I’ve wanted to blog this several days ago, but out of respect I’ve held off. But hell have I been sickened by the way certain people have not seen the earthquake as a disaster, but an opportunity to clamour for higher taxes.
I’m not against a debate on how we pay for the earthquake damage, but to my mind here’s the rough order of priority after the earthquake:
- Find and heal the wounded
- Provide emergency assistance to the survivors who need it
- Find and bury/cremate the dead
- Work out the cost of rebuilding Christchurch
- Decide how to pay for it
But within just three days of the earthquake, we had both politicians and media demanding tax increases, and insisting the PM rule things in or out. For fuck’s sake – couldn’t that wait until you know after we’ve stopped pulling bodies from the rubble?
The media get some criticism here. Last week they asked the PM whether he would increase taxes, and he said he didn’t want to rule anything out. So of course the headlines are Government looking to increase taxes, until the Govt then ruled that out. Then this week they ask if certain spending programmes are off the table, and merely because Bill English refuses to make decisions on the hoof, the headlines are that this spending programme may be cut.
Could the media please refrain from asking such stupid questions until we are past step four, and especially when we are not even much past step one. Until the costs of the earthquake are known, such questions are stupid and to be blunt offensive.
But politicians on the left are also to blame. Russel Norman on the 25th, a mere three days after the quake, blogged in detail about how much he wanted taxes to go up (temporarily it is claimed) for those earning over $48,000 a year. He has absolutely no idea how much the earthquake will cost, but regardless has tables showing how he would raise $487m a year.
I can’t comprehend how one’s immediate reaction after an earthquake is to ask the Parliamentary Library to calculate how much extra revenue one can gain from an additional tax, and then blog about it. Did he think that if he waited a month it would not still be a topic for discussion?
Such a post a month after the earthquake would be fine. But within 72 hours. My God.
As to the substance of should there be a tax increase to pay for the earthquake, I’m surprised so many on the left have forgotten their Keynesian economics.
There is no doubt the Government is going to face a bill of many billions. Some of this will be through the EQC and some through the consolidated fund. I would urge the Government not to be stingy, and believe they won’t be (even though of course they can’t cover everything).
The EQC funded stuff is not a problem – just like any insurance company, levies will be set to make sure reserves are adequate.
So the debate is for what you fund from the consolidated fund. And the left are arguing that one should increase taxes to pay for it. Now increasing income taxes dampens economic growth – so at a time when we are on the verge of going back into recession, when already GDP growth projections have dropped 2.0%, they want to contract the economy further.
Increasing taxes in a recession (which we surely will now be in) is plain dumb. And worse, its is being promoted by people who are just using the earthquake as an opportunity for their sock the rich mentality.