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Thursday, May 28, 2009

National lied about your tax cuts when they made them


It’s not that National will dump their tax cuts, it’s the right thing to do when the entire global economy is in free fall and that we are really only seeing the first shockwave of that recession – make no mistakes a depression of a size our generation has never seen is on it’s way, it’s going to get FAR worse than what we are seeing presently – it’s that National promised tax cuts when they knew full well that they couldn’t deliver on them, as Brian Rudman points out

Yet back on September 30 last year, Mr English was mocking then Finance Minister Michael Cullen for being over-cautious on the issue. He said: "Dr Cullen cannot be trusted to deliver on any future tax promises."
He compared that with National which "will have an ongoing programme of personal tax cuts. It will be a responsible programme and a transparent programme".

He said he would treat Labour's tax cuts, which came into force the next day, "as the first tranche on our tax-cut programme. That will be followed by another tranche of tax reductions on April 1, 2009, and further tranches in 2010 and 2011". He declared: "National has structured its credible economic package to take account of the changing international climate. Our tax cut programme will not require any additional borrowing."

A few days later, Mr Key launched "a tax package for our times" that is "appropriate for the current conditions". He said it would require "no additional borrowing, or cuts to frontline services to fund it. There is, in fact, a small saving to be made, of $282 million".

Somehow, cutting taxes dramatically was going to increase government income. On December 16, Mr English was up in the House confirming "National will not be going back on any of those promises, as we fully costed and funded them".

The Government is now making out some economic thunderbolt has suddenly hit New Zealand and thrown their pre-election calculations out the window.

But even economic ignoramuses like myself knew a global crisis was nigh. The experts had been saying so for long enough.

The International Monetary Fund's October 8, 2008 World Economic Outlook, for example said the world economy is "entering a major downturn" in the face of "the most dangerous shock" to rich-country financial markets since the 1930s. That was about the time Mr Key was unveiling his "responsible" and "appropriate for the current conditions" catalogue of tax-cut bribes.


The writing on the wall was clear when National promised tax cuts, so the fake National Party tax cut promise was either a direct lie or proof of an immense ignorance – neither is palatable.

This Government is still in denial about how hard we will be hit by the recession – think about it, we know what the social cost of 5% unemployment currently is, we are looking to nearly double our unemployment rate within a year, and that’s not even the worst case unemployment scenario. How will those unemployed NZers feel in an employment environment where National and ACT have allowed bosses to fire workers within 90 days?

It’s going to get very ugly in a surprisingly short period of time.

4 Comments:

At 28/5/09 8:48 am, Anonymous sdm said...

"
The wroting on the wall was clear when National promised tax cuts, so the fake National Party tax cut promise was either a direct lie or proof of an immense ignorance – neither is palatable."

If the writing was on the wall are you saying the PREFU was wrong? If it was wrong, was it deliberately wrong?

 
At 28/5/09 8:55 am, Blogger Bomber said...

Hello Scott, welcome back - when I was referring to writing on the wall, I was talking about...

The International Monetary Fund's October 8, 2008 World Economic Outlook, for example said the world economy is "entering a major downturn" in the face of "the most dangerous shock" to rich-country financial markets since the 1930s. That was about the time Mr Key was unveiling his "responsible" and "appropriate for the current conditions" catalogue of tax-cut bribes.

 
At 28/5/09 9:02 am, Anonymous Anonymous said...

'Nearly double our unemployment rate in a year...'

Funny that most economic commentatorsa expect Unemployment to peak at just over 7 percent.

What is 5 times two again? Well it certainly isn't 7./

Back to school for you Bomber.

 
At 28/5/09 11:43 am, Blogger Nandor Tanczos said...

still waiting for someone in Government to start talking about (or even listening to) changing the taxation base. Personally I'd love to see a cut in income tax, accompanied by a fiscally neutral adoption of resource and pollution taxation.

http://rasnandor.blogspot.com/2009/05/tax-changes-we-need.html

Howard Stern is saying we need to use this recession as a springboard to investment in sustainable infrastructure, to boost the economy and begin to deal with our environmental problems. Eco taxes are one way to facilitate this.

 

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