Who is as insulted as I am over PM Key’s statement, reported in today’s Dom Post, around why the highest earners will get the tax cuts in this week’s budget, at the expense of the 92% who earn under $70k/ann (http://tinyurl.com/23natqb)? ”We can be envious about these things, but without those people in our economy all the rest of us will either have less people paying tax or fundamentally less services they provide”
Well, my daughter is taught by a teacher earning under $70k, most of the police who put their lives on the line for us earn under $70k, nurses who fix us up when we fall over earn under $70k, and the vast majority of people who actually make this country tick – the backbone of the nation – earn under $70k. Are these people any less deserving? Do they not ensure that the wheels of industry are well oiled, the streets are safe and our citizens are provided with the services required of a first world country? Of course they do.!
How bloody insulting.! As I blogged earlier this year, there are a myriad of reasons people live and work in New Zealand – and tax is way down this list. These changes will, if anything, drive middle NZ across to Australia and further afield. Mr Key – just be honest with Kiwis and stop feeding us your propaganda: these tax cuts are not about creating equality of opportunity, driving higher productivity, developing a fairer tax system or building more equitable society – because they will not achieve any of these goals. If you believe they will, then I suggest you start studying your economic and financial text books and reading your case studies – those published this century – not last.!
Don’t get me wrong, I am not saying that our high achievers are not deserving – they are – but so is everyone else. The increase in tax through the GST hike to 15% is broad and all-encompassing – so should the tax cuts be.!
The real issue is whether we’ll become like Silicon Valley, California, or whether we’ll become like Fountain Lakes, Australia. From Mr Key’s latest let-them-eat-cake harangue, it’s leaning heavily towards the latter.
As a sign of Solidarity for the 92%, why not donate any extra income potentially coming your way to a worthwhile cause (and yes i am well inside the 92%)
Oh what a short memory you have – and by the way, who are you going to donate your tax cut too and also when you get your next outrageous salary increase (which you will accept wholehartedly while the rest of us wallow) what are you going to do with that. Somehow me thinks you do protest just a little too much. Also, what’s the go with the ‘Axe the Tax’ junket you were all on – seems very quiet now and even deleted this is not kiwiblog Trevor Phil is saying that he wont lower it when Labour gets back into power – and we all know that is not anytime soon – therefore you are quite able to sit back and make all these silly claims from the comfort of your taxpayer office. Oh and by the way, I was a former Labour voter. Voted National this election for the first time in many many years.
Nil wages increase for MPs last year and this – get your facts right Beejay and by the way why steal a heroes name Trevor
On your typical labour green eyed rant you overlooked the fact that all those hardd working people who earning under $70k Nurses,teachers etc… Actually earn considerably more money in a lot of countries where there are more people earning over 70k and paying lower tax, you also fail to see the cohesive effect of low personal tax. With higher Gst it is the high earners who purchase higher quality goods and services at higher cost and now at a higher rate of gst so really they could be paying far more through the likes of gst and property taxes whereas the lower income people with different consumption needs far less, and here’s some food fir thought on the USA the richest 10% pay close to 80% of tax here the richest 10% only pay about 30% so clearly your silly progressive taxation ideas are a failure
The top 10% of Kiwis pay 76% of the tax – thats a lot of $$$ to pay for the teachers, police, hospital workers.
So when they all move to Oz or wherever – where is the money going to come from to pay for all those people??? Oh yeah – Labour – lets whack it on the bill.
John “Antoinette” Key should watch Fight Club.
Who does he thinks cooks his lunch at Bellamy’s, dry cleans his suits or changes his family car’s oil filter.
Labour should celebrate individuals’ personal successes much more vigorously (and not just the monetary successes which the NACTs continuously focus on) – and especially if they are people who are working to lift others up into success as well.
The issue is moving whole NZ communities forward, not about moving the Merrill Lynch and Goldman Sachs crowd forward.
Now, now, Stuart. Don’t be jealous. Folks with loads of money are our betters. That’s how they got rich in the first place. They deserve to drive Bentleys. It’s the natural order of things.
Ben said:
You are completely mistaken on multiple counts. NZ’ers have the second to lowest personal tax burden in the OECD. A lot of these other countries can pay their people more because they have moved their economies into ones based on advanced industries and advanced services. NZ has not. We have a relatively poor economy and poor income per capital. (This is why we are in the bottom third of the OECD).
As for the cohesive effects of low personal income tax – what are you dreaming about. Reducing tax rates for the very highest paid decreases social cohesiveness in increasing socioeconomic disparity
As for your concept of increased GST hitting the rich the hardest. A poorly thought out joke, since those who are poorer are forced to spend all of their incomes just on necessities so GST increases hit every single dollar they have.
