Murray McCully's squeeze says everyone will hurt; perhaps presages some of the associated talking points from the government.
The Listener's political columnist Jane Clifton thinks there probably won't be a person left in the country not adversely affected by today's Budget.
Ms Clifton says the difficulty for Labour is what the alternative is because the tax increases it's suggesting are aimed at people who are not wealthy in reality.
"It got into trouble when it was in Government for just that reason because what it deemed the wealthy income earners are actually mostly wage slaves like doctors, plumbers, teachers, nurses, police officers and so on," she told Newstalk ZB's Mike Hosking.
When we look at the GDP growth forecasts vs reality for the same period, the answer becomes clear. Every year, National has projected that a return to strong growth is just around the corner which will mean more tax take, lower benefit costs – and a smaller deficit. But it hasn’t eventuated.
And the second graph on this associated post is quite chilling.
So basically, we could eliminate Treasury and replace it with an Excel script to generate a "good times just around the corner, growth return to 2.5% track" scenario, and save ourselves a pile of money.
Palmerston North •
Since Nov 2006 •
National- and all the 'budget-cutting' govts- always seem to seriously under-estimate (or completely ignore) the compounding effects cutting govt spending has on the over-all economy. Back when ruthless Ruth was at the helm, I remember seeing a break-down of some of the cuts- and for every dollar of govt spending cut, after calculating lost tax revenue and lost economic activity, it 'saved' the govt (at best) about 25c (in some cases, it had an over-all negative impact on the govt books, where job losses took people from tax-payers to beneficiaries.) I suspect this will be a zero-growth budget- clearly accompanied by forecasts of growth plucked out of the air. Zero-to-negative growth, with a big serving of no-ideas-at-all. And that's just from what National have already said.
I would like to see two added tiers to our current regime. Say 39% on over 80k and 45% on over 150k. I can't see this hurting too many nurses, teachers or police. And if people are earning over 150k they can't complain about not having enough money when that would probably be something like 4-5 times the median individual income.
It is not so much about squeezing out more tax from those already paying a fair whack but dealing more directly with tax avoidance, especially through devious family trusts. Interesting too, to see the information that came out this week about the low rates of taxation asked of NZ dairy farmers. They probably have family trusts for each cow.
But I doubt that National would have the courage to tackle this
Screen & Media Studies, U… •
Since Oct 2007 •
If they limit to Working For Families to the poorest, but don't do anything about family trusts I could imagine that as a effective talking point- "National are cutting support for middle New Zealand, but leaving it for those whose wealth is hidden in family trusts". Of course, to mount this argument, Labour would probably need to be prepared to do something about family trusts, and I don't really see that as likely.
Depends on what the doctor does...I know 3 - 2 GPs (one a trauma specialist, & the other with 3 advanced qualifications), and the 3rd an opthalmologist-surgeon. The last makes over double the GPs' income. And works about half the hours they do.
The GPs make well over $250,000 - gross. There is the small matter of practice costs to be considered. And I'd hate to be carrying their mortgage burdens...
Big O, Mahitahi, Te Wahi … •
Since Feb 2007 •
I can see this budget being a "Do nothing but shift the deckchairs" budget. What we will get will be financially neutral and achieve nothing in itself. What will happen though is a big spike in inflation which will, in turn, effectively lower Government expenditure. Wages will rise but then so will the cost of living, the Dollar will drop in value compared to Asian and European currencies but continue to gain over the US Dollar ensuring an increase in fuel prices over an extended period. This is great for those with large mortgages as the real cost of repaying that mortgage will be eaten up by inflation. However, this will lead to more expensive borrowing for businesses and GDP will stagnate or fall and our overseas debt will continue to rise. Fail. 2c worth.