Key has now said that he will not introduce an increase in GST if the data proves that some kiwis will be worse off, or if he can’t get support from the Maori party. What..??? Astounding.!
The government’s Tax Working Group presented its discussion paper on GST at the end of July last year, so the govt has had all this time to do the figures around this important piece of tax reform. What have English and Dunne been doing for the past 6 months? Both Key and English have previously said in the House and the press that no New Zealander will be worse off when GST is increased to 15%, but now we have this amazing admission that perhaps they were wrong. We always knew they were – and told them so – perhaps they should have listened to the party that represents the many not the few: NZ Labour.
As for the Maori party – again, Key, English and co have had 6 months to consult and build concensus with their coalition partner on this important issue, but obviously didn’t even tell them their plans before the PM’s state to parliament. Some coalition, some partnership - where’s the trust.?
So Key’s flip flop appears to be an admission that he is wrong re the numbers and a case of out-and-out incompetence (wouldn’t want to be Bill English at this moment in time). As for the Tax Working Group – they must be wondering why they bothered.!
Yeah, maybe, but they’ll still manage to lie their way out it.
He hasn’t actually flipped at all – they said that they were considering it (not that it was 100%) and he assured that cuts would be in place to make sure people would not be worse off – he is saying the same thing different ways.
I guess you will have to wait until May like the rest of us to see what he does.
“Key has now said that he will not introduce an increase in GST if the data proves that some kiwis will be worse off, or if he can’t get support from the Maori party.”
Really? Weird. Is is possible to put a link up to this, Key’s new new new position on this issue?
http://www.radionz.co.nz/news/stories/2010/02/12/1247f1fff03f
The drop in their overnight tracking polls must have been spectacular.
Thanks Tigger.
Saw it coming!!!
An amateur government with an amateur PM. I don’t expect to see much public response to this flop-flip short-term, but, if I were in the National Party and had any responsibility for strategy, I’d be deeply concerned about this. This is not a responsive government; it is an incoherent government.
So, No GST increase = no tax cuts then….
Hmmm, The election in 2011 should be very close..
Hopefully the NZ public will vote accordingly…
Peter, the NZ public will forget by then. Unless Labour gets closer enough to its former core values to succesfully mark itself as different from national then the only way it’ll be government again is when “it’s time for a change”.
Can I just ask, what was this Big Tuesday about if the Prime Minister is willing to sell out the key talking point of it by the morning of the third day?
Don’t get me wrong, I don’t agree with the policy, but if you aren’t prepared to back the proposal for three full days, why would you think it was a good idea in the first place?
@ Anton Craig.
It will be up to Labour to make sure the NZ public don’t forget. Strongly agree with your comment!!
Hmmm, Labour’s 9 years of flip flopping including that they were going to increase benefits to pre 1991 levels, but didn’t, state they can’t afford tax (“Jam now, it will be crumbs later”) then suddenly find some money out of thin air….what the…? Astounding!
http://www.youtube.com/watch?v=Q1d2XfsdV4I&feature=player_embedded
Just to reiterate this government is entirely poll driven. They let out bits and pieces tot he media, who gratefully regurgitate them. National Polls, gets a lie of the land then makes its “official” statement.
These guys have been treating all their voters like idiots long before actually becoming government. Like it or hate it Hollow Men accurately outline their strategy… they attacked the messenger (Hager) and so-called right thinking NZers discounted the book. Take the time to read it and see the strategy employed prior to 2005… the only realy change to 2008 was the name of the leader. Dont get me wrong, I know Labour carries on some of this BS too, they just dont have as much money to do it “as well” (read to prevent them getting exposed/caught)
Conscientious, are you stating that because labour flip-flopped it’s ok for national to flip flop? I find all lying unconscionable, no matter who it comes from.
English says that some people want a perfect shiny tax system.
Maybe he was referring to his boss.
Labour should be careful that this ‘rethink’ is just a media strategy to get the broken promise off the front page. So the news stories are all about the ‘thoughtful JK’ rather than the ‘two faced JK’
Tracey definitely not. However, politics and lies are synonymous. This is the game we love to call Politics. Integrity may come through the front door but it most certainly slinks out the back door as soon as they realise that it has no place in politics, that it is not something that ever gets the votes.
Actually, I stand corrected, Janette Fitzsimmons proved that you could “play the game & not the person”.
