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Archive for 2 February 2012

Tax cuts & school children

2 February 2012 13 comments

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Despite recession hitting our economy in 2008, and despite a looming $30 billion deficit, John Key’s government proceeded with tax cuts in April 2009 and October 2010.

To make up for the billions lost in taxation revenue, government borrowed millions every week,  from overseas banks, and began a programme of harsh cost-cutting,

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,

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Tax cuts widen the gap between rich and poor

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  •  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.

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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%,

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Full Story

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Even John Key did rather well out of the tax cuts,

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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,

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Full Story

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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.

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“One law for all” – except MPs. (Part Rua)

2 February 2012 4 comments

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The issue of privacy, politicians,  government departments, and ordinary citizens is something that has played out in the public arena in the last few years…

In 2009,  two women;  solo-mothers;  on the domestic purposes benefit;  criticised the Government for cutting the Training Incentive Allowance (TIA).

This was the same TIA that Paula Bennett herself used to put herself through University,

I have never made a secret of the fact I have been on and off the benefit and that I did receive the TIA.

What I can tell those people who are looking at tertiary study is that it’s not going to be easy but if they back themselves, and this Government is backing them as well, then they can get off the benefit. They may even end up a cabinet minister.” – Source

The two women were on training courses to be a teacher and  nurse.

In retaliation to criticism, Bennett gained  access to their MSD (Ministry of Social Development)  files and released figures regarding the two women’s WINZ payments, to the media.  In doing so, Bennett clearly violated the women’s, privacy,

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Full Story

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Bennett defended her actions by stating that she wanted to  “round up a one-sided story“.  Bennett added that “she had not sought the women’s permission she felt they had taken the matter public by talking to the news media and writing on the internet“. (Source)

So there you go, folks. The rules set by the current regime are simple; if you criticise the government and talk to the media – be prepared to have the State retaliate, using your own personal information against you. (Stalin would be proud!)

Fast forward to December, last year,

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Full Story

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WINZ head,  Janet Grossman said,

These people have let us down badly. Their actions cast a shadow over our honest and hard working staff who understand that client privacy is sacrosanct.”

It is a shame that Paula Bennett’s – and other politicians – understanding of “sacrosanct privacy” appears to differ  markedly  from what you and I might think on the subject.

So  it was hardly surprising that  John Key was scathing in the matter of  a secretly-recorded conversation between himself and John Banks,  at the Urban Cafe in Epsom last year,

I’m not bothered in the slightest about what is on the tape, secondly, I am very bothered by the tactics that I believe have been deliberately deployed by the ‘Herald on Sunday’.” – Source

Politicians, though,  have recourse to  the full force of State power – the police – to guard their privacy. And John Key certainly seemed to have no qualms about engaging the Police on this issue. After all, as Key stated,

The good thing is we’ve lowered the crime rate by seven per cent across the country so they do have a little bit of spare time and this is a really important issue.” – Source

A politician’s privacy is “important” – even if half the media-contingent in Auckland were present at the meeeting between Banks and Key.  Folks can see for themselves just how private their conversation really was,

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The “moral” of this story?

If you’re an employee at WINZ, and access personal files of clients without appropriate reasons – then expect to lose your job.

If you’re the Prime Minister – your conversations are always private. Never mind the dozens of  journalists you’ve invited to the latest pre-arranged photo-op. (If in doubt, the Police can be called to enforce the Prime Minister’s wishes.)

If you’re a recipient of social welfare – then your privacy is at the discretion of government ministers.

Have I missed anything out?

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Previous Blog entries

Hon. Paula Bennett, Minister of Hypocrisy

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