Monday, June 01, 2009

Look what Muriel found hidden in the Budget

Bill English’s first Budget wasn’t just a cynically delivered broken promise on tax cuts, a broken promise erroneously sold as “unavoidable” if the National/Act Government was to assuage the gnomes of the rating agencies, it also contained at least one cynically concealed spending increase – a spending increase that will do more to lower New Zealand’s productivity than anything since the war and which, taken together with all the other promised spending increases, fully wipes out the “revenue gains” to government from the broken promise.

As Muriel Newman points out,

The promised tax cuts – and remember that they were already pre-funded by the cutbacks to KiwiSaver and the dropping of the R&D tax credits – were not massive. Just $98 million was needed to fund the tax cuts next year, $494 million in 2011, and over $800 million thereafter.

Not massive, no, especially not when stacked up next to the billions of dollars of existing spending on so called “entitlements” to moochers, or the billions of dollars of extra spending promised on the various black holes of government mentioned in headlines this  week – but some recompense to long-suffering producers buckling under long years of high taxes, onerous government and (now) the effects of economic downturn.

The billions of dollars already going to moochers is bad enough, but what about all this extra spending?  The headline response by Billy Bob English to hard-pressed taxpayers who voted for tax cuts is curt: “Let them eat Batts.” That’s the three-hundred million dollars of extra spending on Batts to help buy Green support. But look beneath the headlines and there’s something even more odious: an appropriation of $550 million – more than half a billion dollars – set aside to to get National’s Emissions Trading Scam off the ground.

So Bill English isn’t able to keep his promise to tax payers, but he is able to do them over with the most irrational attack on producers since Karl Marx fist visited the British Museum Reading Room.  Says Muriel:

Keeping in mind that the “unaffordable” tax cuts would have cost $98 million next year, how do we feel about the appropriation of $550 million that has been set aside for climate change? Most of this has been ear-marked for buying carbon credits to give to businesses to get the emissions trading scheme off the ground. Those who believed that the Government was genuinely awaiting the outcome of an “independent” Select Committee review will be disappointed to see that the die is already cast. And consumers worried about the added cost of an emissions trading scheme will be especially concerned to find out that the half a billion dollar cost is only the beginning of what will be an enormously unproductive drain on our already fragile economy.

Of all the odious defences raised in support of Bill English’s disgraceful capitulation to the spending fairies this week, perhaps the most irrational is the claim that he needed to break his promise on tax cuts to assuage the gnomes of Moodies and Standard and Poors.

What he needed to do was to keep his promises to taxpayers – to the productive New Zealanders who bankroll every single dollar spent in this economy – and to knock on the head everything that does them over.

Sadly, he’s done the reverse, which shows you in the end who he sees as his real supporters.

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5 Comments:

Anonymous Mr Dennis said...

Thanks for bringing it to my attention. I'm shocked.

6/01/2009 09:09:00 pm  
Blogger KG said...

Thanks PC. I've put up a post on it with a link to here.

6/01/2009 09:15:00 pm  
Anonymous twr said...

What about the billion or so dollars they want to piss away on broadband? They could have cancelled that without anyone noticing, and they could have achieved the intended effect for free simply by getting the hell out of the way of any private providers who wanted to build it.

6/02/2009 12:16:00 am  
Anonymous Marcus said...

Twr, the only problem with your broadband scenario is that no private enterprise in its right mind would want to develop a broadband infrastructure for the whole country - they could spend billions developing it, then they'd be told to share it with other companies who weren't 'lucky enough' to get off their arses and create it themselves.

There might be logistical reasons that I don't know of, but I can't understand why we're focused on a single national network. Regional networks would be small enough that a company could feasibly build a fast broadband network without it involving billions of dollars, they can do this simply as a business venture, or use the network for their own purposes and sell/lease/rent out the space they don't use. Northpower are doing it successfully up here in Whangarei, it can't be impossible for similar things to happen nationwide.

6/02/2009 09:46:00 am  
Anonymous Anonymous said...

Isn't the ACT party voting for supply / supporting the budget?

6/03/2009 07:57:00 am  

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