For the rest of them however, it is all about who can score the most points. Haven’t you noticed how remarkably different Phil Goff & John Key each appear when on Breakfast TV vs ‘debating’ (for want of a better term!) in the house. On the news etc they each come across as personable, respectable, intelligent & rational men yet in the house – well, 5 year old boys behave better!
@contientious: Labour flip-flopped on restoring benefits to pre-1991 levels some time in the mid-1990s – from memory actually quite soon after the cuts themselves. There was, however, a whole range of cuts Labour made to social welfare from 1999 that were made largely with the help of a general but unfortunate change in attitude towards the poor that occurred through the 1990s, and which Labour took full political advantage of. If there’s still any truth in the old saying “you can judge a government by the way it treats its poor” then there’s currently no difference between Labour and National. I think this is something Labour needs to begin thinking about if it really wants to expose the pseudo popularity John Key and has mob are currently enjoying.
My guess is that there will be another flip-flop in the budget and GST will go up 1 October 2010. Tax cuts will come in 1 April 2011 and by then all the sheep will have got over the GST rise and think what a good bunch of guys the Nats are to give them a tax cut as a reward for working hard through the (Labour) caused recession and vote accordingly.
Don’t get sucked in. The overnight polling is truly dreadful. This is just damage control spin. It won’t work, of course. Keep the pressure on. The Maoris will roll over, and Key will claim that means its all okay. It will not be. There will still be plenty of losers, and plenty of big time winners at the top end. But the MSM will run it as another example of adept political pragmatism by the god-boy Key. Don’t buy into it.
I imagine that the overnight polling , for some the first they would have heard of it was when the question was asked. I can imagine the response would be ‘ You must be kidding me!
Perhaps the analogy would John Key hopped on a ferry called GST Rise and then suddenly wanted the boat to turn back.
What can be done to expose the Key-English lies? Bernard Hickey’s expanation on Morning Report a couple of days ago was very good, even I got a glimpse of understanding, but there needs to be a new and fresh way of explaining this to people. You can find the truth but you have to look hard for it. It’s unbelievable that Key et al can say that everyone’s going to win, announce the opposite (give to the rich, take from the poor), but people still, generally, believe that what Key’s done is magnificent. Pulling him up on so-called flip-flops is fine, but he can wriggle out of this so easily. There needs to something done that exposes the deceit.
What about ACT? Will he can proposals they don’t agree with? If he keeps stuffing things up, I predict he will have no coalition partners left.
TopCat
What has ACT got to be upset about??? They are successfully selling Auckland to their mates, their populist clap trap “3 strikes and you are out” is law, and Douglas is getting most of his policies through…
I just heard the Maori Party saying on radio that increasing GST would not be a coalition buster. if not this, then what the hell would be?
Darien – after what Pita Sharples said the other day probably not even abolishing the Maori seats – the party will still get what ever time’s left up until the next election, so hey, that’ll be worth it!!! Seriously though, while I don’t really think there’s too much in what Pita said about remaining a minister his party’s lack of stamina on the big issues including those that negatively affect Maori is bloody disappointing. I really thought he had the intellectual nous to cut it in politics. I’m still hopeful he can learn though. There’s certainly at least a modicum of humanity left in Pita that others like dead eyes john-boy key don’t have. We’re just going to have to wait and see.
@Anton Craig : Love the “dead eyes”! So apt. There’s some big tests coming for the Maori Party -I’m reluctant to pick on them, because it’s National and Act that are the real problem, but they are trying to have it both ways. We have to call them on it.
Isn’t there an opportunity in all this “flip flopping” for Labour to now, or at least by May, stake out an alternative vision on tax, at least on a couple of big picture items?
We articulated some good principles, there must be some ground national won’t tread on that we can stake out? Taking GST off fresh food is a clear policy. The nutty cases on the edge don’t change the fact this will help people on struggle street. If food is too tricky home power supplies and water are fairly universal and well defined.
Is it time for a re-think as to why the bloated prices we pay for milk,meat (electricity-there’s a nice easy one to take it off)etc really need GST on top? Is such a potential 5-10% vote winner really so “impossible” especially if coupled with a mild tax on second homes or home equity above say $400,000 so that its fiscally neautral.For those on fixed income with stupendous land values there could be a relief scheme like there is for rates. OMG labour might lose its huge Pakuranga water front vote!
