Sunday, May 22, 2005

National's unsustainable tax cuts

Don Brash's promise of "tax cuts by Xmas" if National is elected underlines the complete reversal that has occured in New Zealand politics. Once upon a time, National were supposed to be the responsible economic managers - but now they're promising to blow the budget with no thought for the future. Meanwhile, it is Labour that is carefully ensuring that the government's books are balanced, that it has enough for bad times as well as good, and that today's spending is not simply a transfer of wealth from our children. The fact that they're able to do this without compromising on social spending makes it all the more remarkable: it shows that National's claim that such spending is unsustainable is simply rubbish.

By contrast, it is National's promised tax cuts which are unsustainable. While they look good against record surpluses, those are expected to disappear as economic growth slows; the OBERAC (effectively the rise in the net value of our assets) will drop by $2 billion next year, and the government will start running cash deficits again. This means that a significant tax cut would have to be followed by deep cuts to government spending - which given where the money is spent, would have to come out of the core areas of health, education, and welfare. Unless they sell assets, of course - or borrow (something they seem disturbingly comfortable with). Either way, future New Zealanders will be paying for it - whether it be as serious illness, poverty, and crime, as lost income, or as outright debt repayments. We're still paying for the last time National did this (why are we having to spend so much on rebuilding hospitals and roads now? Because National didn't do it during the 90's. Why are we having to spend hundreds of millions of dollars on bribing teachers and doctors and nurses to stay here and educate our children or care for us when we are sick? Because National didn't do it during the 90's). We shouldn't let them do it again.


I guess the fact that they hsve quite frankly idicated that borrowing can support tax cuts is real scary. The other thing that worries is this rhetoric about the "bloated beuracracy" blah blah. For fucks sake, this gov't has spent time building up a public service to serve us as a properly governed country should.
Aaaand have you noticed the "Wacking Machine" in operation at the Herald and Stuff, Dom Post et al quite overtly giving every thin a big or little spin aginst Labour but of course Fairfax and APN really do need the Nats back in order to have things their way
Good work Idiot
Tauranga Kid

Posted by Anonymous : 5/22/2005 06:36:00 PM

I think not being in power (or worse yet not even expecting to be in power) does that to a party.

Posted by Genius : 5/22/2005 09:12:00 PM

What really disturbs me is that the two biggest parties are arguing over how much to cut taxes for the rich, despite the huge array of problems the country faces which require government spending.

Posted by Commie Mutant Traitor : 5/23/2005 09:57:00 AM