The Greens's multi-billion dollar fiscal hole

I did know that the Greens are economically illiterate. I hadn't realised just how innumerate until I saw the so-called Taxpayers' Union's Bribe-O-Meter -- prepared for the election so you can see how much each party promises to bribe you with your own money.

As irresponsible as the ACT Party is, their bribes only amount to three-quarters of a billion. More than they should be, but less than they might be.

As profligate as Team National is, they're still just promising bribes amounting to two billion dollars.

And then there's a big jump. Barbara Edmonds is still barely to quote a number of her own this year, but the Taxpayers Union reckon her Labour Party will be bribing you with over fifty billion -- about the same as Winston First.

If you think that was a big jump, then settle back: Chloe Swarbrick's Greens -- the party who reckon she should be the Finance Minister in the next government -- are bribing you with a total of $236.72 billion over the next parliamentary term. Almost a quarter of a trillion dollars! That equates to $114, 245 per household!

You can read the detailed breakdown here. Here's a summary:

• Social spending is costed at $178.7 billion over four years, or $86,234 per household, by far the largest single category. 
• Extending ACC to cover all injuries, disability and illness regardless of origin accounts for $96 billion of that alone
• Lifting benefits to "liveable rates" adds a further $27.6 billion
• On education, a universal student allowance to cover basic needs is costed at $14.4 billion, and free tertiary education up to a first degree at $8 billion
• The party's proposed student loan write-off carries a $16.2 billion balance sheet impact
• Free early childhood education for all is costed at $5.4 billion
• Free school lunches for all kids in all schools at $2.2 billion
• Expanding free apprenticeship programmes at $200 million

That's an awful lot of "free" stuff to be paid by someone else: That's you, the voter.

But we haven't even finished the promised bribes.  Their next biggest bribe is on something they call "economic development" ....

• Economic development spending is costed at $40.8 billion over four years
• The largest confirmed commitment is a nationwide rapid rail network, costed at $17.2 billion
• Comprehensive bus lanes in all cities are costed at $1.2 billion
• EV subsidies at $337 million, based on reintroducing the Clean Car Discount scheme.
• A further $9.4 billion is costed for tens of thousands of new public homes, based on forecast 2026/27 house-building spend and the maximum build rate achieved in 2023/24, 
• This is alongside $21 million for a Certified Rental Warrant of Fitness.
• Regional support commitments add $2.4 billion for the Te Rangatiratanga Trust, $2 billion for a new intergenerational fund, and $400 million for a Te Rākau restoration fund.
• Energy policies add a further $3.05 billion, made up of Kiwipower ($980.6 million), expanding Warmer Homes ($969.8 million), solar on all public housing stock ($460 million), zero-interest solar loans ($428.7 million), community-owned energy ($200 million), and increased EECA funding ($12.4 million).
• The Greens' plans to purchase 120 supermarkets to form a state-run supermarket chain is costed at $4.7 billion, or $2,259 per household. 
• Creating a tribunal for dealing with disputes arising from auctioning off commercial leases on unoccupied lots has been costed at $7.2 million.

I don't know about you, but I don't see a lot of economic development coming therefrom.

Next biggest item is on developing bigger government. This doesn't come cheap.

• The Greens' policy to lift core public service pay by 10 percent is costed at $15.5 billion over four years

Over fifteen billion to employ more bureaucrats.

And finally, on to their bribes in Environment and Arts -- only a comparatively minor item, considering they were once an environmental party ...

• Environment and conservation commitments total $1.5 billion over four years
• This includes $1.2 billion to expand Jobs for Nature, $200 million to introduce a price on agricultural emissions, $90 million to restore the Ministry for the Environment, and $13.5 million to increase funding for the EPA and community environment groups.
• $200 million has also been promised for the promotion of te reo Māori.

=> And that's how we get the figure, for all of the promised bribes, of $236.72 billion over the next parliamentary term (equating to $114, 245 per household).

And just how does this all get paid for?

I'm glad you asked, because it hasn't apparently occurred to the innumerate Auckland Central MP to reconcile bribes with revenue. As of today's date ...

The Greens' tax plan, released in June, promises more than $32 billion of new revenue over four years. It relies on a "super-rich tax" (their renamed wealth tax) and an inheritance and gifts tax. (The current Wealth Tax has already been revised down by fifty percent since last year's "alternative budget." Expect any return, if implemented to continue that trend.)
They would also lifts the corporate tax rate for some firms and reverses the coalition's changes to interest deductibility.

Consistent with their something for nothing promises, that's all the revenue they promise to extract from you. So how would the rest of those bribes be paid? Answer: borrowing.

• The Taxpayers' Union describes a $60 billion infrastructure borrowing programme as part of the Greens' pledges, with interest of about $12 billion.

But even with that aspirational fantasy of a $32 billion Wealth Tax and saddling the few remaining taxpayers with $60 billion of borrowing (and another $12 billion interest bill), that still leaves a massive hole. 

A hole of nearly one-hundred and fifty billion  dollars!

How would that be paid? Somehow. That's how.

UPDATE: Of course Greens supporters will object that there is. no fiscal hole, that governments can spend as much as they like -- that money does grow on trees just as long as it's government that grows them. 

