ENGLISH: The basic point is… We spend a lot of time on this. The basic dynamics of it are… you look at it from the punters point of view – they’re saying they don’t like the government, and Clark, they took all this frickin’ tax off me and they spend billions of it, and it went on What’s Up badges and websites and bullshit
NATIONAL DUDE: Yeah
ENGLISH: They got a bit fat.
NATIONAL DUDE: Yeah.
ENGLISH: And all our work tells us they’re pretty keen to keeping the bit they’ve got. And we call them Labour-plus voters – and they’re sitting there thinking “that nice man Mr Key is pretty smart – he’ll get me a bit more.” They’re not saying “that nice man Mr Key will take something off me” – they’re saying “he’ll give me a bit more”.
And the reality is if we had been the government with the surpluses they had, we would have had something, like working for families, but not the same. We would have given them quite a bit of cash back. And what happens is – you go in there to try and change it, frankly Don and co got a bit carried away, cos they didn’t understand it. If you give people money then, it is very hard, there’s a set of inevitable problems. It’s like physics, right. If you push something up its gonna drop. If you give people cash, you have high marginal tax rates. OK, that’s it. You can’t get round that. Don thought he could but he couldn’t. So did John, actually – but you can’t. So the only – the raw choice is: fix the problems; or take money off them. And there’s no way you can fix the problems without taking money off them. So we’re sitting here saying the punters are keen to keep it. They’re facing a recession. The last thing we want is to spend the whole election campaign with families of four on TV saying “Mr Key’s taking money off us”. You can’t do that.
NATIONAL DUDE: Yeah.
ENGLISH: So later on we’re gonna have to have a bit of a sort out. Yeah, we’re gonna do something, but we can’t do it now.
NATIONAL DUDE: What about selling Kiwibank?
ENGLISH: And actually, we just have one guy with a spreadsheet. And it’s bloody complicated.
NATIONAL DUDE: I’m sure you’ve Lockwood Smith’s spreadsheet…
ENGLISH: Oh yeah yeah, it is.
NATIONAL DUDE: What about getting rid of Kiwibank, I mean…
ENGLISH: Well, eventually, but not now. Well, its working. A lot of our supporters get a bit antsy about it, but its working. It’s like a lot of things…
The Working for Families aspect is very interesting. People forget National actually introduced child tax credits and the like. Labour gave it a slogan, and extended it. So it is quite unremarkable that Bill says National would have done something like WFF, but not the same. I expect it would have been like the 96 and 98 packages where National both cut taxes and put money into family support/child tax credits. It has been the lack of balance from Labour which has been the problem.
The comment on high marginal tax and abatement rates are the same comments I made last week – it is a very challenging trade off.
The full Kiwibank quote is revealing also, because it has Bill saying Kiwibank is working, that there is no need to change anything despite supporters being antsy. That is pretty obviously saying nothing will happen against the policy – just a desire for the future.
This will of course be messy, as any taped conversation is where an MPs personal opinions differ from a party’s position. A tape recording of what Michael Cullen really thinks of tax cuts would be fun. But does that mean a party will break its election promises? Nope – both Labour and National did that in the 80s and 1990, and have been scarred by the experience since. No one wants to be a one term Government.
I fully expect National in Government will look at Working for Families (in fact I strongly urged them to do so) and also ownership of certain assets. And if they come up with a good case for change, will include them in their manifesto for the 2011 election.