Tuesday, May 08, 2012

Crashing the books

More bad economic news today: the government's tax take was down by $1.57 billion. The government is of course blaming the earthquake (a politicians' dream get out of jail free card), but the real culprit is their ruinous tax cuts for the rich, which have devastated the government's revenue base. And this shortage of revenue will now be used to push for more cuts, more austerity, and more privatisation in order to "rebalance the books" - providing a double dividend for their rich mates.

So when on Budget Day Bill English stands up and talks of the need for "sacrifice" and belt-tightening to get back into surplus, remember that the government's economic problems are largely of its own making. It is pursuing these policies not because it has to, but because it wants to. And they created this strategic deficit to provide them with cover, by making it appear necessary.

As for the future, the obvious way out of National's self-imposed starvation is to reverse their tax cuts, and make the rich pay their fair share. And that is the first thing a Labour-Green government should do when they regain power.