The person who pockets $2500 per week after tax in salary – he’ll be lucky to have GST affect even a third of that figure, five star resturants and BMW X3 repayments included.
So…would Labour reverse the projected GST increase and tax decrease? Or perhaps reverse the tax decrease and keep the GST increase?
I ask because it seems some folk don’t yet know if they are coming or going…
I see the Tory ‘diversion brigade’ are hard out diverting. Plain fact is that Johnboy has lost the plot and started to believe his own press. Rock stars can get away with saying they’re ‘better than Jesus’, but not prime ministers.
@ Chris 11.01 Whack it on the Bill is what English did to get the taxpayer to pay for renting his own house for him to live in while he declared he was resident in Dipton for over a decade.
actually jennifer, John Lennon said more people had heard of the beatles than had heard of Jesus (he was factually correct). He was commenting in the context of how crazy the world is that more people know who a rock band is… of course the christian right of America took what they wanted out of it.
Why make any change to the system now? All that’s happening is a tax shift, only the rich will benefit.
Reduce all MP’s incomes to the average wage, then maybe they will fight for the rights of those in the middle rather than those at the top all the damn time!
I don’t have time to read the comments yet
But I whole heartedly agree with you, Stuart. 
@ Tracey, yeah, okay, I did have second thoughts about that line. Never the less, Johnboy has ‘left the planet’ as evidenced by his ‘jealousy’ sermon to the ordinary. The guy’s clueless.
‘Whack it on the Bill is what English did to get the taxpayer to pay for renting his own house for him to live in while he declared he was resident in Dipton for over a decade.’
Indeed. But English is never-the-less a constituency MP , and it is not unreasonable to appreciate that he wants his family with him and that this has necessitated the purchase of another home.Presumably he does do constituency clinics and so on in his electorate and spends at least some time there.
Perhaps it is the balance that is out of kilter and Wellington should be recognised as his primary place of residence…and some acknowledgement that he still has a house in Dipton and parliamentary business that requires that he maintain it.
There is still plenty of scope to check for abuses…self drive cars being used by family members for instance?
@ Loota
Yes and what I am saying is why not have a better targeted Tax system. I personally liked Gareth Morgans idea of a having a tax free $10k which would save a lot of time and circular money flows with WINZ etc… It’s a shame we didn’t have a focus on a better structured economy over the last ten years instead of a consumption and property glut! The bottom line is Cullen let the economy go to hell in a handbasket so you could stay in power and advance social policy and failed to see the interconnect between the two.
I’m fascinated about what you are proposing to do, the reality is those who earn a high incomes have worked very hard to get there (as much as cleaners, nurses blah blah blah), but you seen to have this perception that were all sitting in board rooms indulging in champayne and caviar, you really should go a to a meeting one day, if you did you would find they can be damn nerve racking instense processes and the type of risk shareholders/directors/key management endure compared to the fact “workers” are giving up their labour really is chalk and cheese.
In any event, lets not forget that in a huge period of economic growth the number of IRD returns for those earning over $1m barely moved, the reality is people can avoid higher tax through a myriad of means. I would suggest marching in and pronouncing that they are terrible people with no regard for their common man would have you laughed out of the place, so what else would you suggest, nationalise everything? install a dear leader?
@ Mallard – it was a serious question – petty comebacks on a unrelated issue (the kind of comment you would have moderated out if it was going ‘the other way’) really dont address the problem. So what would you do if the top 10% skipped off to ‘wherever’?
Ben said:
1) No argument that these people have worked hard to get to the top. That’s a lot of personal effort. Just asking that it be recognised that our publicly paid for education system, health system, roads, police, courts,… also have a big role to play in that success.
2) Been to plenty of meetings with senior managers, directors, CEOs, law firm/management consulting/accountancy firm partners, etc. Sure those meetings can be very high pressure and stressful but lunch is always great, and the company bubbly and stellas on a Friday night always superb.
3) The risks that shareholders and directors “endure” – lol few of these players will miss a meal due to the company not making a profit and therefore downsizing operations or cutting overtime; but plenty of the workers might struggle to put food on the table for their families as a consequence. I wonder who is enduring more?
So I actually agree with your statement
Just not in the way that you originally intended.
Reminds of Brittney Spears (or peer) complaining about how horrible it is to be rich and famous, and if only the rest of us knew we would sympathise.
