Red Alert

The no credibility car park tax

Posted by on March 15th, 2013


FBT Action Group bumber sticker

New Zealand desperately needs a fairer tax system.

Labour stands for a capital gains tax because wage earners carry the can for wealthy property investors who too often pay almost no tax at all.

We support progressive tax rates because it’s wrong for the poorest in our society to subsidise big tax cuts for the richest.

Opposition to the National/United Future Government’s new car park tax unites unions and business because its administration will cost more than the tax will collect. That’s just crazy.

And those administration costs will disproportionally hit the poor, because it’s vulnerable female cleaners working at night for minimum wage who’ll lose their safe parking (not the bigwigs).

Labour stands firmly for better public transport in Auckland. But the car park tax simply isn’t intended to deliver that.

Any theoretical revenues from the new tax are earmarked to be chucked down the deficit hole.

That’s because the National/United Future Government have staked their entire economic credibility on two measures: reducing taxes and returning the Crown’s books to surplus.

Well they’ve completely failed on the tax reduction front. John Key and Peter Dunne have introduced more new taxes than any Government since Rob Muldoon. As well as the car park tax we’ve had the paperboy and papergirl tax, the increase in GST, higher prescription charges for the elderly, pickpocketed tertiary students, and cuts to services all over the show. Last week they even announced a rapacious tax on Christchurch rebuild workers’ accommodation!

With regards to returning the books to surplus, well we’ve had 4 years of John Key’s deficits. And the only thing New Zealand has to show for forced austerity are these new taxes which make zero financial sense.

So the National and United Future parties aren’t just scraping the bottom of their own credibility barrel – they’ve dug right through and they’re on their way to Greece.

It’s time for this Government to come clean and acknowledge their trickle-down dogmas don’t work in the real world.

It’s time for a plan to make New Zealand’s tax system fairer so we can see sustainable growth in jobs and the wider economy.

And a very simple start would be dropping this costly and absurd new car park tax.

Motivated by the pressure from their traditional backers and funders, I won’t be surprised if National concede on the car park tax pretty soon. If so, expect to see Tory ministers abrogate collective responsibility as they desperately try to shift blame onto United Future and Peter Dunne for this debacle.

15 Responses to “The no credibility car park tax”

  1. Daniel says:

    So can I presume Labour will wholeheartedly support a fringe benefits exemption for public transport passes for employees?

  2. jennifer says:

    Dunne is bought and paid for. And they got him cheap, which is why they have absolutely no respect for him.

  3. PlanetOrphan says:

    The “Deficit Hole” great description, the only place we print money ….
    Well said David.

  4. David Farrar says:

    Hi David,

    You make some good points about the administration costs may be more than the revenue – in which case it should not proceed.

    But can you clarify what is Labour’s position if the tax does proceed.

    You seem to imply that Labour would repeal it. But David #2 (Parker) would not commit to that and David #3 (Shearer) also would not commit to that either.

    Can you arrange a conference of the Davids so we know which position is correct, and whether or not Labour would repeal extending FBT to carparks if elected?

  5. Arkonaut says:

    David you said that it is not good enough that we have had 4 years of deficits since National was in government. How many years of deficit were forecast when you left government?

  6. Salad says:

    Thanks David. Thanks for reminding me why I am voting for the Greens and not Labour.

  7. the pigman says:

    Uh oh, seems those Tory ministers have wheeled out David #42 to flog some old memes, too 😀

    As for Daniel – I wonder where in DC’s post you saw that policy announced? Perhaps you should take your Straw Man and crawl back down the hole and wait for the Revolution… make sure you arm him to the teeth, though, because old Strawman won’t last long.

  8. bbfloyd says:

    So, it seems our reactionary brethren would rather play silly word games than actually address the real issues…(fartar, orky,salada)… No surprises there… Then we have “this little piggy” capping it off with a nonsensical rant that disappears up itself(strange indeed what happens whaen reactionaries try to use their own words)…

    Back to realityland now… The cost of parking in Auckland has been a major problem for years…. Taxing employees who work for realistic companies, that have recognised the burdon on their employees that parking costs are, is purely, and simply, an obviously desperate action by a desperate pseudo government, that has hollowed out our ability to function in a rational manner…

    What’s next? removing the last of the tax rebates available to those earning under $200.000 pa? Removing childcare subsidies? ..

    The list of things that could be stolen from those without the political clout to fight it is rather a long one, and there are NO reasons to assume this particular raiding party(current Govt) wouldn’t stoop to using every avenue available to continue subsidising wealth accumulation, at the expense of the people who are the “engine room” of any sane, functioning society….

    The central issue here, to me, is that the only reason parking has become such a vexed issue in the city is because of reactionary govts bleeding money from auckland to the benefit of their sponsors, which has left the city without the public transport system it has been in desperate need of for decades…

    Indeed, apart from one or two notable periods, auckland has been deliberately starved of the funds required for infrastructure that would have circumvented the “gridlock” that typifies an average day for aucklanders….

