Posts on the economy, work, business, income, and labour
National’s budget broke a number of economic promises. One that’s not been emphasised enough is their commitment to be fiscally neutral. Labour got New Zealand to $0 net government debt. Now we are headed back into the red again and National is making it worse, not to create jobs to help ordinary Kiwis through the recession, but to fund tax cuts for their rich mates.
According to Social Development Minister Paula Bennett, the welfare debate could get nasty: “we may even see an ugly side of New Zealand”. Well here’s a newsflash – the welfare debate is already ugly. The Nats have worked long and hard to make it ugly. Paula Bennett the ugly side of New Zealand is you.
The best form of welfare is a decent job. During it’s nine years in power, the fifth Labour government cut the number of beneficiaries by 150,000 by getting people into work. So assisting more sickness and invalid’s beneficiaries into work is a good idea. But you can’t help people into jobs that don’t exist. The danger is that the government will simply make it harder for people to get the help they need.
The dearth of long weekends this year has made me feel cheated. And now with Queen’s Birthday over it’s a long wait till Labour weekend in October. That’s not fair dammit. It’s time to give Matariki its due and celebrate with a Monday off in July.
According to a new report: “New Zealand is a great place for children if their parents have a good income, live in a warm dry house and are well educated.” However if you’re not born into a privileged household, then death and disease “is worse than that of all but two [developed] countries, Mexico and Turkey.”
One of the most popular uses of trusts is to hide income for tax avoidance or evasion. So, I was happy to read about the IRD’s success in a recent court case against two surgeons. The court found these two very rich men had used trusts to avoid tax to the tune of $168,000. The case will have big ramifications, potentially shutting down one of the biggest tax rorts in the country.
Tall poppy syndrome. It’s one of those useful, mindless terms that comes up again and again in our political discourse. Like its cousin ‘PC’ it is used to delegitimise any criticism the behaviour of those with privilege and power towards others. It survives because it is useful to an elite, not because it makes any sense.
National really, really wants to sell assets – it’ll be worth a fortune to their rich mates who can’t seem to generate any success on their own without a government hand out. But the public is firmly against asset sales. It would be an election losing campaign issue. So, National will play a game of ambiguous promises and confusing financial moves to sell without appearing to sell.
Read this story to understand why the real economy in New Zealand struggles to get ahead of a volatile currency driven by overseas […]
I am ruling out selling Kiwibank at any point in the future/Asset sales are on the table for a second term
We won’t be raising GST/We’re raising GST
My trust is so blind I have no idea what’s in it/Owning a vineyard is great fun
Anyone else seeing a pattern?
The neoliberal dinosaurs at Anti-dismal have presented their defence of National’s privatisation agenda by responding to my post “Privatisation: the facts”. Their responses offer an insight into the neoliberal mind – asset stripping is good, it’s fine to get ripped off when selling assets, and who cares that the ‘mums and dads’ line is bollocks, the rich deserve the assets more.
After 15 months, just 10km of the 2000km John key Memorial Cycleway has been built at 3 times the budgeted cost. I’d like to see Goff take Key up on his offer of a ride on his recession-busting national cycleway. They’d be done in half an hour. Key’s flagship policy was always a joke and, now, everyone’s laughing. Come next year, voters are going to look at this record and say ‘on yer bike, John’.
National’s second budget has induced a lot of inflation – 5.9% over the next year. Interest rates on term deposits are just 4.4%. Collectively, New Zealand’s savers will be $2.3 billion worse off in a year’s time than they are now, thanks to the Budget. The flipside is the real value of mortgages will fall. Borrowers win and savers lose. I thought English said he was encouraging savings.
I knew that disasters in rich white countries get much more media than disasters anywhere else. I knew that oil was a dirty business. None the less, this article on the real costs of cheap oil surprised me.
Audrey Young reports that Paula Bennett has once again abused the trust and power that is given to her as a minister in her campaign to paint all beneficiaries as bludgers. I don’t know anything about this family. But if this family is not entitled to their benefit then Bennett should do her damn job and get them off it. If they are entitled then she shouldn’t be accusing them of being bludgers.
For her own petty political purposes, Paula Bennett has put Natasha Fuller through hell. Now (finally) the Privacy Commissioner has asked Bennett to apologise to Fuller for the damage she caused and pay her $15,000. Predictably, this awful person has refused. Paula Bennett, you are a disgrace to your office and a disgrace to New Zealand.
Here’s a graph of tax week’s tax swindle. I can’t do the property tax/rent increase part but here’s the net weekly effect of the income tax changes and the GST hike. These numbers match up with those provided by Treasury. The first 1.2 million taxpayers get less than a dollar a week. The first 3 million (of 3.4 million) get an average of $4.24 a week. The top 100,000 average $105 a week.
