Monday, December 02, 2013

Tax-cuts and asset-sales

The Greens' Russel Norman points out the obvious: National's asset sales are driven by the need to make up revenue given away in tax cuts. And the plan is failing:

National’s tax cuts for the top 10% of income earners are costing more than the revenue generated by National’s asset sales, Green Party Co-leader Dr Russel Norman said today.

Parliamentary Library and Green Party calculations show that, by the time of the 2014 election, the reduction of the top income tax rate for the top 10% of income earners will have cost over $4.5 billion. The asset sales programme produced only $3.9 billion worth of proceeds to the Crown to date, even before sales costs are deducted.

“National isn’t selling our assets to pay for schools and hospitals; they’re flogging them off to fill a hole left in the budget by the tax cuts that they gave the top 10%,” said Dr Norman.

“John Key’s assets sales are part of a money go round. The well-off got tax cuts from National, they then bought shares in National’s asset sales, and the sale proceeds are going towards covering the cost of those tax cuts.

If we hadn't had tax cuts for the rich, we wouldn't "need" asset sales, and we wouldn't be driving ever faster towards a more unequal society. But National probably regards the concentration of wealth in the hands of its donors and cronies as a feature, not a bug.