Thursday, May 28, 2009

It’s a Liars’ Budget

In what has already been dubbed by commentators “the most important Budget of our generation,” Bill English and John Key have already signalled they aren’t up to the job.
In a time of near desperate straits, when every productive New Zealanders desperately need every dollar of working capital they can lay their hands on to keep themselves and their employees above water and to begin the recovery that is so desperately needed, this pair  of thieves are about to announce  that they’re unable to get their ship properly in order; that as a consequence their profligate borrowing will further weigh down productive NZers; and that the very election promise which offered a glimmer of hope – the promise of tax cuts on which they were elected – is now about to be shamefully broken with the excuse from this pair of weasels that “we never saw it coming.”
If they never saw the world economic collapse coming, they are incompetent.
And since the slump had already begun when the promises of tax cuts were made, and re-pledged, they are liars.  As Brian Rudman pointed out just yesterday, “Key and English knew about the global crisis as they pledged tax cuts at last year’s election,” and they sailed blithely ahead making promises they never intended to deliver.  In fact, given that New Zealand’s economy went into the slump before the world slump began, it’s even more imperative that the engine of NZ’s economy be given back the fuel it needs to kickstart a genuine recovery. 
Instead that engine is to be starved of fuel so this government can instead stoke the flames of “entitlement spending” and feel-good bullshit.  Not only are we not to get the tax cuts promised, there is even talk of new taxes on the horizon, including perhaps the Capital Gains Tax that even Michael Cullen resisted.
In the most important budget for a generation then, we are this afternoon to be delivered a Liars’ Budget by incompetent fools.  It is not even just tax-and-spend: it is borrow and tax and spend like all hell, in the mistaken belief that pouring taxpayers’ money down the black hole of government and the multi-billion-dollar mirage of “infrastructure” will somehow inspire a recovery somewhere down the drain – just like it’s never done anywhere ever before.
And my colleague, Libertarianz finance co-spokesman and Auckland economist Mr Darby warns that the billions of dollars of red ink, funded by borrowing, will have implications for the youngest in society: the children who will have to pay this government’s debt.
juliandarby     "An unbalanced budget has to be funded, and if this is funded by additional borrowing, then future generations will bear the burden of paying off the debt. This is 'fiscal child abuse',” says Darby. “A responsible political party and government would, at the very least, balance the budget."
   
However, in its first budget, the National/ACT government appears to be about to fund a series of deficits by borrowing, thereby mortgaging the lives of future generations. "While this demonstrates that they are irresponsible, what is outrageous is that they are about to renege on their promise of tax cuts, a promise which formed a central part of their election campaign,” noted Darby. “To blame the recession for breaking this promise is no excuse, for the effects of the recession were well known to everyone when this promise was made. They are either incompetent, or they wilfully lied in order to get onto the Treasury benches," continued Darby.
   
The Libertarianz support tax reductions in all their forms. In fact, tax cuts are more important than ever so that money is returned to the productive members of society; for it is they who create wealth and jobs. It follows, therefore, that breaking the promise of tax cuts would hinder any recovery of New Zealand's economy.
   
Darby pointed out, however, that tax cuts must be accompanied by equivalent reductions in government spending. "It is essential that government spending is slashed. “Line-by-line” spending reviews are nowhere near enough – many government departments and programmes can easily be eliminated saving significant sums of money and allowing the promised tax cuts to proceed. And yet," highlights Darby, "this government has shown no interest in effecting any meaningful cuts to spending. On the contrary, they are about to embark on a multi-billion dollar programme of spending on infrastructure and home insulation."
   
Finally, Darby issued a warning. "This government is about to engage in fiscal child abuse by mortgaging the lives of future generations. They do this while breaking their central election promise of tax cuts and while creating significant spending programmes which will also hinder any economic recovery. Muldoon is alive and well in Wellington."
Frankly, I doubt even Muldoon was as cynical as this present pair of liars.

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4 Comments:

Blogger Mark Hubbard said...

Yes, I'm getting more and more worried about a CGT. Go to any of the mainstream NZ economics sites and blogs, and they're all clamouring for it.

I made 'one' of my protests here (not very well, but hey, I do have a job to do as well :) )


http://www.interest.co.nz/ratesblog/index.php/2009/05/26/opinion-central-banks-cant-save-the-day-with-debt-so-high-and-interest-rates-so-low/#comments

5/28/2009 09:23:00 am  
Anonymous Sus said...

Surely even the most fervent National party supporters cannot continue to believe (let alone insist) that their party is conservative with:

a) talk of a CGT, and

b) continued massive state expenditure.

And that's just fiscal. It's also the party that ensured the passing of the anti-smacking bill - remember that, chaps?

Given that they were in the front line of (rightly) spitting venom at the last govt, it's logical to expect similar criticism of the current govt socialists. Isn't it?

5/28/2009 02:05:00 pm  
Anonymous LGM said...

Sus

They are referred to as National Socialists for a reason...

BTW, the "home insulation" nonsense is nothing more than corporate welfare for a certain well connected cronies. That outfit has been bailed out by several successive govts. It pretends to operate as a real business but owes its very existence, from the get-go, to massive government interferences in the economy and to substantial govt protection from competitors.

LGM

5/28/2009 03:48:00 pm  
Blogger heisenbug said...

They had to break one of their election promises (tax cuts vs. no spending cuts), and they chose the wrong one. WFF should have been toast, as should interest-free student loans. Then a sweeping reform of welfare should be undertaken, along with a severe slashing of "core" government expenditure (i.e. bureaucrats and other parasitic paper-pushers). There are other things, but they don't spring to mind right at this instant. I can't believe David Farrar said "There’s not much one can argue should be done differently." He's obviously been smoking too much of the same crack as the eunuchs in the Beehive.

I thought with the increasing strength of the union thugs in Australia that the exodus might be reversed, but sadly no. Not after this do-nothing gutless budget.

Richard

5/28/2009 07:48:00 pm  

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