Seeing as the theme of the day has been inequality and class war, this video from the Daily Show is very appropriate. Interesting […]
Pointing out that a “rich get richer” budget is going to increase inequality in NZ seems to be making the Nats uncomfortable. Bill English tries to simply deny the facts. DPF tries to divert attention to “social mobility”. Lame efforts in both cases. The truth is that inequality isn’t on the Nats radar. They simply don’t care.
The Right claims that people who aren’t on high incomes are just lazy and need to work harder, and, so, are undeserving of a fair deal. It’s insulting, it’s false, it’s just another excuse for maintaining the wealthy’s privileged position. Most people who work long hours are on low and middle incomes. And there are hundreds of thousands of low income Kiwis wanting more work.
We don’t expect the state highway network to turn a profit but we know it contributes enormous value to our economy.Airports, seaports, and telecommunications network add more to the economy than just the profits of the companies. Same with rail. But what will come as a surprise, given the Right’s constant attacks, is that Kiwirail will also be making a $4 billion profit in the next decade.
I love that John Key is so desperate to show some progress on his memorial cycleway that he’s even going along to the opening of cycleways that aren’t funded with its money. On Sunday he showed up at the opening of a cycleway in Oamaru. The cycleway was funded by the council and NZTA. The recession has been over for a year – not a single job has been created, no cycleway built.
Tories claim that tax cuts “cause growth” in the economy – they “grow the pie”. But it’s rubbish. No honest review of the long term historical picture can sustain the claim. Tax cuts don’t cause growth.
There’s some mean little barbs hidden in the Budget. National has abolished a tax rebate for redundant workers that helps you out if you are made redundant and your payout pushes you into a higher tax bracket. It’s a petty mean-hearted attack from an increasingly rightwing government. In fact, this insult to hard working Kiwis is an exact repetition of what they did in 1992.
The other day, we had a satire guest post about ‘thank the rich day’. Michael Laws appears determined to out do us: “On Thursday, this Key/English administration decided to abandon the pretence that we are an egalitarian society, or that we should ever attempt to be so. The wealthy are the wealthy because they merit that status, was the prime minister’s underlying message.”
Colin James makes a good point in his latest column which talks about the rightward shift this budget has created: Longer term, the […]
John Armstrong looks at the typical John Key-style punt that lies behind the budget.
Meanwhile Tracey Watkins has calmed down after the excitement of seeing the size of her tax cut and is questioning why Key is so afraid of anything but tightly managed media appearances.
It’s interesting to see how Irish’s ‘rabbit from a hat’ metaphor has taken off for describing this Budget. Some, like Tracey Watkins, are even using it positively. She needs to have a bit more of a think about what the rabbit from a hat is. The rabbit itself is nothing special. In fact, in this case it’s a borrowed bunny, despite the media’s tendency to portray tax cut as costless.
Amongst all the budget reaction, there is a group of people that I don’t understand. They are the small group who are very well off, and who are nevertheless exulting about tax cuts that give them a few tens of dollars a week. Is your allegiance really purchased so cheaply?
In 2008, Bill English was sprung secretly telling National members that he and Key would sell Kiwibank “‘eventually but not now”. After being caught out, English and Key categorically ruled out asset sales in the first term of a National government and said they would seek a mandate to make any sales in a second term.
In what it seems to think is an act of benevolence and economic genius, National has decided to borrow a pile of money, cut key public services, put up GST, and give me an extra $1000 a year. Will it make me work harder? Hell no. My partner and I are already paid plenty. If anything it will make us look at ways to reduce the amount we work.
John Key’s “Don’t Be Jealous” Budget has done little to stop the European contagion from ravaging our sharemarket – at time of writing down […]
There’s some useful scenarios to look at on the beehive’s tax site. They show how we all pay less tax, even after GST, and somehow the government also gets more tax. I love maths like that. But some of them seem to have something missing, so I thought I’d correct a couple of them…
Have you figured out what the Budget means for you? I’ve been looking at the media statements, reading the spin, deconstructing the commentators and trying to work out where it gets me as a parent with young children….
What does Treasury make of National’s economic plan according to the Budget papers? Here’s the outlook for when National is kicked out of office at the end of 2011: Workers’ share of the economy will have fallen from an already miserable 43.6% to 41.5%. GDP per capita will be lower when National leaves office than when they entered it. Real wages will drop 2%.
Let’s get this straight. Borrowing a billon dollars for tax cuts while cutting services is not centrist.
Even if tax cuts go to middle and low earners too.
Meanwhile the opposition is MIA.