Ben – capital gains tax would be a good start, as suggested by Sam Morgan.
@ Ben, speaking of cheese, remember the ‘block of cheese’ budget? I guess that makes this one the ’slice of cheese’ budget if you’re on under 70 grand. Actually, what can you buy for 50 cents these days? Chewing gum?
Or alternatively if you’re on $150K a year, its the “Dinner for Two at Logan Brown” tax cuts.
@Jennifer
No not chewing gum. That more expensive than 50c I thought.
What about 5 eskimo lollies. That will help families a lot. Expecially since food will go up above the 15% gst. They will still try and use $9.99 or $8.99 or $2.99 etc so it looks cheaper. They will just round it up to the nearst one they can.
You seem to forget that a lot of NZ businesses are SME, in some cases hard working NZers who have mortgaged the house to start the business and worked all the hours under the sun to keep it afloat. I know of people who are Manager/Director and Shareholder, paying themselves LESS than the minimum wage to keep the business going and keep the employees employed so yes I stand by my remark that the comparisons between employees and business owners are vastly different.
@ A Mother, what I simply cannot get my head around is you can have a guy worth 50 million bucks get up and say ‘make me richer and you’ll be better off’ and he is not ridiculed from all quarters. There is something really screwed up going on here.
Aah Mr Nash you seemed to have missed the point again: John Key merely recognises the grave INJUSTICE served against those earning more than $60k by the previous Labour government for the best part of their 9 year tenure.
$60k+ very quickly dropped in real value when 2000 rolled round yet still they had to pay 39c in the dollar.
And top tax rate aside, it still makes me FURIOUS that Labour thinks that taxing those on $14k at 21c in the dollar & those on $48k at 33c in the dollar is fair. Must be great to have such security you are so insulated against the huge cost of living.
All the while this same party who proclaims to care so much for the masses, allowed the few – that is the top 8% or the ‘rich’to avoid paying the top rate of tax by hiding their money in trusts or companies and worse still, in some cases claim WFF.
Labour appears to be the defender of the underdog in theory only.
Posts like this only serve to reaffirm this and completely undermine all the good & new rhetoric we have heard from Phil Goff lately.
Wouldn’t it be nice to have some recognition from the Labour party that they got it wrong, that our tax system is very unfair and has been ever since they brought in the top rate.
Don’t get me wrong, I am all for high taxes when earning a fair whack of money, but I am deeply resentful of how Labour failed to recognise how $60-100k was so quickly undermined by the massive hikes we saw in 2000 onwards in power, petrol, house prices, rents, childcare, school fees, food etc etc, failed to adjust the tax thresholds & failed to increase the minimum wage to a living wage $12.50 in 2008 is appalling!
I think though that it is wonderful how Phil Goff has validated this, but posts like this make me wonder whether the rest of the party have still to catch up.
Jennifer: I don’t think you can even buy chewing gum for $0.50
@ Chris 12.42 Oz for a lower top tax rate – yeah right.
Rebecca said:
So why didn’t National simply lift the top tax threshold to $90,000 or $100,000 p.a. instead of benefiting those on $150K/200K plus the absolute most?
Especially with your closing comments:
I would have thought you would have been a strong proponent of a move like this. This is of course NOT what NACT have done since it wouldn’t benefit the truly high income earners in the same way.
Ben said:
Then the top tax rate won’t bother them at all will it, since they fall well below that. So they aren’t a concern in this discussion are they?
Loota – no way, I am all for people who have a high disposable income doing their bit to help their fellow man – most of us were born in public hospitals and went to public schools.
I just want the current loopholes closed and the tax thresholds more reflective of today’s costs and personally don’t believe in things like WFF – I think lower taxes would be more beneficial as you get to keep your own money instead of having it deducted then given back less the cost of employing public servants to process your entitlements…
Re “So why didn’t National simply lift the top tax threshold to $90,000 or $100,000 p.a. instead of benefiting those on $150K/200K plus the absolute most?”
I agree but have NACT actually confirmed what they are doing? I didn’t think they had? Isn’t the budget this week? You never know perhaps they will lift the thresholds – I sure hope so. If no, well at least we have assurances from Labour that they will should they be re-elected next year.
P.s Loota – I think Ben is referring to the anomalies where people get to structure their affairs so that they don’t have to pay high taxes or as much child support etc – very unfair.
I think Guyon Espiner raised quite fairly in Q and A the other week that we see a lot of Labour Attacking the government, but they don’t use that same platform to actually promote what they would do. An opposition that wants to get into government should show leadership, and not get bogged down in these minor issues. I know that many in opposition consider it fun, but for NZers, we want to see a viable alternative to govern, not a group of whiners.
