Setting the scene
“National’s rebalancing of the tax system is self-funding and requires no cuts to public services or additional borrowing.”
National Party: Tax Policy 2008
“The public service has slashed 555 jobs in the past year and is expected to lose almost 400 more by June 2014, the government has revealed.”
Fairfax Media: 555 jobs gone from public sector
“Treasury today published the Government’s financial statements for the 10 months ended April 30, which showed the debt mountain had grown to $71.6b.”
Fairfax Media: Government debt rises to $71.6 billion
“In the longer term, our tax package encourages people to invest in their own skills and make best use of their abilities, because they get to keep more of any higher wages they earn. It encourages them to look for and to take up better and higher-paying jobs that make more use of their skills.”
” Thousands of New Zealanders – including many disillusioned immigrants – are looking for new jobs and new lives in Australia…
… And, judging by the long queues for the $15 event, it seems many of the employers will have no problem finding takers among job seekers who say they are fed up with New Zealand and believe the lifestyle, pay and opportunities are far better across the Tasman.”
NZ Herald: Fed-up Kiwis head to Oz en masse
” The unemployment rate rose half a percentage point to 7.3 per cent in the September quarter, the highest level since June 1999, according to Statistics New Zealand’s household labour force survey. “
NZ Herald: Unemployment up to 7.3pc – a 13 year high
On 1 October 2010, as National implemented it’s second round of tax cuts, John Key made this statement,
“Our changes to the tax system are about:
- Helping hardworking families get ahead
- Boosting growth to create jobs and lift incomes
- Encouraging savings and investment
- Making the tax rules fairer for all New Zealanders.
Many of you have told me that you are worried about the increasing cost of living. That’s why the tax changes are so important.
From today, the average family will be about $25 a week better off, even after the increase in GST. The average earner will be about $15 a week better off. A retired couple receiving only NZ Super will be about $11 a week better off.
National was elected to secure a brighter future for New Zealanders and we are delivering on our promises.”
See: National Party: Special Edition – Tax cuts today
It is a common theme amongst the New Right and neo-liberal dogma that cutting taxes equates to more jobs. The idea is that with more money in people’s pockets; they spend more; consumption rises; industry has to produce more; and subsequently hires more staff.
That’s a lot of assumptions to make. As John Key, Bill English, and other National ministers stated, many people used their tax cuts to save and/or pay off debt,
“One of the things we are trying to do is lift the national savings rate. When you lift the consumption taxes and lower personal taxes, you encourage people to save. That’s definitely happening, we’ve got a positive savings rate in New Zealand now.” – John Key, 2 April 2012
“And I think it is going to keep dropping. Kiwis have got the message that debt is a bad thing” – but they had been convinced about the merits of saving more. People do want to save and they know there is no free lunch.” – Bill English, 14 March 2012
And even if people do spend more, there is no guarantee that businesses will hire more staff. Much of our consumer goods now originates from overseas, and what we spend here in NZ probably has little effect with overseas manufacturers.
Even locally, there is certainly no guarantee that an extra $15 or $20 in taxcuts will result in more jobs. Especially when gst, fuel, electricity, and government charges have risen to eat up tax cuts for low and medium paid workers.
” New Zealand finance bosses are feeling good about the economic recovery, but research shows that optimism doesn’t extend to hiring new staff.
Global finance and accounting firm Robert Half’s survey of 200 chief financial officers and finance directors found 79 per cent were confident about the prospects of national growth in 2012.
Those who thought their own company would pick up speed in the year ahead made up an even higher proportion, at 87 per cent.
However, the rise in confidence did not translate to more jobs – just 13 per cent planned to take on new finance and accounting staff. “
So John Key’s hopelessly optimistic vision of “boosting growth to create jobs” has become a distant dream, based on -?
- Naive faith in a discredited “free market” dogma?
- Helping out his rich mates?
- A misguided belief that creating jobs could be easily done at the stroke of a pen?
- Free Market fairies and Employment angels?!
- All of the above?
To make the picture complete, I present for the reader’s interest this graph, correlating the ’09 and ’10 tax cuts, with unemployment levels,
The graph above vividly illustrates the fallacy linking tax cuts to job creation.
Indeed, after two taxcuts, this country has little to show for it except slashed state services; thousands of state sector workers sacked; and having to borrow billions more from overseas to make up for the shortfall in the tax-take.
The closure of two schools for disabled children, Salisbury Residential School in Nelson and McKenzie Residential School in Christchurch, is perhaps the most tragic face of National’s harsh policies. When we cut taxes, we cut essential state services, there is no other option.
National supporters and low-information voters may hold cherished beliefs that cutting taxes are a good thing – until they themselves, or a family member, requires a state service that has been wound back, or eliminated altogether.
Whilst most of us understand that cutting taxes does not lead automatically to the Holy Grail of more jobs, our Dear Leader seemed stunned by the shock rise in unemployment,
“I’m very surprised with the numbers I’ve seen this morning, goodness knows what the next one will look like.”
Oh goodness, Dear Leader. “Surprised”, were we?
How can he have been surprised when unemployment has been rising since January, when it was at 6.4%?!
