How about tax cuts Treasury, instead of jam jars?

July 8th, 2014 at 9:00 am by David Farrar

Vernon Small at Stuff reports:

is working on a radical plan to set up a new “jam jar” fund to hold extra tax revenue to smooth income variations.

It says the “stabilisation fund” could operate as a stand-alone agency and be put in place if further debt repayment became politically unpalatable.

The fund was one of three options outlined in a pre-Budget Treasury document late last year and released yesterday.

It said there were three broad, but not mutually exclusive, options for so-called “revenue surprises”.

They were to pay down debt, commit it to “one or more existing funds (or ‘jam jars’), and create a new form of fund or jam jar (eg a stabilisation fund)”.

I’m very disappointed that Treasury did not look at a fourth option for revenue surprises. That is .

If the Government has more revenue than it expected, then why not allow hard working taxpayers to keep more of their income?

One could have a policy that any funds, greater than forecast in the last Budget, be refunded to taxpayers at year end.

So if the surplus projection was say $2.1 billion and the actual surplus turned out to be $2.9 billion, then the $800 million extra gets refunded proportionally to taxpayers.

 

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36 Responses to “How about tax cuts Treasury, instead of jam jars?”

  1. Nigel Kearney (919 comments) says:

    If the Government has more revenue than it expected, then why not allow hard working taxpayers to keep more of their income?

    Well, that’s what a centre-right party would do. We should elect one if we can.

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  2. Redbaiter (8,032 comments) says:

    “I’m very disappointed that Treasury did not look at a fourth option for revenue surprises.”

    Or even the fifth one- stop looting the people and buying their votes with their own money. This govt is spending $80 billion a year and will trend up to $100 billion over the coming years. Singapore budget is for example is less than half that.

    In a country like NZ that would be lucky to have 2 million wage earners this is just utterly ridiculous. We need to reduce the size of govt and STOP THE SPENDING.

    Not that anyone who gets their pay cheque from govt will recommend this course of action.

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  3. EAD (832 comments) says:

    All of these debt paydown options is all Pie in the Sky, Alice in Wonderland hypothetical nonsense. It ignores the simple fact that we have used debt based money since 1971. Our currency is created out thin air as a debt. To pay that currency back + interest more currency must be created (out of thin air) to pay back the interest as only the debt was created in the first instance. This process means that our money supply must be constantly inflated on an exponential basis to pay back every new piece of currency + interest that is due to the Bankers.

    Read and understand that – We are, absolutely, without a permanent money system. Someone has to borrow every dollar, we have in circulation, cash or credit. If everyone were to pay back their loans, we would have no money supply.

    Take some time to think about the above when you discuss “setting up jam jars”.

    I’ve posted this video before, but if you are new to how money works, it is very illuminating. Watch from 10.30 onwards to skip to the real interesting 3 minutes and understand the authors delusion.

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  4. dime (9,667 comments) says:

    oh and its called a jam jar! how folksy! it just sounds so sensible!

    and its a stand alone agency! so these assholes get to control it. glorious.

    i mean, why give it back? the ird went to the trouble of taking this money by force.. to give it back would be a shame

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  5. WineOh (608 comments) says:

    How could putting the money aside possibly be better than retiring debt? Given how easy it is for the government to shift its bond issue programs in timing and amounts, it doesn’t make any sense.

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  6. Redbaiter (8,032 comments) says:

    Well, that’s what a centre-right party would do. We should elect one if we can.

    If ACT are the party of principle and also for small govt then why are they supporting big spending big govt National?

    ACT have to give up one of those claims.

    They are either not a party of principle, or they state that they will not support National.

    Can’t have it both ways.

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  7. wreck1080 (3,810 comments) says:

    @redbaiter:: Often I disagree with your radical views but in this I agree.

    People seem to think national have got labours previous spending under control but they have not.

    Here from 2012…
    “In 2000, core government expenditure was $34 billion, but 11 years on that has grown to $73 billion. Core government spending now makes up more than a third of the New Zealand economy. Once you add in local government, that pushes the government sector to over 38 per cent of gross domestic product.

    Here is one test. Are your local services at least twice as good today than they were in 2002? That is because since 2002, local government spending has surged by 119 per cent, the rates take has increased 95 per cent and debt has quadrupled.

    http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=10836241

    Disgraceful.