The other point for the apologists for Key are that any compensation package will be eroded over time whereas GST will blow out with other price blow outs that track ahead of CPI etc.
The Maori party supporting a GST increase even reluctantly
is surreal. Maybe they did threaten to walk behind closed doors? or maybe they’re trying to leverage yet more “elegance” down of the beach in return for GST -but then Key has to watch the Pakuranga waterfront vote on that one.
The problem for the MP is that National has the GST votes from ACT (and in return for what?) and the MP has still to get anything for whanau ora and get what they want on F and S. They won’t leave the coalition until they get something government – whanau ora is the more likely.
It’s probable they won’t get what they want on F and S, in the end they are left with whanau ora as their coalition pay-off (here of course there are many non Maori groups who want a piece of the government devolution subsidiarity cake too – who National is also playing to) and otherwise having abolishing Maori seats off the table for the 2008-2011 term (and 2011 referendum options).
richard
Precisely.
National is gathering money from ending depreciation write-offs for property and ring fencing property losses and better CG income tax liability collection by IRD (at least a billion dollars overall) which will afford a top income tax rate at 33 cents and a company tax at 27 cents (around a billion) – which is apparently now preferred to the earlier option of alignment at 30 cents.
None of these three fund-raising ideas is wrong – but the money could have afforded other options and these could be outlined.
- matching Oz on R and D tax incentives and depreciation for plant and equipment rather than cutting the company tax rate for their banks any further (I prefer a company tax rate at 33 cents).
This area is one of old fashioned business and real workers and Labour should be on their side against the suits who just want company vehicles to lower their tax liabilities.
And the idea of transferring revenue obtained by tax changes in the property sector to real production speaks to the issue – not cutting peoples personal income tax rates.
As for GST – options that National would reject should be mentioned by Labour – such as GST off food (common internationally where GST or VAT apply) if the rate was increased (that should have been done when the rate went above 10%).
some great posts – thanks for the ideas and feedback. Will take them to the team for discussion.
Personally, I think the Nats underestimated the level of public outcry over this proposal to increase GST. Esp if it is to finance tax cuts to those 9% of kiwis earning over $70k.
Cheers Stuart and SPC
I agree with SPC (as a small business owner) that 27% and probably 30% is just too low. How can that be sustainable socially? Hey I hate tax time like the next business owner
but I still live in the community where hospitals and schools are needed. I also agree that for producers plant depreciation and R & D. Any simplification for small to medium business would be great.
hey a related issue re employment…
I’m in the services area of my now 4 full and 4 part time staff in NZ 3 could described as “at risk: Ove rthe past 12 months to do my bit I took a punt with 4 of whom 3 have been really good. I have had to invest in trianing and suppervision big time. I got a little bit of support from MSD through Skills Investment subsidy for 2 but got this flatly and arbitrarily refused for the other two at different Eork N Income Service Centres. The subsidy means that I bumped them up to 30 hours per week and gave them at last 6 months guaranteed employment.
I found the down time in begging for the subsidy and then putting in monthly returns and then awaiting sometimes late payments a big call on my time and cashflow. A THREE TO SIX MONTH TAX REBATE FOR NEW EMPLOYEES NOT CURRENTLY IN EMPLOYMENT WOULD BE PRO JOBS, COULD STILL INCLUDE A DOL CHECK THAT AGREEMENTS ARE LAWFUL, WOULD BE EASY TO ADMINISTER the employer would still show the PAYE on the monthly return (ie could be prosecuted for tax fraud if they lied about the hours and pay) the credit would come back like the old Kiwisaver employer credit and would reduce the rest of my PAYE tax bill. MSD’s subsisdy is at 50% I suggest setting it at say $40 of gross pay for the first and 20% for the second 3 months and 10% for the final 3 monmths to encourage obngoing employment.
The registration of the employment agreements could be online with spot checks to avpid abuse which is what the MSD work brokers are supposed to do now.
If a rise in GST happens, which looks likely, English should give a tax break to everyone by having an no-income-tax band at the bottom of the earning scale.
If the reckless deficit spending sprees by National and Labour governments were brought under control, we could probably eliminate GST altogether and have a tax-free band of the first $50k of income.
But I guess the people wouldn’t know what to with their own money. National and Labour think it’s better to let Nanny spend it for them.