Phil Goff’s response to Prime Minister John Key’s statement on February 9 has resonated strongly within Chinese and Ethnic communities.

The speech has been “heavily” quoted in the Chinese-language media in NZ and been at the heart of many political debates in the community.

Last Friday Phil Goff gave a comprehensive interview with Auckland-based WTV on various issues including GST, R&D, how to grow economy and “catch up with Australia”.

Common sense would tell that if the Government is serious about catching up with Australia we need to look after the bottom 50 percent of wage earners not the top 5.

In New Zealand, the total income earned by the bottom 50 percent of taxpayers is about 17 percent proportionally, and the total tax they pay is 12 percent. While in Australia the bottom 50 percent of taxpayers pay the same proportion of tax of 12 percent, but the total income they earned is 25 percent.

To put it in lay-terms, Australia’s bottom 50 percent of taxpayers have a bigger share of the total income, which means income is more equally distributed in Australia before tax is taken into account.

If National are really keen on closing the gap with Australia, the focus must be on the bottom 50, not the top 5.

Feel free to use this translated version of Phil Goff’s speech.

And to the National supporters that read this, if you read Phil’s speech with no prejudice, you will see why Phil has been so warmly welcomed by Kiwi-Asians.

During the huge Chinese New Year Celebration on Saturday 13 February attended by over 65,000 people, I was proud to learn that Phil Goff had more photos taken from the crowd than the Prime Minister himself!

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9 February 2010 Media Statement

Phil Goff’s reply to John Key

Once again, we’ve heard the rhetoric – but there’s no substance.

It’s Alan Bollard one, John Key nil.

It’s proved Alan Bollard right – John Key’s promise to catch up with Australia is a hollow one – there’s nothing in this speech that represents step change.

Instead, it’s a step back.

There’s no bold plan or any plan at all.

This was hyped by the Prime Minister’s team to be his most important speech.

It was Big Tuesday, they said. More like Tiptoe Tuesday.

He signals a rise in GST, which I oppose, but he trembles as he says it.

“We’re only considering it”.

“No decisions have been made”.

“We’ve asked for more work to be done on it”.

They’ve left a bolt hole they can scamper into when the heat gets too much.

They say they want a fair tax package but they know that it is really about mates’ rates.

Cutting the top income tax rate down to 30% would give the PM, on his salary alone, $509 a week. He doesn’t need it.

Paul Reynolds would get $2600 a week.

Someone on the minimum wage would get nothing, which comes after the miserable 25 cents John Key gave them last month.

A person on the average wage of $48,600 gets 35 cents a week and on $70,000 just $12.69.

And GST would hurt most those who have to spend all their income to make ends met and particularly those with children.

Compensating people for the rise would leave just $200 million more in revenue out of the $2.2 billion in tax take from extra GST, according to Treasury.

Why would you bother?

Aren’t people paying enough for the things they have to buy? Low and middle income earners will ultimately pay more income tax as inflation puts them into higher tax brackets.

Mr Key should tell us who are the winners and who are the losers, but he has failed to do so because the real winners will be his well paid mates.

The bulk of New Zealanders at best will just get compensation for increased prices from GST, if that. They will pay more for their bread, milk, power and their kids’ shoes and school fees, and their block of cheese.

But this statement wasn’t just about tax. It was about the Government’s overall programme to advance New Zealand.

In that, it lacks substance, it lacks conviction, it lacks anything new.

It is a series of reheated announcements we’ve heard before.

Like late night TV, it’s repeat after repeat.

The Kopu Bridge – funded and initiated by Labour — has been re-announced for the 11th time. Even though National’s sole input was to bring it forward by six months.

R&D, where National abolished the $2 billion Fast Forward Fund and repealed the R&D tax credit, has been suddenly found by National to be important.

But they say there’s no extra money to put into it. Australia increased their R&D by 25% and John Key pretends he has a plan to catch up.

John Key said Alan Bollard was wrong about there being no plan to catch up with Australia. He was negative, pessimistic.

But in fact Dr Bollard and the rest of New Zealand were right to be cynical.

New Zealand has the potential to be world beating, with its resources like water, its environment, ingenuity that gave us the digital effects behind Avatar.

But the National Party does nothing in this statement to unleash that potential.

And for all John Key’s rhetoric, his Government has widened the gap not narrowed it.

New Zealand’s unemployment, always lower than Australia’s, is now 30% higher.

Australia has invested in skills and education. National here has dumped the New Zealand Skills Strategy, to the dismay of unions and employers alike.