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  8. ShawnLH (4,440 comments) says:

    “If ACT are the party of principle and also for small govt then why are they supporting big spending big govt National?”

    Four reasons.

    One, ACT only exists because of National’s Epsom deal, so they would be gone if they did not support them.

    Two, ACT knows that National is going in the right direction, if slowly, and that compared to a Labour/Green?IMP coalition National is vastly better.

    Three, what counts as “big spending” or “big government” is subjective opinion only.

    Four, I suspect Whyte is smart enough to know that a government which went on a slash and burn binge would be dumped by the voters fast. Governments cannot do what the voters will not allow them to. They may get away with the odd unpopular policy, but take that too far and they are goneburger.

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  9. ShawnLH (4,440 comments) says:

    National’s strategy thus far has always been to downplay how big a policy is, so that they get as much bang for their buck when they announce it. Given that they have repeatedly downplayed the tax cut policy they are going to announce soon, I suspect it will be larger than expected.

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  10. EAD (832 comments) says:

    That is true Wreck,

    the biggest whopper I hear from National fan boys is that inflation has “only been 14%” over the past six years. As if all the billions upon billions of extra borrowing has had minimal effect on the inflation of the money supply.

    Do the people that mindlessly quote these figures ever use their common sense, do they never go shopping for food, pay for petrol, buy a house, pay rates or electricity?

    But sure enough, the fan boys will be along soon to tell me “we trust him”, “they are good economic managers”, “their small changes add up to a big difference”, “imagine how much debt Labour would get us in!!”

    Or this corker from the Matrix dweller ShaunLH “National is going in the right direction, if slowly” – yeah, 6 years in and you still haven’t shown us your hand, quite the Poker players aren’t they Shauny :)

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  11. Griff (6,997 comments) says:

    Red
    your post on act is why you and your politics will never get traction
    Politics is about compromise
    Even the Maori party has realized you do far better for your constituents as a small part in coalition sitting on the government benches than being just a marginalized minority in the opposition.
    If the ignorant stone ages can work this out why cant you? :lol:
    You don’t need to answer that its obvious.

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  12. Redbaiter (8,032 comments) says:

    @redbaiter:: Often I disagree with your radical views but in this I agree.

    My views are not radical.

    Small government is not a radical concept.

    Look at the historical budget figures. Small govt existed in NZ for decade after decade after decade. From the birth of this country up until the 1970s.

    The left uses propaganda and lies to advance their political agenda, and one of their favourite methods is to paint those who firmly oppose them as radicals.

    Its completely wrong. The left are the radicals. NZ has never ever before had such big spending intrusive all powerful govt as it has today, and it is the left who have brought us to this.

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  13. ShawnLH (4,440 comments) says:

    “NZ has never ever before had such big spending intrusive all powerful govt as it has today”

    Your obviously not old enough to remember the 70′s.

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  14. Redbaiter (8,032 comments) says:

    “Or this corker from the Matrix dweller ShaunLH”

    A gibbering fool with far too much to say for one with such a diminished intellect. My point that ACT cannot be a party of principle at the same time as they support National went right over his head. He’s written hundreds of words in response but not really addressed the issue. A complete waste of time. If he wasn’t sliming around kissing commie arse all the time he may be be a bit more bearable, but that’s not going to happen. Ingratiating himself with those who would enslave us seems to be his preferred option. Appeasement has such a great record of success.

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  15. wreck1080 (3,810 comments) says:

    @redbaiter:

    Well I certainly agree that government spending is way too high.

    Working for families, interest free student loan bribe, buying train sets, Ministry of womens / maori / racing / xyz …

    The head of horse racing NZ was getting 1 million dollars a year tax payer money until he quit last week. Why on earth does that position even exist? Winston Peters baubles?

    If I were PM, it’d all be gone.

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  16. ShawnLH (4,440 comments) says:

    “A gibbering fool with far too much to say for one with such a diminished intellect.”

    Back to using the Marxist playbook again Reddy! :)

    ” My point that ACT cannot be a party of principle at the same time as they support National went right over his head.”

    Nope. Understood it fine. It’s just that your definition of how they apply their principles is total bunk.

    “but not really addressed the issue.”