Was he not paying attention – much like his briefing at GCSB offices when Kim Dotcom’s arrest was discussed?
Mr Key really needs to bring his mind back from the golf courses of Planet Key.
Speaking from Japan (where it’s probably the safest place for him, right about now) John Key dismissed ideas of investing in job creation policies, saying,
“It would be a dangerous precedence for us to start saying we are going to support a particular industry over another where there’s change. If you want to roll that all the way back we’d still be producing cars in New Zealand and that probably wouldn’t be in New Zealand’s best interests.”
Key is happy to throw tax breaks at the highest income earners in this country – but thinks that tax breaks for preserving jobs “wouldn’t be in New Zealand’s best interests“?!?!
And let’s not forget the generous tax breaks he gave to Warner Bros – a multi-billion dollar corporation – as a ‘sweetener’ to keep “The Hobbit” in New Zealand (when there was in reality no risk of production going overseas, according to Peter Jackson).
This man may have been raised in a state house, by a solo-mum, but it appears that he has lost all perspective. His fitness to be Prime Minister has to be seriously questioned.
Only six months earlier, Key was reported in the Dominion Post thusly,
“The number of unemployed people increased 6.1 per cent to 160,000 but the labour force participation rate also rose, by 0.6 points to 68.8 per cent.
Key said the unemployment rate was “a very weird one at the moment”.
About 9000 jobs had been created and the Government was on track to create 170,000 over four years, he said.” – Dominion Post, 7 May 2012
Deluded? Make up your mind after he went on to say the following (Warning: Contains Crazyiness),
“The number of people looking for work or in work is virtually a record in New Zealand, the second highest rate ever. What that shows you is that New Zealanders are more confident the economy is coming right and actually bothering to look for work. I know it sounds crazy.” – John Key, 7 May 2012
Well, yes; crazy.
Only John Key could be so utterly disingenuous as to laud rising unemployment as ” New Zealanders are more confident the economy “.
Batshit crazy, actually.
Fairfax Media: Key defends tax cuts in light of zero Budget
National Party: Special Edition: Tax cuts today
Sh*t to p*ss you off
NZ Herald: Fed-up Kiwis head to Oz en masse
= fs =
For a better New Zealand…
~ Cleaner rivers
~ No deep-sea oil drilling
~ Less on Roads - more on Rail
~ A Living wage at $19.25/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
- The slow dismantling of a Prime Minister – downward slide continues
- Andrew Little’s “dangerous” speech – a cunning plan for the Middle and the Left
- Foot in Mouth award – another former ACT MP plumbs new depths of dumbness
- Letter to the editor – Who are the Real Greedies?
- Hooton and Farrar slag Key – With friends like these…
- Letter to Radio NZ – Homelessness, Poverty, and the Final Solution
- Letter to the editor – Mark Weldon’s fan club offers support
- Panama Papers: Matthew Hooton’s Alternate Universes on Twitter and Radio NZ
- Foot in Mouth award – Former ACT MP exposes flaw in free-market system
- Letter to the editor – Dear Leader loses the plot in Parliament
- Dodgy tax havens and even dodgier Peter Dunne’s memory
- 2016 – Ongoing jobless tally
- Climate Change Minister Paula Bennett revealed
- National – Party 4 Sale?
- That was Then, This is Now #28 – John Key on transparency
- When National is under attack – Deflect, deflect, deflect!
- National MP Mark Mitchell and his breath-taking display of arrogance
- The Mendacities of Mr Key # 16: The sale of Kiwibank eight years in the planning?
- Flag thoughts and settling dust – Dedicated to our esteemed Dear Leader and Audrey Young
- When Fact Follows Fiction – The Weird World of U.S. Politics
- John Key is a principled man – except when a photo op arises (A Photo Essay)
- Coming soon: A terror alert near you!
- Dear Michael Cullen: the GCSB is not International Rescue!
- National’s Food In Schools programme reveals depth of child poverty in New Zealand
- Letter to the editor – So this is ‘job creation’ by foreign ownership?
- Mediawork’s Julie Christie at war with NZ on Air – Possible conflict of interest as first reported last year on TDB
- Letter to the editor: Setting it straight on user-pays in tertiary education
- Letter to the editor – In response to Orwellian National Supporters
- The Mendacities of Mr Key # 16: No one deserves a free tertiary education (except my mates and me)
- Citizens present petition at Governor General’s gate
- May 2016
- April 2016
- March 2016
- February 2016
- January 2016
- December 2015
- November 2015
- October 2015
- September 2015
- August 2015
- July 2015
- June 2015
- May 2015
- April 2015
- March 2015
- February 2015
- January 2015
- December 2014
- November 2014
- October 2014
- September 2014
- August 2014
- July 2014
- June 2014
- May 2014
- April 2014
- March 2014
- February 2014
- January 2014
- December 2013
- November 2013
- October 2013
- September 2013
- August 2013
- July 2013
- June 2013
- May 2013
- April 2013
- March 2013
- February 2013
- January 2013
- December 2012
- November 2012
- October 2012
- September 2012
- August 2012
- July 2012
- June 2012
- May 2012
- April 2012
- March 2012
- February 2012
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- 421,156 hits