Island Life by David Slack

Deflowered At Last!

It's a shame so many Public Address readers dwell behind language filters, because I really wanted to begin this post with that most excellent Anglo Saxon expression that implies you would like someone to have intimate relations with you. Let's just say I'm astonished. I have just been offered an election tax bribe of large proportions and I am agog.

I had thought I'd be sitting this particular dance out, but no, it turns out that because I'm an exporter, I could be in for a tax break of righteous proportions. All my export earnings will be taxed at just 20 cents in the dollar. All I have to do is put the tick in the box for….New Zealand First.

Yeah Winston, that'll happen.

You can read their tax policy here, and I draw it your attention because it may have slipped by you in the blaze of publicity that attended the other one today. Sure enough, the National Party has done the one thing I decided not to stuff around with when I designed the tax cut calculator. It was a bit too elaborate to try and offer a version that showed you what might happen if you moved the thresholds, and so I skipped it.

Well, now we know: The bottom threshold gets moved up from 9,500 to 12,000. The next one applies all the way to 50,000; the next to 100,000 and from there on up, you're back to the 39 cent rate.

That's enough to make a difference, no question. I've had a short play with their calculator and it's very instructive indeed. They take full advantage of the opportunity to demonstrate that if you don't have kids, the Labour package gives you "Nothing". And, well, why wouldn't you? If there's one thread that's emerged from the irate bloggers of the Whitney Houston generation it's that they don't seem to care much for that old line that children are our future.

What's interesting about the Nats' own (handsomely designed, I must say ) online tax calculator, given that they have elsewhere derided Working For Families as a welfare beneficiary arrangement is that that they present its numbers alongside their own under the heading "Personal Income Tax You Get Back."

So what do the taxpayers of New Zealand stand to get back? Surprisingly similar amounts in various permutations I've tried so far when I punch in calculations for various family units with children. (UPDATE: Although thanks to Frogblog I see that you're a good deal better off with Labour at incomes in that 40-50,000 range.) Should you not have been "blessed" as they like to say in America's Bible Belt, well then you're out in the cold under Labour, but stand to pick up a thousand or two or three under National.

But there's always a but. It depends on a few things going right: they have to be able to achieve the thick end of half a billion cutting out waste, and I refer regular readers once again to the words of Graham Scott - there's some fat there, but it aint easy to get at, and you want to be careful you don't overestimate how much you'll find.

That's the first thing that has to go right.

The second is that they have to somehow find a way to make their spending promises cost a lot less than Dr Cullen says they will - roading and the parole they'll be abolishing, for starters.

The third is that they'll have to hope that by doing this, they don't give the interest rates a nudge back up and wipe out whatever gain they achieved for the hard working New Zealand taxpayer.

The fourth thing that has to go right is that they have to get an outright majority or someone other than New Zealand First to vote for this in the House.

Not forgetting they'll also need to get hold of the right kind of eye of newt.

It's all a much bigger ask because at roughly 4 billion versus 400 million, their deal ends up costing almost ten times as much as Labour's.

Last year all seems a long time ago, when Dr Brash was hosing down expectations among the party faithful about any kind of tax cut in the first term. In fairly short order we've seen John Key urging an altogether more pragmatic fiscal approach, and the philosophically pure Dr Brash bending to the popular will.

Likewise, the Labour finance minister of rectitude seems to have found himself under pressure to let go of ever more money to achieve a third term for Helen Clark.

A friend in the money sector says the popular consensus amongst the traders and bankers is that John Key has a superb set of antennae but no compass. Don has one, that's for sure, but I sometimes get the feeling it's one he borrowed from ACT, and if that's so, Mr McCully and Mr Long probably keep telling him to put it away.

This close to the election, though, I think the compass has far less bearing on what happens next than the antennae. And that goes for both major parties.

In compass terms, we are actually presented with an excellent distinction now between a party that sees merit in redistribution for advancing the overall good, and a party that believes in unfettering the economy and leaving things as much as possible to market signals. Many voters dividing along those lines may well be settled on their choice already.

But in the big pool of uncommitted voters sloshing about, you have to ask: is it philosophy that will exercise them, or brute numbers? All the way back in 1975, my Granny talked to me about politics for the only time I can recall in my life. She said she would be voting for that nice Mr Muldoon, because she couldn't go past the money he was going to put in her pension. She knew exactly how much that would be. And that was without the advantage of an online calculator.