Monday, May 30, 2005


United Future, our "centrist" party, is proposing significant changes to the tax system, including large bracket changes, corporate tax cuts, and a 0% rate on the first $3000 of personal income. Some of these ideas are good, some abhorrent (the key aim of income splitting seems to be to promote marriage and financially penalise divorce - something that no government should be setting out to do), but the real problem is how they propose to pay for it. Such reductions would reduce government revenue by between $2 and $3 billion a year - yet United Future are not proposing cuts in spending. Instead, in what seems to be a bizarre flashback to the 90's, they are proposing to fund it through asset sales.

This simply makes no sense. Firstly, tax cuts are not a one-off cost. As noted above, government revenue will be reduced by $2-3 billion a year. Secondly, privatisation will further reduce government revenue, as those SOEs are profitable and return significant dividends to the government. Under United Future's scheme, those dividends will be redirected to the pockets of the rich - exactly as they were during the 90's. Meanwhile, everyone else will suffer the usual side-effects of underfunded schools and hospitals. And if they don't believe that increased funding has made a difference in those areas, and that it can be forgone, I can only suggest they have very short memories.

Selling the family silver to fund tax cuts is not "centrist". Neither is it "sensible". It is now clear that rather being a moderate, middle of the road party of "common sense", United Future are just another bunch of born-again 90's neo-liberals...


yes i have to say when i heard that vaguely on Morning Report, Dunne being interviewed, I assumed i hadn't heard right, being in a different room from the radio. It is certainly not common sense at all. Perhaps they are positioning to be a Nat partner rather than Lab? (although why they would do that given the polls is beyond me)

Posted by Span : 5/30/2005 12:54:00 PM

Dunne was a Minister in the 1996-1999 National minority government. The Nats stood aside for him in Ohariu in 1999. His party is full of moral conservatives. They all want tax cuts. They want to get tough on crims. They believe in the importance of the family. They're anti-drugs. Why they continue to prop up this government is a mystery. I am convinced Dunne would prefer to go with the Nats than Labour, but he is hamstrung by his promise to be sensible and go with the party that gets the most seats. He's hoping like hell Brash does and he can take a few of his MPs into coalition with him and be a Minister again - Internal Affairs maybe?

Posted by Anonymous : 5/30/2005 01:56:00 PM

I/S - The proposed income splitting for tax purposes does raise some concerns. But if one of these is to encourage marriage and discourage divorce ... what about the current system whereby upon entering a partnership, one may lose rights to claim benefits from the state on the basis of one's partner's income? Does this "discourage marriage" or "encourage divorce"?

Anon. - Moral conservatives, tax cuts, "families are good" and "criminals are bad" ... what distinguishes UF from National and the Steven Franks wing of ACT? :)

Posted by dc_red : 5/30/2005 03:49:00 PM

The current system as far as I can tell significantly penalises marriage. And the choice to commit one parent to child care as opposed to both working part time.

As to income splitting itself it sounds like somthing better off people with accountants would do anyway by adjusting who technically owned the shares and stuff.

Posted by Genius : 5/30/2005 10:53:00 PM

hey anon,

Im going to have to correct you on that - Dunne was a minister in 1996 for 6 months when National cobbled up a coalition with the then United Party which was led by Clive Matthewson.

Part of the concessions made in that agreement was that National would stand aside in Ohariu Belmont, which they duly did.

Needless to say, United was obliterated in that election, and Clive Matthewson vanished into the wilderness, and is now on the board of some SOE or other. I think its either the Railways or NZ Post. PD was the only United MP for 6 years, until what happened in '02.

I dont like UF. The lack a sincere vision for the country beyond 'common sense', and 'family value'. 2 terms that sound good to middle New Zealand, but have no real meaning. Obviously their future invloves more market and less social safety net and less worker protections. I dont know how that is going to be good for the family.

Their nasty attacks on the Greens disgust me, and I have to say that United-Future maybe polite and boring, when it comes to personal attacks, they make it a virtue.

Posted by Anonymous : 5/31/2005 11:03:00 AM

dc_red: benefit rules are neutral on the nature of a relationship - they make no distinction between married/hitched and de facto couples (well, except for the "gay loophole" - which they're plugging). United Future's tax policy, OTOH, is specifically intended to force people currently in de facto relationships to get married.

As for "promoting divorce", I think it is important that people are not kept in abusive or simply loveless relationships by economic pressure. Yes, the existence of the welfare state makes it economically easier for people to seperate - but its far preferable to the alternative.

Posted by Idiot/Savant : 5/31/2005 01:25:00 PM