    I have addressed it many times in response to you. But you seem a little slow on intellectual grunt side of things. No worrys, you’ll get their sooner or later!

    ” Ingratiating himself with those who would enslave us seems to be his prefferred option.”

    Nope, if it was I would support Labour/Green/IMP. Like you do. Your tactics would have the real enslavers in power for the foreseeable future. Are you a fifth column for Labour/Green/IMP?

    “Appeasement has such a great record of success.”

    Blind ideological purity has a great record of success, at being powerless.

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  17. ShawnLH (4,440 comments) says:

    EAD want’s small government for New Zealand and the West to adopt isolationism, but is also an apologist for Putin’s massive and increasingly totalitarian government and it’s warmongering against the Ukraine.

    Hypocrisy and double standards are never pretty.

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  18. dirty harry (444 comments) says:

    “operate as a stand-alone agency”

    Another quango , more cost..imagine the GM’s salary and his glorious title plus countless many bean counters employed as magnifying glass operators studying ” investment options ” for our money. Imagine the sheer delight on one Winston Peters face if he were to ever get near the levers of power..”Bring me the jam jar ” !

    Stop taking my money by stealth you bastards,

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  19. kowtow (7,953 comments) says:

    Jam jars.

    Who came up with that?

    It’s either the infantilization of feminizing of the electorate. Probably both. Appealing to thicko so called middle ground voters.

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  20. publicwatchdog (2,293 comments) says:

    Here’s a really simple solution. Ensure the Public Records Act 2005 is implemented in a proper way – across all Government Departments / Offices / Ministries etc and the ‘books’ are opened so that the public can see EXACTLY where every $ is being spent / invested/ borrowed. Then – there should be RIGOROUS ‘cost-benefit’ analysis – and if it cannot be confirmed that the widespread contracting out of public services since the neo -liberal ‘Rogernomics’ reforms since the 1980s have been more ‘cost-effective’ for the public majority – then cut out the consultants and private contractors and return these services ‘in-house’. Penny Bright

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  21. Redbaiter (8,032 comments) says:

    “If I were PM, it’d all be gone.”

    Wreck, have you read Richard Prebble’s book “I have been thnking”?

    Prebble is an old lefty and Labourite but the book has a lot of very interesting data on the growth of govt over the years and how tax collection and expenditure have grown so incredibly.

    Its an old book, but there are a few copies around still.

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  22. ShawnLH (4,440 comments) says:

    Anyway, gotta go for the day as I have a client. Unlike commie Redbaiter, I’m not on welfare. ;)

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  23. lazza (370 comments) says:

    This is the bit “that got me” …

    “if further debt repayment became politically unpalatable”.

    Huh? politiclly unpalatable. This statement is just so screwed up on so many levels … that I’ll just leave that at that.

    What responsible treasury analyst (and rational politition-taxpayer for that matter) would not opt for paying down Crown debt as a priority!

    With around every 20 cents in every tax dollar going to pay debt servicing costs it is a complete no brainer.

    And “Reduce Taxes” … in this situation … “Nah tell him he’s dreamin”

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  24. GPT1 (2,106 comments) says:

    I would like to see bracket creep address with CPI adjustments to the brackets made every few years.

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  25. dirty harry (444 comments) says:

    “The left are the radicals. NZ has never ever before had such big spending intrusive all powerful govt as it has today, and it is the left who have brought us to this.”

    Ya cant argue with that.

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  26. mister nui (1,012 comments) says:

    All the parties of the left, and I include National in that, are the same.

    Check out this video where Jamie Whyte advocates for abolishing corporate welfare. http://www.3news.co.nz/Helping-business—hand-up-or-handout/tabid/1348/articleID/351537/Default.aspx

    What about this wanker “rocket man”, Peter Beck, wanting and being given my money for his fucking hobby. Well buddy, if your hobby/business proposition is so fucking wonderful, open it up for equity investment and let the market decide whether you’re really that great. Instead of me forcibly having money taken off me and then given to you through no choice of mine, which, guaranteed, I will never see any return on my investment. What a sense of entitlement the cunt has.

    Then there is the commie Norman, who in principle agrees with corporate funding, just of course, he is against everything National has funded. Of course, he only wants to fund green things, which have proven to be the biggest loss making industry since the Dutch Tulip bubble.