In its latest guise, called MMT by its supporters (aka Magical Monetary Theory) -- the  populist idea (already promoted by the UK Greens) that governments can spend spend spend and do not need to raise tax to finance it. Professor John Hearn explains that it's not just wrong, but dangerously wrong...

The (make believe) PREFU numbers are out: "*this* time it will be different."

The Blue Team is crowing again about a budget surplus. In three years time. They seem to have forgotten their promise three years ago was that we'd be in operating surplus by now.

It's a bit like the old Soviet Five-Year Plans, isn't it. At the Plan's announcement, in those old Soviet days, forecasts were delivered and cast-iron promises made; and then, after five years, the same failures appeared, along with excuses for the failure -- saboteurs/wreckers/bad harvests -- at which point a new Five-Year Plan was announced promising that this time it will be different.

Nicola Willis is in the "this time it will be different" phase.

Because Treasury's crystal-ball waving three years ago forecast that net debt would peak at 22.8% of GDP in 2024/25, then fall. It didn't. It was make-believe, a fantasy: what economist Michael Reddell calls "vapourware."

Because today, net core Crown debt is forecast to peak at 46.1% of GDP in 2027/28. "So the important context is that NZ is now carrying roughly twice as much net debt relative to the size of the economy as the peak Treasury forecast in the 2023 PREFU [i.e., Treasury’s Pre-election Economic and Fiscal Update]."

And Michael Reddell reminds us that 

at the 2023 election National promised that the govt would be in budget surplus (& not on a make-believe measure) and that debt would have been falling by now. (Both Labour and National numbers rested on make-believe assumptions. Likely to be true this time too).

The promises, like the forecasts, are worth nothing. Why? Because Treasury is required to report on the basis that the Ministry of Finance told them that a re-elected govt would suddenly 'get religion'" -- would suddenly become fiscally responsible; would suddenly lose the spending bug.

Yeah right. Like that's ever going to happen.

Willis is still spending more than Grant Robertson’s 2019 pre-COVID "Wellbeing Budget," and she has no plans to unwind the post-COVID government bloat.

There is no likelihood of Willis getting the responsibility religion any time soon. 

But maybe this time it will be different.

The moral argument against a wealth tax

"The moral argument against a wealth tax is simple: Your wealth is not a public resource simply because other people are envious of it. If it was earned voluntarily and without violating anyone's rights, others have no moral claim to it."

~ Rock Chartrand

"The wealth tax is not about economics at all. It’s about envy, destroying billionaires. And it’s about grabbing their power for the government. They want to get rid of billionaires even if it impoverishes the rest of us."

~ John Cochrane from his post 'Wealth Tax 2.0'

No genuine conservative objection to being stolen from twice

I was struck this morning when reading Home Paddock's 'Quotes of the Week'  just how pathetic our local conservatives are. Here's several of them on the doubly-stolen money that is a capital gains tax:

Damien Grant's primary worry is that if too many people leave, the calculations may not work out:

Labour is proposing to raise $1.3b annually with a capital gains tax to pay for free doctor visits. It is assuming patterns of property sales remain unchanged and GPs will be willing to see the influx of new patients at the same rate they currently receive.
    Te Pāti Māori wants a 48% rate of income tax, along with a wealth tax and assume zero economic reaction by high income earners who make money by responding to incentives. The Opportunity Party anticipates no one will leave the country as a result of its land tax and the Greens are praying there isn’t anyone worth more than $10 million who will read their tax policy.
    In each case these policies will cause the economy to constrict. Jobs will be lost. Firms will close. The productive will leave the country and capital will relocate offshore.

Mike Hosking is similar if pithier, worried about "a capital gains tax that, so far, will produce exactly nothing given housing is flat. And even if it wasn’t, it takes years to fire up." It's all about efficiency, you see. His only concern with Hitler's programme would be the size of the gas bill.

Oliver Hartwich, meanwhile, calls his own position on a capital gains taxes "nuanced" (a word that's always a sure sign that some kind of intellectual larceny is about to break out). "I think they could work in theory," he says, contradicting his erstwhile allies. His "main objection," he says, his main objection, is simply "about the way it is calculated, the exemptions involved and the earmarking of the revenue."

Talk about selling the farm at a loss.

The odious Simon Bridges doubles down on the disastrous abandonment of any principle at all beyond what the state might extract if it were to be more efficient. "I don’t in principle oppose a capital gains tax entirely," says a National leader who's never in any case seen a political principle he couldn't do without. A capital gains tax, he suggests anyway, is something "we arguably need."

And Liam Hehir, in pointing out differences between the Red Team and his Blueish Team seems to have forgotten that his beloved National Party has already given the game away by introducing its own capital gains tax (dubbed the brightline test) after which the only argument now is about spread and duration. And efficiency.

Is it any wonder Ayn Rand called these conservative-leaning excuses for intellectuals "intellectually bankrupt." Futile, impotent and, culturally, dead was the way she described them. Accurately.

 They have nothing to offer and can achieve nothing [she said]. They can only help to destroy intellectual standards, to disintegrate thought, to discredit capitalism, and to accelerate this country's uncontested collapse into despair and dictatorship.