Actually, higher wages along with a more progressive tax structure would be more beneficial. WFF was an attempt to keep the same low taxes while helping those that needed the help. Targeted assistance to those that need it is a good idea but you need the income to pay for it.
“WFF was an attempt to keep the same low taxes while helping those that needed the help”….don’t you mean same high taxes? They creamed the taxes off families struggling on $60k for 5 years before finally bringing in WFF..which helped but if they had recognised how the cost of living had changed & adjusted the tax thresholds then families would be have much better off.
Yes more progressive tax is the best way forward I think – I have always been in favour of the schools of thought argued by Gareth Morgan etc (first $10k tax free etc).
Higher wages can only come about when businesses are doing well – how we had almost stagnant wages accompanied by high taxes in a time of unprecedented economic growth & prosperity is beyond me.
In terms of trying to generate higher wages when businesses are only just starting to re-gain a bit of growth, well I will leave that to the economists.
oliver
“not get bogged down in these minor issues. I know that many in opposition consider it fun, but for NZers, we want to see a viable alternative to govern, not a group of whiners”
On this basis you didnt vote National in 2008, did you?
Tracey – you saying it is ok cause National did it, is a prime example of taking minor issues, putting them against people, and making them personal, rather than actually showing leadership and tackling the issue. I couldn’t care less whether National did it or not, if they did then does it make it ok for Labour to follow? or should they be showing more leadership than that and a viable alternative to govern?
IIRC, David Cunliffe is in favour of lifting the tax brackets over cutting actual rates.
On the wider issue – which goes far beyond taxation rates – the trickle-down theory corpse has been exhumed and reanimated. Yet there’s a real danger the corpse will turn on its master.
Oliver – nice swerve but no dice. I am NOT saying it’s ok for one to do it if the other did. However you are saying you want Labour to change that behaviour, good for you, did it stop you voting for National when they behaved that way all the way up to election night and then beyond?
I thought it was a simple question.
Whenever asked about anything they started by saying “for 9 years Labour…” as though that was sufficient reason to not do anything?
DeepRed said
The next right wing corpse to be reanimated will be that the private sector always do a better, more efficient job at running things so we should sell everything not bolted down to them (at a cut price of course).
Someone should point out the BP disaster which looks roughly about the size of 50x Exxon Valdez currently, where internal company memos downplayed the possibility of something like this ever occurring so they didn’t spend the money to prepare for it, and weak heavily influenced Government oversight signed off on it. Whoops.
The tories never change.
Firstly, most people that get hardcore enough to get online blogging around politics take more factors that most into consideration before changing their intended vote. So to isolate it down it didn’t effect my vote. However, for a flip voter looking in that doesn’t take as much into account, if their perception is that Goff is just blaming the Government and not offering any viable alternative it would certainly be one of the factors to consider – yes.
I also did not say that I wanted Labour to change their behaviour, if anything as a National supporter I want them to keep it up. Though as a fan of politics generally I just get exhausted with lets blame and attack national personally for everything, yet not release any alternatives, it looks silly, and for me as a political geek I can’t have meaningful debate about alternatives options because there aren’t any.
@rebecca and loota,
I mean it both ways, yes you point out one of many rorts, but in the other sense people who start their own businesses are making that type of sacrifice for a good many years to begin with to try and sustain their business, all while employees earn consistent generally rising wages thats the difference
Ben, startup SME’s should receive good tax breaks and every encouragement in the first several years of operation.
Now, lets talk about the big boys – the major corporates and the highest paid elite amongst them. After, that’s what Stuart’s post is about.
Ben said:
Very amusing since statistics show time and again the elite awarding themselves pay rises (or somehow getting them, e.g. MPs and Ministers) way in excess of the average workers “rising wages” that you refer to.
By the way, once you remove inflation I think you will find that real wage increases for the average worker are what they call…mediocre.
“@ Chris 11.01 Whack it on the Bill is what English did to get the taxpayer to pay for renting his own house for him to live in while he declared he was resident in Dipton for over a decade.” Trev if you want to go down there then how about govt cars being in accidents driven by MP’s children or for me excessive travel bills both being paid out of taxes PAYE workers worked damn hard to earn. You have an issue with Bill almost unhealthy, and I agree with Chris 12:42
But to keep on message Stuart I await the Lab sheet of promises to se your version of things. I hope it is mot anythink like the $1/week gift of removing GST of F&V to the min paid and then giving the the same wealthy who earn of $130k of 5 times as much per week then you are no different than Nat is giving more to the rich than the poor. I just hope next year that you Lab have an emcompassing tax and social welfare policy that is linked and not some take from A to pay for promises to B, and the system is no better off
I’m jealous. I ‘d like an extra $500 a week the top earners will get to pay down my Serepisos sized rates bill. The rates bill I’ve attracted because I chose the wrong industry to invest in. Yup, bought into property to provide for myself in retirement and come budget day I’m going to get poked in both ends.