    Next there is the perpetually angry Helen Kelly; who doesn’t really know what she stands for, but is certainly against whatever National has done.

    And what about that wanker Andy Hamilton, of course he’s for it, his job and livelihood depend on it. Well Andy, if thee businesses are so fucking great, get your hand out of my pocket and into your own and fund them yourfuckingself.

    As Tim Hazledine said, generally what happens is these companies take our dosh, build it up, then flick it off and pocket the cash – the long suffering taxpayer sees no return on their investment whatsoever, yet they were one of the most critical factors in the success of these companies.

    Finally, the regulatory favours is by far the worst type of corporate welfare, as it generally favours big business and not small businesses. You only have to look at the ultimate corporate welfare recipient in the US, GE, to see how those cunts benefit from regulatory favours. Why should one business be able to have regulations put in place that favour them over another, just because they’re in the hip pocket of Obama?

    Every fucker in that video is a parasite, so of course they’re for the continuation of this corporate welfare.

    Oh for a true capitalist economy. Party vote ACT.

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  27. EAD (832 comments) says:

    Good old Shaun – keep knocking down those strawmen. Here is my (top-rated) quote on Russia which the Strawmen demolisher bases his assertion on: http://www.kiwiblog.co.nz/2014/03/how_to_stop_putin.html#comment-1293487

    Here is my quote in full – please point out where I apologise for totalitarian government and who do I point out has the totalitarian government? Or perhaps you rebut my video at the start of the thread?

    “Why do we want to “stop Putin”? Russia has acted calmly and reasonably in protecting her legitimate interests in the Crimea, historically part of Russia with a majority Russian population and home of the Russian Black Sea Fleet.

    The real cause of the problem is the EU’s reckless imperialism in attempting what amounted to the political and economic takeover of the Ukraine, which any fool could see is a vital Russian sphere of interest.

    From 1917-90, Russia was in the grip of a ruthless and pitiless ideology, enforced by ruthless and pitiless men, whose only service to humanity was to help defeat an even more evil, ruthless and pitiless ideology during the years 1941-5.

    When Russia came blinking into the modern world, the West colluded with the asset stripping of Russia’s natural resources, and indulged Boris Yeltsin because it suited them. When Putin arrived, and began to organise matters on a more pro-Russian basis, the west took umbrage, and has been trying to punish him for his temerity since.

    Yes he may be “authoritarian”, but with such a dysfunctional, ravaged and corrupt country that had just defaulted and experienced a hyperinflation in 1998, somebody was required to pull the once proud Russia from its knees and the results have been impressive – under his presidency wages have tripled, unemployment has halved, GDP has grown by 72% and taxes have fallen to a flat income tax of 13% with practically zero government debt. Compare that with Obama’s America – 50million+ on foodstamps, $18 trillion in debt, $1 trillion+ annual deficits, multi hundred billion pound trade deficits and interest rates being held to zerobound to stop the country going bankrupt.

    Exactly what money is the West going to flooding the Ukraine with?”

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  28. mister nui (1,012 comments) says:

    I would like to see bracket creep address with CPI adjustments to the brackets made every few years.

    Nope.

    What is wrong with a flat tax system? First $35,000 tax free (which would be CPI adjusted every few years), then 18% on everything after that.

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  29. Griff (6,997 comments) says:

    :lol:
    another kiddie
    National’s Mouldoon government
    Think big.. crony capitalist along the unions joining in the taxpayer funded feeding frenzy.
    Car less days
    Import licensing. protected free money machine for the governments crony’s
    Wage and price freeze. command economy.

    It took the filthy Marxist labour party to place nz back into the right side of politics.

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  30. Redbaiter (8,032 comments) says:

    Patrick Carataga is one of NZ’s foremost taxation specialists. He wrote the folowing in 1998-

    NEW ZEALAND has climbed a tax mountain for most of the 20th century. In 1921 the total tax take exceeded 15 per cent of GDP; in 1941 it exceeded 20 per cent; in 1943 25 per cent; and in 1980 30 per cent. In 1990 it reached a historic peak of 36 per cent, falling back to 34 per cent in 1997.1

    This tax mountain is the creation of rising government expenditure. In 1973-74, government expenditure accounted for 28 per cent of GDP. After 1975, it generally remained over 38 per cent and peaked in 1986-87 at 44.2 per cent. Much of this increase reflected the rising cost of social transfers, which jumped from 12 per cent of total government expenditures in the early 1970s to a peak of around 22 per cent in 1989.