Ironically, it's Nicola Willis who's left to remind us that it's real people being cleaned out here. Under Labour’s proposal, she reminds us, "a small business owner who owns the property they operate from would face a Capital Gains Tax when they sell up."

That might include a dairy owner who owns a small shop in Hamilton. ... It could also include a couple who own a small motel in Timaru.

But where is the principled argument against this double-theft? The argument that producers must rightly be free to keep the results of their own labour? That the iniquity is not about this tax or that levy, but about the iniquitous imposition of tax at all.

The moral is the practical. "Every dollar collected through a capital gains tax is a dollar stolen twice; once from your labour, again from your thrift." All other things come from that.

The conservative looks only at those "other things."

Or just gives away the game altogether.

“After months of keeping voters waiting, Te Pāti Māori has finally shown its hand. Unfortunately, it is reaching straight for taxpayers’ wallets.”

“Te Pāti Māori has spent most of the year seemingly allergic to policy, and after all that time this is what they have come up with: five new taxes.

“Apparently one or two new taxes were not ambitious enough. Te Pāti Māori wants to tax income, wealth, businesses and investment harder, then use the proceeds to fund an even bigger state.

“After months of keeping voters waiting, Te Pāti Māori has finally shown its hand. Unfortunately, it is reaching straight for taxpayers’ wallets.”

~ Tory Relf from her press release 'After A Year Without Policy, Te Pāti Māori Delivers A Tax Grab'

More on those envy taxes

"Those who claim our tax system is unfair and fosters inequality typically quote Scandinavian countries as operating superior tax systems. The interesting thing is the top 10% of taxpayers in New Zealand pay a bigger share of the tax burden than their equivalents in the Nordic countries, at over 45%. Our northern counterparts have their top 10% shouldering less than 40% - even as low as 35% - of all income taxes paid.

"The same shrill calls for a heavier tax burden on the wealthy rarely want to look at the “net” position of taxpayers. We know that the top 10% of taxpayers are contributing as much as 75% of the tax burden after transfers for Government outgoings are netted off.

"Of that 10%, the top couple of percent are [already] carrying an enormous load. ...

"The level is already in the danger zone when relocation is factored in. It is very easy for the wealthy to move out, taking their innovative, entrepreneurial, employment-creating skills, leaving the rest of us to pick up more of the tab.

"Here's something for promoters of a capital gains tax to consider. The CGT tax collected in Australia in the last couple of years has fluctuated wildly, with as much as 70% swings. Meanwhile the cost of raising a dollar of CGT in the poor years has exceeded 75% or $0.75 cents for every $1.00 raised. Avoidance levels are running over 30% against a pure model, with significant distortions emerging having a negative effect on investment decisions.

"Taxing capital may make the envious feel better, but it doesn't do much for the country."

~ Owen Jenning from his post 'Tax is a means to an end, not an end in itself'

Who actually carries NZ’s tax burden?

 

"[W]ho actually carries their share of New Zealand’s tax burden. [Let's see] how unfair and disproportionate New Zealand’s tax system is on higher earners.

"The top 20 percent [of income earners] pay nearly two-thirds of all personal income tax.
The top 10 percent pay more than the bottom 80 percent combined.
And the top 1 percent contribute more [tax] than the entire bottom half of [income earners].

"Taxpayers’ Union spokesperson Tory Relf said: 'Politicians like Chlöe Swarbrick push a myth that successful New Zealanders are not paying their fair share [sic]. The evidence tells the opposite story. The truth is that wealth taxes, capital gains taxes, inheritance taxes, and higher income tax rates are harder to justify if politicians were truthful about how the tax system works right now.' ”

~ Taxpayers' 'Union' [sic] from their post 'Tax Inequality: Who Really Pays Their Fair Share?'

"With this information in hand, you might ask the next person who says the rich do not pay their fair share of taxes: Exactly what percentage of total federal income taxes should the 1-percenters pay? I seriously doubt whether you will get any kind of coherent answer. 

    "By the way, since 1-percenter income [in NZ starts at around $225,000], it might be pointed out that [$225,000 or even $450,000] a year is not even yacht or Learjet money. Plus, if one has two [children at university], a big mortgage and car payments, I doubt he would declare himself rich."

~ Walter Williams from his column 'What Is The Fair Share Of Taxes?'

“Since this is an era when many people are concerned about 'fairness' and 'social justice,' what is your 'fair share' of what someone else has worked for?”

~ Thomas Sowell

"Giving money and power to government is like giving whiskey and car keys to teenage boys."

~ PJ O'Rourke

"The wealth of nations is the work of the people, not of their governments."

"The wealth of nations is the work of the people, not of their governments. If they had no other maker of their wealth than their governments, all nations would be in misery. 

"Government represents an expense, a consumption of national wealth" 

~ Juan Bautista Alberdi in his seminal 1854 book, Sistema económico y rentístico de la Confederación Argentina según su Constitución de 1853 ('Economic and Revenue System of the Argentine Confederation According to its Constitution of 1853'), drafted while living in exile in Valparaíso, Chile [hat tip Libertario]

Taxing land taxes people

"[The Land Tax] suffers from a much more fundamental flaw. Namely: A tax on the unimproved value of land distorts the incentive to search for new land and better uses of existing land. …
    “Take a real estate developer. One of his main functions is to find valuable new ways to use existing land. ‘This would be a great place for a new housing development.’ ‘This would be a perfect location for a Chinese restaurant. And so on… ‘Information about the land can be considered an improvement in its own right. Some of the land's qualities have very low search costs to discover: is it arable, will it support any type of building, is it in the middle of a city or rural area, etc. Discovery of other potential uses may require significant search and/or investment in other technologies. An entrepreneur brings these qualities to market - they do not bring themselves. Until he does so, the value of the land is undefined.’”