Loota
“2) Been to plenty of meetings with senior managers, directors, CEOs, law firm/management consulting/accountancy firm partners, etc. Sure those meetings can be very high pressure and stressful but lunch is always great, and the company bubbly and stellas on a Friday night always superb”.
And perception to an outsider in one. Do you know how boring company bubbly and stellas actually are? Don’t you think we’d rather be dining and boozing with our mates than with the likes of you? Just like you would rather be with your mates than with us. The only time it’s fun is when your clients are your mates. The rest of the time you have to behave yourself as your entire client relationship that may be worth 100’s of thousands of dollars to your boss or yourself if you are the Boss is continually on the line. You want pressure? That’s pressure. Now try pitching for new work and repeating the process. Try balancing budgets and paying staff and when the cashflow doesn’t match, having to not pay yourself or delay your pay while you pay workers who must be paid on time. That’s why some SME owners don’t reach the top tax bracket, not because of any tax structuring – they simply cannot afford drawings or to pay their own wages as they are too busy paying other people.
The issue is this – teachers, policemen and nurses are generally there because they WANT to be. Some are too thick to get into accounting, law, commerce or medicine at University and not entrepreneurial enough to run their own businesses. But most haven’t the sense to try because they LIKE their jobs. They LIKE what they are doing and feel a sense of power that they would not have anywhere else in life with their intellectual or entrepreneurial traits that do not measure up.
They know the pay is limited but they do it anyway. Have you thought why? It’s the power. All three “professions” lord it over either children (teachers), sick people (nurses) and criminals and even law abiding citizens (Police). Sure they help those people as well in many circumstances but do not think these people are selfless for doing what they do. They are there because they want to be.
As for Stuart saying that people under $70k are the vast majority that “make this nation tick”?? What nonsense. These people can be replaced at any stage with similar workers. It doesn’t mean they are not important but all work because they have to work. Almost all work in their jobs because they can’t work in a higher paying job because guess what? They would. This includes delusional people who say they could get a higher paying job but don’t want to. They don’t want to because they’ve made a personal decision that the whole thing is too stressful.
If a small business owner is employing 30 people then I am sorry, but he or she is more important than those 30 people and he or she is what really makes the nation tick, as does a large corporate that employs 2000 workers. Without the owners, there would be no work for those people, and no taxes from those workers and that business to pay the Police, teachers or nurses.
“Goff is just blaming the Government and not offering any viable alternative it would certainly be one of the factors to consider – yes.”
1, Who else is he going to blame, they are afterall the government.
2, It’s not the right time to be releasing policy AND not their job to do so as opposition.
3, They (Labour) are great and G
FF shouldn’t be bashed for doing his job. 
@ Spud.
The old not time to release policy line wears thin – labour criticize items that they have no answer for, and cannot even back their own positions. They just oppose everything regardless.
Still – the most we can expect them to do is put out a tax payer funded bus with a slogan that they refuse to commit to – because its not time to release policy – yeah right! They just dont have any!
It’s “old” because it makes good political sense.
I think most things in politics wear thin, get spun around and fluffed up again
It would be munterish of Labour to commit to reverse the GST hike when they don’t as of yet know where the country’s finances will be in 2011. But at least they got out their and shared their opinion with the country.
And they got to see the scenery and drink some booze too. 
And in doing so they were spreading the wealth around the cafes and pubs. 
They Lab and some writers seem to oppose the nmy just because they are. Yet as commented on before the wisdom to eliminate depn on residential housing is a great idea, and that Lab toyed with the idea but did not take it any further, no problem when Lab think of it but when Nat do then it is a bad idea. I hope that comments re removing tax loopholes are in the budget then we can see some policy benefiting the country. Pity Lab did not push this concept. But hey I love paying the max tax (being PAYE) whilst the filthy rich (under the protection of Lab)can benefit from them by getting refunds/subsidies and gaining wealth as the investment increases and also creating a huge social problem.
I am looking for with high expectations of a master plan from Lab, if there is not one then I and many others could see the lack of depth from the protectors of the poor and middle class.