    During 1950-75, interest on the public debt averaged 2.4 per cent of GDP a year. It rose to 3.2 per cent in 1975-79, 5 per cent in 1980-84, and 7.2 per cent in 1985-89. It peaked at 8 per cent of GDP (and 20.7 per cent of government expenditure) in 1987-88. This level was comparable to the early years of World War II (1940-42), when interest payments consumed 22.4 per cent of total expenditures. The gross public debt itself was 40.5 per cent of GDP in 1973-74; within five years, it reached 53 per cent of GDP. At its peak in 1986-87, the gross public debt reached 77.2 per cent of GDP.

    Even in the late 1980s, after the reforms of Roger Douglas, the Minister of Finance, government expenditure did not fall below 38 per cent of GDP, ten percent-age points above the 1973-74 level. The ratio remained at 38 per cent for the first two years of the Bolger National government (1991-92), reflecting the need to cush-ion those most affected by the structural adjustment of the economy and high debt service payments (Caragata, 1997:55-70).

    This huge increase in the role of government, from 28 per cent to 44 per cent of GDP in the 13 years from 1973-74 to 1986-87, was not planned; nor was it subjected to any cost-benefit analysis or risk assessment of its potential impact on the economy. Rather, it reflected a dominant welfare-state paradigm about the role of government that has guided political thinking for over 50 years but is now beginning to lose its grip.

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  31. mister nui (1,012 comments) says:

    So, I just looked up this Peter Beck and his Rocket Lab.

    The fucker has offshored the ultimate holding of his company to the US! What, getting ready for the Private Equity buyers already?

    I have a good mind to slip round his workplace and demand a share certificate.

    The conniving prick!

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  32. wreck1080 (3,810 comments) says:

    @redbaiter:: Yep, i’ve read the Prebble book but it was around the late 90′s i think.

    Sadly Prebble is fairly quiet on matters these days.

    It is such a shame that Act self imploded.

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  33. Redbaiter (8,032 comments) says:

    Actually the best book to read on NZ’s slide into big govt is Patrick Carataga’s “Why are our taxes so high”. If you can find a copy grab it and have a read. (I have an autographed copy.)

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  34. ross411 (295 comments) says:

    Tax cuts? How insulting. That’s not your money you would get back, but money that belongs to others. All the benefiters who are entitled to that money, as a human right. Whether that’s as parental leave so you can participate in paying for them to raise _their_children they chose to have. Or as a tax break for them personally, as working for families so you can participate in paying for them to raise _their_ children. And so forth. The living wagers, who want to earn as much as someone who has worked hard to earn more money, just because everyone should have sky tv. There’s a raft of hard non-workers out there, who you are trying to steal a.. erm honest.. living from. How are these people supposed to feel good about themselves if they have to work for a living and pay for their choices???!

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  35. burt (8,034 comments) says:

    If the Government has more revenue than it expected, then why not allow hard working taxpayers to keep more of their income?

    Because then government want to use our tax to buy our votes. It’s that simple.

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  36. deadrightkev (341 comments) says:

    “ACT knows that National is going in the right direction, if slowly, and that compared to a Labour/Green?IMP coalition National is vastly better.”

    Sorry don’t buy the National is the best we can do crap. National and Labour are brother and sister. There is no difference between them in policy or intent. They are both progressive political parties dragging us down the UN agenda 21 and global governance hole.

    ACT survives at the behest of National, end of story. Forget David Seymour as being the man, a goat could get elected if John Key gave it the nod.

    There is a small group within ACT that want ACT to be a one or two seat ginger group bolted to National, Prebble is one of them, he loves John Key. This group resist any form of common sense input to build the party vote, regional growth objective or development within the party.

    The vast majority of members I know want the party to flourish as a broad church and challenge National in every respect. The Conservatives will benefit from this and do well this year.

    This isn’t happening because of board incompetence and resistance within. Jamie Whyte has a much bigger fight from within than he does trying to get party votes in my opinion.

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