One in five Kiwi young people are not in work, education or training.

In Australia, it’s less than one in ten.

Where is the plan today to get 168,000 unemployed Kiwis back to work?

Over a quarter of these New Zealanders have bee out of work for more than six months.

Where is the commitment to turn around the sad situation we saw in South Auckland two weeks ago – 3,500 people desperately queuing for 150 low paid supermarket jobs?

John Key last December said he was pretty happy about the unemployment figures. An extra 18,000 extra Kiwis were joining the unemployment queue as he made that statement.

He described unemployment as a backward looking statistic. What he’s actually referring to is human beings who have lost their livelihoods, with all the personal, social and financial costs that entails.

He claimed last week that his Government has done “as much as we possibly can about unemployment”.

That’s simply untrue.

The job summit was just hot air – the talkfest he claimed it wasn’t going to be. At best it saved a handful of jobs while tens of thousands were losing them.

The Aussie’s took serious steps to deal with unemployment and got it down across the Tasman.

Here we just got political rhetoric from Mr Key and Mrs Bennett and unemployment has risen to the highest level in 17 years.

What in this statement gives hope to hard working Kiwi’s to help their families get ahead?

Hundreds of Kiwi families struggled last year to pay their bills as real incomes fell.

?to be continued?

The Labour Cost Index this month showed that 56% of salary and wage rates didn’t increase last year but prices continued to rise and will rise further with GST.

Public servants were told not to expect a pay rise for five years by a Minister of Finance who secretly doubled his housing allowance to higher than what the average worker gets as a full-time wage.

Those on the minimum wage got a miserable 25 cents an hour more – less in the hand at the end of the week than the cost of a family size packet of WeetBix.

Middle income earners found that they were working harder but not getting ahead.

Change to the tax system could help. Labour cut company taxes, gave tax credits worth hundreds of millions to families through Working for Families lifted 130,000 children out of poverty, and stimulated the economy with big personal income tax cuts in the 2008 Budget.

National on the other hand gave the bulk of its tax cuts to the highest income earners and nothing at all to families with kids earning under $40,000.

The tax changes foreshadowed here do little or nothing for hardworking low and middle income earners.

If and where tax loopholes are closed and a level playing field is created between different areas of investment, we will support that but there is no evidence of benefits from this tax package for low and middle income earners.

Then there was John Key’s promise that he would look after the most vulnerable. Empty words when you consider he was cutting assistance to severely handicapped children and assistance to those in second chance adult and community education while subsidising elite private schools with tens of millions of extra funding.

Empty words and political spin too when he came to McGehan Close in my electorate, insulted the residence by calling it a ‘dead end’ street nut promised to help those there he termed an underclass.

Remember the spin around taking young Aroha up to Waitangi and giving her mum a job.

What do they say in McGehan Close now?

Joan Nathan says she has been let down by the Prime Minister and her daughter Aroha now wants nothing to do with him.

She says she and her family are worse off since National won the election.

She says she’s “pretty anti with Mr Key at the moment”.

“He just made everything worse for us and made it easier for the ones that are higher up. I’m struggling every week”.

The job she was so generously given by the National Party mysteriously became redundant. Jackie Blue said her office had merged with Sam Lotu-Iinga.

That’s funny. One’s in Dominion Road Mt Roskill. The other in Onehunga Mall.

And Mr Key who said in 2008 that “the rungs of the ladder of opportunity has been broken”, stopping people like Joan Nathan from getting ahead. She says in fact National cut the training allowance she would have got to undertake a job skill course.

Where in this statement is the National Party’s blueprint for lifting skill training and dealing with educational underachievement.

15.4% of Maori are currently unemployed and for young Maori it’s probably one in 4.

At 14% for Pasifika people it’s not much better.

Flying a sovereignty flag over the Harbour Bridge won’t help that, but I guess it will distract attention from the problem.

Soon this Government will exhaust the publics’ patience for political spin.

This statement today was a chance to set out a plan to a real difference for New Zealand.

A chance to share the benefits of international economic recovery across all New Zealanders.

To build an economy that can close the gap with Australia, create growth through building skills, promoting innovation.

But once again it has let the opportunity slip, has offered to serve the few not the many and to tinker around the edges rather than implement change which will matter.

This statement by the PM fails on all counts.

This entry was posted on Friday, February 26th, 2010 at 3:50 pm and is filed under Labour Party, asian, economy, ethnic. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.