    I can only imagine what auckland would have been like to live in if Sir Dove myer Robinsons vision for auckland hadn’t been strangled by the holyoak/muldoon governments, and their operatives (citizens&ratepayers)in the city itself..and then buried by the Bolger/shitly govt(you know, the one tories try to pretend never existed)

    It doesn’t take too much imagination to see just how much easier it would have been to develop a credible public transport network by building on what he had envisaged for the city…Equally as easy to invisage the lack of pressure to provide massive amounts of parking space that network would have brought about…

    To try to defend the petty theft this pseudo government has become noted for(and was reduced to within weeks of taking office) by adopting arrogant poses designed to give the impression of “superior knowledge” exposes the fatal weakness in the firmament of reactionary politics…

    Not ONE single point that is relevant to anything remotely attached to this issue…No surprises there…again..

  9. Daniel says:

    Hi Mr Pigman,

    Not sure if you quite understand what a strawman is.

    I may have been a bit presumptuous to think that a post talking about the tax treatment of parking spaces, and the effects of that on public transport, was a place to talk about the tax treatment of public transport.

    But if Labour, and I quote, “stands firmly for better public transport in Auckland”, then it stands to reason that they should remove the fringe benefits tax from public transport passes for employees – the current situation gives an unfair advantage to employers who would encourage their workers to drive (through a free parking space) over those who would pay for, or subsidise, their employees commute on public transport.

    And I know it’s a bit of a cliche, but gosh, aren’t these Labour supporters a bit defensive? (and for the record, I’ve split my vote Lab/Greens the past two elections, but will be going all Green from now on, at least until Labour wake up from their stupor)

  10. George says:

    Why are car parks so valuable anyway? Who is responsible for the car parking shortage?
    Is it part of the Minister of Housing’s unaffordable housing policy?
    Is it the Minister of Transport making yet another obvious error in transport?
    Is it the Minister of Local Government for allowing local bodies to create money machines for car parking interests?
    Is it all three?

  11. Matt says:

    @David – “they’re on their way to Greece”. Not that this can EVER happen. And the deficit/surplus mania continues without any understanding what they mean. I mean, “deficit hole”, nice neo-liberal and political nomenclature which fails to understand basic national accounting…

  12. David Cunliffe says:

    Some interesting comments above that deserve response.

    @ Daniel (first comment)- “Will Labour wholeheartedly support a fringe benefits exemption for public transport passes for employees?” Labour is considering options to encourage public transport. More on this in due course.

    @ DPF: Question on ‘what happens if the tax is implemented?” is moot as it won’t be. The three Davids are entirely lined up on this. Nice try.

    @Arkonaut: lets not confuse a specifc tax with overall revenue levels – Labour thinks this particular tax makes no sense. We are however committed to a tax system that is fair, efficient and raises the revenue the community needs for public good activity. While our 2014 fiscal framework is yet to be determined, our 2011 had higher levels of revenue than National’s, in part because of the capital gains tax and some significant anti-avoidance measures. I woud expect both features to remain (subject of course to due process). So it does not follow that beacuse we opppose several unwise taxes that we are giving up on progress and equitable taxation policy!

  13. David Cunliffe says:

    @Matt: on the deficit, in a longer and more technical post I would have drawn out the difference betweeen three different deficits – the Crown’s fiscal balance (referred to above); the nation’s external debt ((comprising both public (about 15%) and private (about 85%) debt)); and the trade/current account deficits – which are the flow in a time period of the change in the external balance.

    It is Labour’s strong view that a good government must have regard to all of these important matters, and certainly not just focus on the first to the wanton detriment of the other two. Hence our combination of CGT, strong savings policy and other measures to help reduce private debt; prudent fiscal management to contain and reduce Crown debt; and active economic development and monetary policies to improve the external balance.

  14. bbfloyd says:

    “New Zealanders like their cars. It’s as simple as that”, says transport minister Gerry Brownlee. And that’s why no amount of investment in bikes, buses and trains will fix Auckland’s congestion……

    In his own simplistic, insultingly generalising way, uncle Gerry has let slip the real reason behind a carpark tax…

    The assumption is that the cost of parking, once congestion reaches near perpetual gridlock, will be so high that a tax would deliver an appreciable amount of money…


  15. Matt says:

    @David – the govts current fiscal deficit is too low, the output gap is massive. External debt; as long as govt debt is denominated in $NZ that’s a non-issue, and primarily the result of trade deficits & excessive interest rates. Unless National’s done the incredibly stupid and issued foreign currency bonds. Private debt is an issue, but for shareholders and bondholders if all goes pear – depositors can always be protected via govt. Trade deficits; biggest misnomer, exports = real costs & imports = real benefits to NZs. One could flick off a list of consumer goods produced overseas…

    The problem with those policy prescriptions is that they’re rather contradictory. Firstly, I think the CGT is weak. Either tax it on a progressive income scale or at the highest rate. KiwiSaver by nature demands higher govt deficits. So, prudent fiscal management, whatever prudent is, would involve larger deficits and by the nature of our bunk legislation more public debt. But, the banks will be pleased not to have to source their Tier 1 capital overseas…