, at an initial price of 4,300 kip per share. Some 10.9 million shares will be available for purchase by company employees at 4,000 kip per share. …
The company will use the money it raises from the sale of shares to finance new power projects and maintain existing plants. …
The EDL Electricity Generation Company is the second state-owned enterprise to offer shares for public sale.
Now there is a world of difference between the two.
Far from me to infer that DPF is doing a Labour but the truth is distorted by the spin.
Vote:As in any WAR, the truth becomes the first casualty and in politics its the same. Dpf has been blogging long enough now that he should know to be accurate.
January 28th, 2011 at 8:38 pm
Hey Penny, Your own pollies contributed a fair chunk of that in NZ. Clark about $1 mill.
Vote:Peters $158000 and counting.
January 29th, 2011 at 8:17 am
Failure is a credential now? This damn country…
Vote:January 31st, 2011 at 12:23 pm
Right, just for completeness:
I had a look at the cabinet paper for line 1, and that line does indeed include the effect of the proposed cuts removed in line 2. So that’s all, in fact, in order.
http://www.treasury.govt.nz/publications/informationreleases/taxbill/pdfs/cab-08-585.pdf (table is on page 17 of the PDF)
Which also clarifies the thing that offset the first round of tax cuts was basically the Kiwisaver changes. Much as I’m not now in a position to snipe I can’t help noticing, in the context of the present debate, that’s money that would have gone directly into private saving.
Vote: