Haven’t been feeling on the same page as Chris Trotter for a while, but think he nailed it with his piece on the Budget in yesterday’s ODT (and other papers). I’ve linked to it from his blog Bowally Road
He described the Budget as self serving lies. Which it is. Designed to make people think they’re getting something, when in reality they’re losing.
But this government may not be as clever as they think they are. I haven’t come across anyone in the community yet who thinks this Budget is going to make them better off. Short-termism doesn’t always pay off.
I know my Dunedin South constituents will find tax cuts and benefit hikes fade pretty quickly as the GST rise kicks in and electricity, rents, mortgage rates start to rise along with petrol ACC levies, you name it. Pretty dire. And then there’s the prospect now being raised of selling off some of our prize assets.
Not to mention the fact that people’s wages aren’t going up and don’t look much like they will. Unemployment in Dunedin leapt from 4.9% to 6.3% in the last quarter.
I wonder who the people are who did get a sense of hope and a boost out of this Budget.
Trotter says:
Perhaps it would all be bearable if, in return for the extra $300-$500 per week we’re allowing them to keep, our captains of industry, financial wizards and heroic entrepreneurs would guarantee the “step-change” this country so desperately needs.
But if History is any guide, that’s not what we will get. If History’s any guide, we’ll just see more of our industries fall into the hands of foreigners; more “Mum & Dad” investors lose their life’s savings; more holes in the ground; more half-finished palaces; more angry denials of any and all social responsibility.
And why, in God’s name, would we expect anything else? The Rich did not get rich by giving – but by taking. It’s what they do. It’s all they’ve ever done.
Yes blame can definitely be attributed back and forth between the major parties until the cows come home.
However, what I dislike the most is the skewing of facts.
Labour wants us to believe such things like “1% getting 15% of the tax cuts” is due to NACT favouring the wealthy.
Not true.
The top 8% get the lions share of the tax cuts because they PAY the lions share of our personal income taxes.
In terms of the top 1% – the majority of these people will not benefit from the drop in the top rate because they are not actually paying it in the first place.
They get huge tax cuts again because of mere economies of scale – they pay the lions share of the taxes collected from $0-70k so naturally get more taxes back when these income tax rates drop.
Further, treasury has said that the lower income & high income brackets will actually be better off by the same amount – that is, they will both be better off by 0.7% with the middle bracket better off by 0.4%.
This puts a huge question mark over Labour’s view that only the wealthy will benefit.
In terms of GST – yes I am skeptical whether the tax cuts will be enough to offset the increases we will naturally face in everything especially when we will have to absorb the cost of the ETS.
I wish GST would be removed from council rates – seems so wrong to place a tax on a tax.
And I wish someone would be willing to say that they will make all raw & staple foods GST exempt.
This along with a commitment to annihilate child abuse in this country would pretty much guarantee my vote.
Yes, the rich pay the lions share of taxes because they can still afford the luxuries of life after they do so (and I’m talking about the rich here, $150K p.a. plus). Hence, it is not an accident that they pay a higher proportion of their income in taxes, it is for this reason and it is deliberate.
Once you take them out of the equation, that loss of revenue has to be made up for by everyone else – many of whom are living very close to the line as it is.
No, anyone earning $150K plus on PAYE will be paying it. That’s a lot of people. Look at the top third of management of any public department or private sector corporation.
This is a misuse of the concept of “economies of scale” which is a term coined around mass production manufacturing.
Of course the rich don’t pay most of the taxes collected from $0-70K p.a., those numerous people on $0-70K p.a. pay those taxes.
And there is nothing “natural” about the rich getting huge tax cuts; these changes were deliberately engineered and designed to have this effect.
So you are saying that the top 1% are all salaried employees rather than shareholder employees (who have the option of drawing their salary/paying their taxes at the end of the financial year or getting PAYE deducted), entrepreneurs or directors? Care to quantify that?