~ Bryan Caplan from his post 'A Search-Theoretic Critique of [Land Tax' 

“[Land] taxers claim that the tax could not possibly have any ill effects; that it could not hamper production because the site is already God-given, and man does not have to produce it; that, therefore, taxing the earnings from a site could not restrict production, as do all other taxes. This claim rests on a fundamental assumption — the hard core of [land]-tax doctrine: Since the site-owner performs no productive service he is, therefore, a parasite and an exploiter, and so taxing 100 percent of his income could not hamper production.
    “But this assumption is totally false. The owner of land does perform a very valuable productive service, a service completely separate from that of the man who builds on, and improves, the land. The site owner brings sites into use and allocates them to the most productive user. He can only earn the highest ground rents from his land by allocating the site to those users and uses that will satisfy the consumers in the best possible way. We have seen already that the site owner must decide whether or not to work a plot of land or keep it idle. He must also decide which use the land will best satisfy. In doing so, he also ensures that each use is situated on its most productive location. A single tax would utterly destroy the market's important job of supplying efficient locations for all man's productive activities, and the efficient use of available land.”

~  Murray Rothbard from his post 'The [Land] Tax: Economic and Moral Implications' 

"[Land] values are created, not intrinsic. Why else would land in Tokyo be worth so much more than land in Mississippi? A tax on the value of a site is really a tax on productive potential, which is a result of improvements to land in the area. [A] proposed tax on one piece of land is, in effect, based on the improvements made to the neighbouring land.
    "And what if you are your 'neighbour'? What if you buy a large expanse of land and raise the value of one portion of it by improving the surrounding land. Then you are taxed based on your improvements. This is not far-fetched. It is precisely what the Disney Corporation did in Florida. Disney bought up large amounts of land around the area where it planned to build Disney World, and then made this surrounding land more valuable by building Disney World. Had [the] single tax on land been in existence, Disney might never have made the investment. So, contrary to [the land-taxer]'s reasoning, even a tax on unimproved land reduces incentives. 

~ Charles Hooper, from his bio of Henry George in The Concise Encyclopedia of Economics 

"[Economic historian Marc] Blaug reviews five major contemporary objections to [a land tax set to acquire major revenue]:

1. The Anti-Landlord Thesis: Since [profits] are ubiquitous in a capitalist economy, why single out land and landowners?
2. The Inseparability Thesis: It is impossible to [accurately] separate the value of land from the value of improvements to it.
3. The Adverse Incidence Thesis: Land taxes would simply be shifted forward in terms of higher prices and higher rents.
4. The Inelasticity Thesis: An exclusive tax on land would be unresponsive to the changing requirements of public revenue.
5. The Moral Hazard Thesis: A land tax would nullify the individual ownership of land and have negative incentive effects."

~ Mary Cleveland summarising Blaug's case in 'Henry George: Rebel With a Cause'

"'What gives value to land?' asks [the land-taxer]. And she answers: 'The presence of population—the community. Then rent, or the value of land, morally belongs to the community.' What gives value to [the land-taxer]’s preaching? The presence of population—the community. Then [the land-taxer]’s salary, or the value of her preaching, morally belongs to the community."

~ Benjamin Tucker in 'Liberty' magazine, August 18, 1888.

"Spare a thought for Queensland property owners, who were hit with a retrospective land tax ... along with a redefinition of 'unimproved' to include 'the hard work of property owners, including (among other things) the buildings they have erected, the leases they have in place, business goodwill and infrastructure charges.' Would you rule out any of that happening here?"

~ from the post `Retrospective land tax to hit Queensland property investors at PROPERTY TALK

"[C]onfiscation [by by government by means of a land tax] on the whole rent [on unimproved land]  means the same as the nationalisation of land. [Because] once the government has this whole field of taxation open to it, will it not stealthily nationalise all land by charging land taxes higher than the rent and high enough to make the private possession of land uneconomical?"

~ Pierre Lemieux from his post 'Land Taxes: The Return of Henry George'

"I am most emphatically opposed [to the theory of a tax on land]. A theory which advocates state ownership of land is pure collectivism, and it doesn't matter whether its advocates consider themselves individualists or not. Without private property in land there can be no private property right at all, and without property rights no other kind of rights are possible."

~ Ayn Rand in her letter to David Goodman, May 24 1946, collected in The Letters of Ayn Rand 

#WealthTax: "Turning capital into consumption must destroy the capital that produces consumption."

"[There's a] difference between wealth and consumption. The poor wish consumption. Turning capital into consumption must destroy the capital that produces consumption. Taxing wealth in the name of inequality will make the world, including the poor, much poorer. ...

