Thursday, February 21, 2008



We don't exist

Last election, National tried to buy their way to power by offering tax cuts for the rich. This election, they're promising to do the same. But since Brash's tax cuts (which Key helped design, and which would have been funded by borrowing) weren't big enough, they've decided to up the ante: on KiwiFM this morning, John Key indicated that his tax cut package would be on the order of "2 - 3 hundred dollars a month".

Firstly, I don't believe for a moment that Key is promising this to every New Zealand taxpayer. Yes, he's deliberately trying to give that impression ("vote for National and you'll be rich!"), but $3,600 a year is actually more tax than almost half of us even pay (Treasury: Who pays tax... and how much?). And if it was distributed evenly in that fashion, the cost would be utterly staggering: $11.5 billion - almost half of core output expenses (that's your basic government ministries in Wellington), or more than the entire health budget (Budget 2007 summary tables [PDF]). Not even ACT would be that insane. So what's Key playing at?

Simple: the figures are for his base. One of the things that is clear from the right's discussion of taxes is that they consistently show no interest at all in the 80% of us who earn less than $50,000 a year (see for example their criticisms of Kiwisaver, which are predicated entirely on its benefit for the richest 3.5% of the population). So, how much would you have to be earning to get Key's "2 - 3 hundred dollars a month"? If this election's bribe is anything like last one's, then the answer is more than $75,000 a year. As for the rest of us - the 90% who don't earn that much - we just don't exist as far as National is concerned.