Tax cuts & school children
“Finance Minister Bill English is is not ruling out an increase to the ratio of students to teachers, saying all Government departments are tasked with finding ways to save money, and staff costs are one of them.
Mr English says there is clear evidence that class size does not affect the quality of students’ education.” – Source
What did the tax cuts cost us?
The PSA published the following report,
Tax cuts widen the gap between rich and poor
- Government chose to make tax cuts in worst recession in 70 years
- Total tax cuts worth $5.5 billion
- Top 10% income earners got tax cuts worth $2.5 billion
- GST increased to 15% – hurts low and middle income most
- Tax cuts + GST left $1.4 billion hole in budget
Since 2008, National has introduced tax cuts that cost New Zealand around $5.5 billion a year in lost revenue. Most of the benefit has gone to the wealthiest.
National’s first set of tax cuts – the personal tax cuts and ‘Independent earner rebate’ taking effect in April 2009 – cost approximately $1 billion a year.
The second set of cuts – cutting the top income tax rate from 38% to 33%, and the company rate to 28% – will cost $4.5 billion a year, according to figures from the 2010 Budget. That gives a total of $5.5 billion.
National claimed that because it was also increasing GST, the tax changes would be “revenue neutral” – that is, the increase in GST would cancel out the income tax cuts. In fact, the losses from the income tax cut will outweigh the gains from GST by $1.4 billion. In other words, the so-called “tax switch” has blown a $1.4 billion hole in the budget.
The tax cuts have also made New Zealand a less fair place. According to Labour, the wealthiest 10% of New Zealanders will get 43% of the tax savings. And the gap in take-home pay between someone on $30,000 and someone on $150,000 a year grew by $135 a week as a result of the tax cuts.
New Zealand’s income tax rates are among the lowest in the OECD, as the Tax Working Group acknowledged.
In Australia , for example, income over $80,000 is taxed at 37%, and income over $180,000 is taxed at 45%.
Figures from the OECD itself show that, before National’s tax cuts, New Zealand’s “all in” top income tax rate – a measure that includes all taxes on income, including local and regional ones – was 38%. In contrast, the all in top income tax rate in Australia was 47%, and in most countries it was higher still.
Bill English says,
“…all Government departments are tasked with finding ways to save money, and staff costs are one of them.”
No doubt as part of government’s desperate attempt to cover the “$1.4 billion hole in the budget“, courtesy of their ’09 and ’10 tax cuts.
The tax cuts have benefitted the top 10% of our economy, with the top 1% increasing their wealth by a staggering 20%,
Even John Key did rather well out of the tax cuts,
For John Key, to suggest that the latest research showed the income gap in New Zealand was actually narrowing, is breath-takingly disingenuous. The reality of every day life for New Zealanders is different from that of a millionaire who has long since lost touch with Mr and Mrs Everyperson,
It’s abundantly clear: Government is cutting the very social services that we need, to remain a First World nation.
National gave us tax cuts and put a few extra dollars into our pockets – and a whole lot more into the deep pockets of the country’s richest people.
New Zealanders obviously haven’t got their heads around one simple, inarguable fact; we don’t get something for nothing. If we want social services, then we need to pay for them.
Now, the chooks have come home to roost. We are having to pay for those tax cuts – or rather, our children are paying. Children who never voted for this shabby government.
I wonder what the 1,058,638 people who voted for this government are feeling right now? Are you folks feeling warm fuzzies?
Because all I’m feeling is the chill of a society that values tax cuts more than our children and their future.
For a better New Zealand…
~ Cleaner rivers
~ No deep-sea oil drilling
~ Less on Roads - more on Rail
~ A Living wage at $18.40/hr
~ Marriage equality - Yay! Got that one!
~ Strong, effective Unions
~ No secret free-trade deals
~ Breakfast/lunches in our schools
~ Introducing Civics into our school curriculum
~ Cut back on the liquor industry
~ A fairer, progressive tax system
~ Fully funded, free healthcare
~ Ditto for education, including Tertiary
~ Fund Pharmac for Pompe's Disease medication & other 'orphan' drugs
~ No state asset sales!
~ Rebuild public TV broadcasting!
~ Keeping farms in local ownership
~ Reduce poverty, like we reduced the toll for road-fatalities
~ Jobs, Jobs, Jobs!
~ Being nice to each other
- Farewell, Nelson Mandela…
- I’ve voted – have you?
- John on John…
- A letter to the editor…
- Bring in the clowns…
- Radio NZ: Politics with Matthew Hooton and Mike Williams – 2 December 2013
- The ChCh by-election – a letter to the editor…
- Another “satisfied” WINZ client…
- Full access for everyone!
- Geoff Robinson – an era ends.
- Radio NZ: Politics with Matthew Hooton and Mike Williams – 25 November 2013
- Radio NZ: Focus on Politics for 22 November 2013
- 2013 – Ongoing jobless talley
- One Dunedinite’s response to the passing of the GCSB Bill…
- Random Thoughts on Random Things #5…
- Random Thoughts on Random Things #4…
- Random Thoughts on Random Things #3…
- Random Thoughts on Random Things #2…
- Random Thoughts on Random Things #1…
- Another good poll for a LabourGreen government
- Radio NZ: Politics with Matthew Hooton and Mike Williams – 30 September 2013
- Endorsing Celia for Mayor
- How To Guide: Voting in Auckland
- Guest Author: Dunedin election – my guide to who’s left and who’s not
- Endorsing Jeanette for ADHB!
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