"[T]he vision of high lifestyle amid destitution imagines great inequality of consumption. The current outrage, and demand for confiscatory taxation, is over inequality of wealth. (And that, largely mark-to-market wealth driven by high prices.) There is a big difference.

"The hard fact: Our billionaires, and now trillionaire, own wealth that is almost exclusively stock in companies they created. That wealth is almost entirely left reinvested in those companies. And the companies produce great products, innovate, and employ thousands. ...

"Musk’s trillion is not the ready inventory of a huge grocery store that can be handed out to feed people. And if it were, once the store was empty, the poor would be hungrier again, and there would be no store to buy from. ...

"The world’s rich consume very little of their wealth. The worlds’ poor consume a lot of whatever they have. Being poor is not fun. If we split up Musk’s $1 trillion and gave about $100 in Tesla stock to each of the world’s nearly 10 billion people, it’s a good bet they would not be content to consume only 1/10 of a cent extra per year.

"There are plenty of other reasons wealth taxation will not help. Even the billionaire’s wealth, even if it could be transferred and consumed without destroying the seed corn of our economy, is trivial. ...

"The biggest reason it will not work is the simple one: incentives. If you tax wealth, you tax the activities that create wealth. ...

"I too would love to raise the prosperity of the world’s poor. The goal is not the issue. The issue is whether the wealth tax will help or hurt.

"What helps? This graph from Max Roser at Ourworldindata makes the point beautifully..."

The x axis is GDP per capita, not time. 

The y axis is the share living in extreme poverty. 

What helps the poor? Growth. Capitalism and growth. 

Degrowth and wealth taxation will push us right back up that slope.

~ John Cochrane from his post 'Wealth tax equilibrium accounting'

“But let me offer you my definition of social justice: I keep what I earn and you keep what you earn. Do you disagree? Well then tell me how much of what I earn belongs to you - and why?”

~ Walter Williams, from his book All It Takes Is Guts: A Minority View

Here's one price control I can agree with.

Price controls never control prices in the way the controllers wish.  Instead, they 'control' quantities demanded, either increasing demand (with a price cap) or diminishing it (with a floor), but in neither case can markets clear. Short-term net result is market chaos; longer-term result is withered markets.

This is generally a bad thing.

But there might be one exception. And the European Union may have just found it:

Any price cap increases demand while reducing producers' ability to meet the supply demanded. Short-term result is undersupplied markets, black markets, and reduced quality. 

But what about when it's only a notional market anyway?

Notes David Turver:

"Capping carbon prices is a small step in the right direction, but scrapping the ETS altogether would be better because paying carbon taxes to the Government won't change the weather."

The true tax

 

"Keep your eye on one thing and one thing only: how much government is spending, because that’s the true tax.

    “If you’re not paying for it in the form of explicit taxes, you’re paying for it indirectly in the form of inflation or borrowing. The thing you should keep you eye on is government spending ...”

~ Milton Friedman on Money and Inflation, Q + A [13:44]

"Responsible"? They lie to you and assume you're too stupid to notice. [UPDATED]

UPDATE: Professor Robert MacCulloch: "It's a rigged budget ... so she can get a soundbite. ... Media got suckered." The promised return to surplus is a “phony” and “reverse-engineered” political exercise designed for election headlines rather than economic reality.

It's one of those rare occasions, this budget, when commentators have mostly taken the finance minister's own spin as a given and burrowed instead into the details. The result however is to ignore context, and to focus on the irrelevant to the exclusion of the important. That's why the finance minister is looking so goshdarned pleased: because her lies are going mostly unchallenged.

The finance minister tells you that this election-year budget contains "no sugar hits." That New Zealanders won't be bribed on election year with their own money.

That's a lie.

The small matter of a $450 million "emergency contingency fund" has been set aside "in a time-limited contingency" if the cork remains in the Straits of Hormuz -- betting, of course, as she does in her heroic forecasts, that the cork will at least be loosened, allowing a wee flutter when polls show it's needed. 

Yes folks, the true "emergency" being provisioned for is an election debacle. That's what the slush fund is for.

The finance minister also tells us repeatedly that she's being responsible.

That's why she's set aside "just over $1 billion" for unspecified "improvements" to KiwiRail. Which is of course a big win for Shane Jones and his friend Winston. This is their billion-dollar slush fund for the election, which is just over double the fund she's allowed for her own party.

Responsible?

It's also handing councils $400 million in “growth incentives” now while only walking slowly to bring council's rates under control. And this is only because the finance minister can't bring her own govt's costs sufficiently under control to allow the GST component of new housing to go to councils (the real growth incentive she was encouraged to enact).

Responsible?

As Michael Reddell observes (one of the few commentators to put his head under the bonnet with the proper focus, New Zealand remains among the advanced countries with the largest structural fiscal deficit -- which have got "materially worse" under this Government.

 

As the Taxpayers Union notes, "Despite branding this a 'responsible Budget,' Nicola Willis has today confirmed the Government will have borrowed more by 2029/30 than Treasury forecast just five months ago." Over a billion dollars more.

So have things got any better under this National finance minister rather than the last Labour liar? Has it hell.  Reddell again:

In the last full year Labour was responsible for core Crown operating expenses were 31.7% of GDP 

In 24/25 32.6% 

In 25/26 32.6% 

In 26/27 32.6%

Responsible, hell!

And of course, this Government went to the country promising "no new taxes." That's another long-term lie. 

The budget has announced three new taxes on banks and shareholders -- sorry, two "levies" and one "charge" -- that will of course immediately be passed on to customers -- "the Beehive can try to frame it as a levy on the big banks, but this new tax will be paid by savers and mortgage holders. It’s a sleight of hand."

So that's just yet more charges and "levies" to add to the other new taxes already whacking New Zealanders since the last election's promise of "no new taxes (Levy (n.) an officially imposed fee, tax, or penalty demanded by a government or organisation). The full list:

Road User Charges on Electric Vehicles (April 2024)
GST on Digital Platforms -- the "App" Tax (April 2024)
Trustee Tax Rate Increase to 39% (April 2024)

Offshore Online Casino Gambling Duty (July 2024) 

Increased ACC Levies on Electric Vehicles (2025)

Customs and Excise Goods Management Levies (April 2026)

Prudential Regulation Levy on Banks and Insurers (announced Budget 2026)

Company Shareholder Loan Integrity Rules (Budget 2026)

Thin-Capitalisation Changes for Foreign-Owned Banks (Budget 2026)

And finally, the promise of "returning to surplus" by 2029?

To use Michael Reddell's term, that's just vapourware:

Not only has the projected date for getting back to budget surplus (on the standard OBEGAL measure) kept being pushed back but the projected surpluses for 26/27 (the yearr today's Budget directly relates to) have worsened by more than 4% of GDP in 3 years (under both governments).

Responsible? They lie to you and assume you're too stupid to notice.

Yes, it's Budget Day ...

 ... so to help journalists desperate for something to write about before the Budget comes down, here are some quotable quotes. Send a copy to your favourite columnist:

"The average ... family head will be forced to do twenty years’ labour to pay taxes in his or her lifetime."
    ~ James Bovard

"The average family pays more in taxes than it spends on food, clothing, and shelter combined."

    ~ Congressman Dick Armey

"If politicians were serious about day care for children, instead of just sloganising about it, nothing they could do would improve the quality of child care more than by lifting the heavy burden of taxation that forces so many families to have both parents working."

    ~ Thomas Sowell

"I think coercive taxation is theft, and government has a moral duty to keep it to a minimum."
    ~ William Weld

"A government debt is a government claim against personal income and private property – an unpaid tax bill."
    ~ Hans F. Sennholz

"Christmas is a time when kids tell Santa what they want and adults pay for it. Deficits are when adults tell the government what they want and their kids pay for it."
    ~ Richard Lamm

"Everyone wants to live at the expense of the State. They forget that the State lives at the expense of everyone."

    ~ Frédéric Bastiat

"Apparently, politicians can change the planetary climate, but they can’t fix the potholes, repair the drains, or balance their books."

    ~ Alice Smith

"The secret to balancing the budget is to remember that all tax revenue is the result of holding a gun to somebody's head. Not paying taxes is against the law. If you don't pay your taxes you'll be fined. If you don't pay the fine you'll be jailed. If you try to escape from jail, you'll be shot. Thus, I - in my role as citizen and voter - am going to shoot you - in your role as taxpayer and ripe suck - if you don't pay your share of the national tab. Therefore, every time the government spends money on anything, you have to ask myself, ‘Would I kill my kindly, gray-haired mother for this?’"

    ~ PJ O'Rourke

"The state is never accused of greed. There is no limit to what it may take from us. And those who live on what is taken in taxes are never accused of greed either. Greed is virtually identified with the "profit motive." We have no invidious term for the parasitic motive. The state and its clients are all but immune from moral criticism."
    ~ Joseph Sobran

"[There are dangers in] the disposition to hunt down rich men as if they were noxious beasts."     
    ~ Winston Churchill

"To tax the larger incomes at a higher percentage than the smaller, is to lay a tax on industry and economy; to impose a penalty on people for having worked harder and saved more than their neighbours."

    ~ John Stuart Mill

"When Barbary Pirates demand a fee for allowing you to do business, it's called 'tribute money.' When the Mafia demands a fee for allowing you to do business, it's called 'the protection racket.' When the state demands a fee for allowing you to do business, it's called "tax." 
    ~ Jeff Daiell

"There are people who think that plunder loses all its immorality as soon as it becomes legal. Personally, I cannot imagine a more alarming situation."
    ~ Frédéric Bastiat

"Taxation is far greater an evil than theft. It is a form of slavery. If you cannot choose the disposition of your property, you are a slave. If you must ask permission to work, and/or pay involuntary tribute to anyone from your wages, you are a slave. If you are not allowed to dispose of your life (another way of defining money, since it represents portions of your time and effort, which is what your life is composed of) in the time, manner and amount of your choosing, you are a slave."

    ~ Rick Tompkins

"Taxation of earnings from labor is on a par with forced labor. Seizing the results of someone’s labor is equivalent to seizing hours from him and directing him to carry on various activities."

    ~ Robert Nozick

"The man who produces while others dispose of his product is a slave."
~ Ayn Rand

“Taxation is the price we pay for failing to build a civilised society, since taxation represents force.”
    ~ Mark Skousen

"The bureaucrat’s first objective, of course, is preservation of his job – provided by the big-government system, at the taxpayers expense. … Whether real world problems get solved or not is of secondary importance. It doesn’t take much cynicism, in fact, to see that the bureaucrats have a vested interest in not having problems solved. If the problems did not exist (or had been invented), there would be no reason for the bureaucrat to have a job.”

~ William Simon, former U.S Treasury Secretary

"… thou shall not steal, even by majority vote …"

    ~ Gary North

"In levying taxes and in shearing sheep, it is well to stop when you get down to the skin."

    ~ Austin O’Malley

"Public works are not accomplished by the miraculous power of a magic wand. They are paid for by funds taken away from the citizens."

    ~ Ludwig von Mises

"A [tax loophole is] something that benefits the other guy. If it benefits you, it is tax reform."

    ~ Russell B. Long

[S]tatism is but socialised dishonesty; it is feathering the nests of some with feathers coercively plucked from others – on the grand scale. There is no moral difference between the act of a pickpocket and the progressive income tax or any other social program."

    ~ Leonard Read

“We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle”
    ~ Winston Churchill

"Taxation without representation is tyranny."
    ~ James Otis

"Taxation WITH representation ain't so hot either."
    ~ Gerald Barzan

"If taxation without consent is not robbery, then any band of robbers have only to declare themselves a government, and all their robberies are legalised."

~ Lysander Spooner

"When a new source of taxation is found it never means, in practice, that the old source is abandoned. It merely means that the politicians have two ways of milking the taxpayer where they had one before."
    ~ HL Mencken

"The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin."
    ~Mark Twain

"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it."
    ~ Ronald Reagan

"According to the Tax Foundation, taxes now consume more than 38% of the average family’s budget. That is more than is spent on food, clothing, housing, and transportation combined. Compare this to the plight of medieval serfs. They only had to give the lord of the manor one-third of their output — and they were considered slaves. So what does that make us?"

    ~ Daniel Mitchell

"Death and taxes are inevitable; at least death doesn't get worse every year."
    ~ Will Rogers

"When more of the people's sustenance is exacted through the form of taxation than is necessary to meet the just obligations of government and expenses of its economical administration, such exaction becomes ruthless extortion and a violation of the fundamental principles of free government."
    ~ former US President Grover Cleveland

"Rulers do not reduce taxes to be kind. Expediency and greed create high taxation, and normally it takes an impending catastrophe to bring it down." -
    ~ Charles Adams

"We have a system that increasingly taxes work and subsidises non-work."

    ~ Milton Friedman

"When you subsidise poverty and failure, you get more of both."

    ~ James Dale Davidson, US National Taxpayers Union

"The mounting burden of taxation not only undermines individual incentives to increased work and earnings, but in a score of ways discourages capital accumulation and distorts, unbalances, and shrinks production. Total real wealth and income is made smaller than it would otherwise be. On net balance there is more poverty rather than less."
    ~ Henry Hazlitt

"The poor of the world cannot be made rich by redistribution of wealth. Poverty can't be eliminated by punishing people who've escaped poverty, taking their money and giving it as a reward to people who have failed to escape."
    ~ PJ O'Rourke

"A government with the policy to rob Peter to pay Paul can be assured of the support of Paul."
    ~ George Bernard Shaw

"There cannot be a good tax nor a just one; every tax rests its case on compulsion."

~ Frank Chodorov

"Freedom is the quality of being free from the control of regulators and tax collectors. If I want to be free their control, I must not impose controls on others."
    ~ Hans F. Sennholz

"There's only one way to kill capitalism--by taxes, taxes, and more taxes." -
    ~ Karl Marx

"The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation."
    ~ Vladimir Lenin

"Giving money and power to government is like giving whiskey and car keys to teenage boys."
    ~ PJ O'Rourke

"A society of sheep must in time beget a government of wolves."
    ~ Bertrand de Jouvenel

"The power to tax involves the power to destroy."
    ~ former US Supreme Court Justice John Marshall

"Taxes are not levied for the benefit of the taxed."
    ~ Robert Heinlein

"Taxes are the sinews of the state."
    ~ Cicero

"Government is the great fiction, through which everybody endeavors to live at the expense of everybody else."

    ~ Frederic Bastiat

"Be wary of strong drink. It can make you shoot at tax collectors, and miss."
    ~ Robert Heinlein

"Every dollar collected through a capital gains tax is a dollar stolen twice"

"Capital gains tax represents one of the most egregious examples of double taxation in the federal code, yet politicians treat it as if they're taxing 'unearned' income for the first time. 

"You earn $100,000, pay income tax on it, and save $70,000 after the government takes their cut. You invest that already-taxed money in shares, real estate, or bonds. Ten years later, you sell for $140,000. The government swoops in again, demanding capital gains tax on your $70,000 profit. They're taxing the same economic activity twice: your initial productive work that generated the savings, then the delayed consumption that made investment possible. 

"Capital gains represent nothing more than the time value of money plus compensation for risk. When you save instead of consume immediately, you defer gratification to provide capital for productive investment. That $70,000 you invested didn't sit idle; it funded business expansion, job creation, and economic growth. The return you earned reflects both the productive use of that capital and inflation's erosion of purchasing power over time. 

"The double taxation becomes even more perverse when you consider inflation. If your $70,000 investment becomes $140,000 over ten years, but inflation averaged 3% annually, your real purchasing power increased by roughly $18,000, not $70,000. Yet the IRD taxes the entire nominal gain, including the portion that merely kept pace with their own monetary debasement. 

"Every dollar collected through a capital gains tax is a dollar stolen twice; once from your labour, again from your thrift."

~ Handre [translated from American]

"Taxes ... "

"Taxes are the price you pay to fund the things that you protest against."

~ Spike Cohen

How regulation works

Above a certain size, building new homes in France requires a registered architect.

Take a wild guess: what size do you reckon that is ...

In the same vein, at what number of employees do you reckon French firms are obliged to unionise ...

...and at what level of income do you reckon UK firms are legally obliged to register for VAT...

...and what happened in Georgian Britain when they taxed windows ...

Here are The Beatles ...

"The Greens are proposing one of the most aggressive tax regimes of its kind anywhere in the developed world..."

 

"The Greens are proposing one of the most aggressive tax regimes of its kind anywhere in the developed world, resulting in a broad-based raid on Kiwis who’ve worked hard, saved, and built something over a lifetime. 

"The idea this only hits the wealthy simply doesn't stack up. One in five Kiwi homes is held in a trust, and the Greens would tax those assets from the first dollar. In Auckland, that means an annual bill of over $18,000 on a mortgage-free family home, or $3,600 for first home buyers with a twenty-percent deposit.

"And it doesn't stop there. A 33 percent death tax would force many families to sell farms, homes, or businesses just to pay the bill. Inheriting the average dairy farm would trigger a $1.2 million tax bill. There is nothing fair about taxing grief, or taxing the same income again when it's earned, saved, and finally passed on.

"Most countries that have tried wealth taxes have scrapped them because they drive investment and talent offshore. Death taxes are even worse, New Zealand tried one and abandoned it in 1993 because it crushed farming families and raised almost nothing.

“This package is light on evidence, heavy on populism, and green with envy.”

~ Austin Ellingham-Banks on the Taxpayer Union's 'NEW REPORT: Green With Envy: Wealth, Death, And Trust Taxes Examined'

"One 'solution' to inequality ... is the wealth tax. ... This taxing away of capital means less means of production and thus less production and higher prices. At the same time, it means less demand for labour and thus lower wages. [The] programme is a call for mass impoverishment....

"Taxing wealth is not merely a levy on individuals but a direct seizure of the capital required for production, which ultimately harms everyone's standard of living. ...

"As [Ludwig Von] Mises observed* ...., almost all of the technological advances of the last centuries are available to and can be fully understood by engineers in even the most impoverished corners of the world. What stops the implementation of those advances is not any lack of technological knowledge but a lack of capital. Thus, a farmer in India who has seen a tractor on television can easily understand the value of using one. What stops him from using one is certainly not any lack of technological knowledge. It is certainly not that he does not know how to operate a tractor or could not easily be taught how to do so. What stops him is that he cannot afford a tractor. He does not possess the capital necessary to buy a tractor and cannot find a lender to provide it. This is a lack of capital that probably could not be made good by any rise in the local capital/income ratio. It reflects generations of insufficient local capital accumulation."

~ George Reisman from his comment on 'The Problem with the Wealth Tax' and his 'Piketty’s Capital: Wrong Theory/Destructive Program' [emphases mine]

"New Zealand’s productivity challenges are strongly linked to low capital intensity. ... New Zealand’s slowing labour productivity growth is likely to reflect both slowing growth in innovation and declines in the capital to labour ratio. ... New Zealand’s capital intensity [already] lags other countries...."

~ Treasury from their 2024 report 'Causes of New Zealand’s low capital intensity'

* Ludwig Von Mises, in his chapter 'Capital Supply & American Prosperity'--in which he observes that "the average standard of living is in [America] is higher than in any other country of the world, not because the American statesmen and politicians are superior to the foreign statesmen and politicians, but because the per-head quota of capital invested is in America higher than in other countries."

1 in 4 people born in New Zealand live elsewhere by age 30

Some fascinating research by Tim Hughes and his team at Treasury reveals that "25-30% of people born in New Zealand are living elsewhere by age 30."

We find that only about a third of emigration each year is of the NZ-born, and about 40% of NZ-born emigrants return to live in NZ again. Those with the highest qualifications are most likely to leave but also the most likely to return. Those who return earn more and pay more tax than those never to leave.
    Yet much emigration is permanent and the diaspora is still substantial, with 25-30% of each birth cohort living elsewhere by age 30. Approximately $4b of public investment in human capital [sic] each year is ultimately lost to emigration, needing to be replaced with migration from other countries.

Complementary research further reveals that this "human capital [sic] is replaced via migration of people born elsewhere. 

Foreign-born residents contribute a disproportionate share of personal tax revenue, reflecting their age structure and other factors.
    In 2024, foreign-born NZ residents made up 32% of the population, and paid 38% of the personal tax.
    This analysis helps demonstrate the growing importance of migration policy settings for fiscal sustainability.

[hat tip Eric Crampton]

"I want to help the poor"

Cartoonist unknown