New Zealand has a post-pandemic hangover and needs to take its economic medicine in Budget 2024, according to Finance Minister Nicola Willis at least.
Speaking to the Employers and Manufacturers Association last week, she said the “post Covid-19 party” had become a distant memory, replaced by a “difficult economic downturn”.
“Now that the laws of economic gravity have reasserted themselves, New Zealanders are faced with the cost of cleaning up. This is the hangover after the wild party. And, as everyone knows, the wilder the party, the longer and messier the hangover,” she said.
While it is not fair to say the Labour Government spent the past three years partying, it did drink too much from a punchbowl of unsustainable economic growth.
The enormous, and largely necessary, fiscal response to the pandemic was mixed in with some nice-to-have policies and a permanent expansion in public sector employees.
When the economic tide went back out—thanks in part to the Reserve Bank—the Government discovered it had become too big to float in shallower water.
Grant Robertson began the process of jettisoning surplus cargo but was turfed out of office in the election and Willis won herself the job of reducing Crown spending.
Take an aspirin
The new Finance Minister said on Monday she had found 240 individual savings to be included in the Budget, either by reducing funding or stopping the activity altogether.
“We have uncovered a layer cake of government initiatives, many of which we had never heard of before, which were absorbing tens of millions, if not hundreds of millions of dollars”.
She also said asking public sector departments to cut their budgets by up to 7.5% had resulted in 2250 employees being laid off and 1150 vacancies not being filled.
Willis also said an additional 500 employees were losing their jobs due other savings initiatives. That puts the total count at just under 4000 jobs cut, largely in Wellington.
The Public Service Association, the country’s largest trade union, has described this approach as being “heartless and chaotic” and warned it will lower the quality of public services.
But the Taxpayers’ Union, a small government pressure group, says these cuts are only a fraction of the 18,000 jobs added between 2017 and 2023. They want much deeper cuts to clear the path for income tax brackets to be adjusted for all inflation that has occurred since 2011, a policy which would cost almost $5 billion a year.
Willis and the National Party campaigned on a much smaller promise. They would move the brackets by about 11.5%, or about $2 billion, which only compensates for inflation since 2022.
The Coalition Government has promised to deliver a version of this tax policy with some adjustments. NZ First killed a revenue source and the Act Party asked for a flatter system to be considered.
Cutting tax cuts
It is plausible the final policy offers even less than the 11.5% campaigned on. National took its tax calculator offline this week, making it hard for voters to compare it to the Budget.
Analysis by Interest.co.nz suggested the Government was about $1.6 billion short on money required to make the cuts fiscally neutral, and Willis has more-or-less ruled out new taxes.
There may be unannounced spending cuts that fill the gap but if not, she’ll have to downsize the tax cuts or phase them in more slowly.
Mark Smith, an economist at ASB, said the income tax cuts would likely be smaller than in the package originally announced, due to the revenue shortfall.
National’s tax package was designed to be isolated from the fiscal strategy and economic context. This was always a fiction, but has become harder to justify as deficits deepen.
Smith said Treasury’s economic forecasts were likely to confirm a downgrade in nominal GDP which will mean the gap between government spending and revenue will widen.
“Incorporating tax cuts will dent Crown revenues even if we do expect the size of the package to be scaled back,” he said.
Doug Steel, an economist at BNZ, said he doubted whether “any meaningful surplus” could be achieved in the forecast horizon — which runs out to 2028.
“A structural deficit and cyclical pressures, that we have long pointed out, make for an awkward backdrop for a budget,” he said.
Income tax cuts were a non-negotiable promise to voters which the Government cannot walk away from now, particularly since they have already cut property-related taxes.
Long walk to surplus
The real test for Willis will be whether she can chart a credible path back to surplus within the forecast without destroying the public services New Zealanders rely on.
Miles Workman, an economist at ANZ, said whatever new policy mix was described on Thursday would be less important than the ongoing fiscal consolidation.
Willis would need to adopt a $3.2 billion operating allowance this year and then stay below $3 billion in each subsequent year to achieve a “wafer thin” surplus in 2028.
She has given herself permission to match Labour’s operating allowance, at $3.5 billion, in this budget while also warning she couldn’t make a habit of it.
“If we were to continue with the spending allowances set by the previous government, the operating balance would not get back to surplus until the year 2030/2031,” she told the EMA.
Prior to the election, National said it would spend $3.2 billion, $2.85 billion, and $2.7 billion in each of the next three budgets, compared to Labour’s $3.5 billion, $3.25 billion, and $3 billion.
The Treasury warned, in its pre-election update, that future governments would have a difficult time sticking to even the higher spending track.
Budget cuts which have shocked the public sector this year will likely just be the first round, many chief executives will already be thinking about what to cut next year and the one after.
And at the end of it all, there will have been another three years of inflation and Willis will be wanting to take another swing at income tax brackets.
Love it or hate it, Budget 2024 is only the beginning.
109 Comments
Its funny how many on this site said the population is going to have a hangover after all the $ were dished out and cheap money thrown around during covid. Labour wanted to carry the party on as long as they could, now everyone is sobering up, and like most parties, realising most of the mess was done in the last few hours of the party, if it had stopped a lot early we would'nt be in this position. And they are hating the headache.
But it looks like they still have the credit card out, checks notes, for tax cuts - mostly benefiting residential speculators. And pushing through projects that might fail to be approved when normal scrutiny is applied. And what do you know, those companies with ideas just happen to have donated to National. Lets not even start with the associate health minister's written concern for tobacco companies profits. Are they breaking up the party, or simply changing who gets to party?
And I am not sure you can call the coalition the adults in the room, when they still have active policies like 'stopping the covid mandates' when there are no covid mandates left that they can point to as what that policy is for. https://www.rnz.co.nz/news/political/516832/questions-about-coalition-s-covid-19-vaccine-mandate-pledge
While those "tax cuts" for residential speculators are argued as a "standard accounting practice", FCM's comment about the party and dished out money etc was also enjoyed by Landlords.
How many Landlords doubled down on debt at low interest rates? Acquiring another rental or 2? As interest rates rose on bigger loan balances, any tax the Government may have received from cashflow positive properties is eroded away by the growing deductible interest expense. We could not have Landlords tightening their belts through frivolous borrowing choices, that's only reserved for recent FHB.
Robertson began the process of jettisoning etc? The article says he went in search of. Yes with as much chance of success as a myopic forager looking for a corner in a round tower room. It needed the Auditor General’s report in December to inform him where much of the candy floss had disappeared, uncontrolled and unaccountable. Talk about Nero fiddling etc.
That's basically the attitude over on places like Reddit NZ ... "we should stay in lockdown for as long as it takes, and spend whatever needs to be spent". Fast forward a few years and it's now "whaddaya mean there might be some unpleasant consequences?".
That's not an endorsement of what the government is proposing, more I find it "amusing" (for lack of a better term) that there seems to be a significant number of people who think that you can have your cake and eat it too - as much as you want - and not wake up with a sore tummy.
FFS Nicola implement a CGT or land tax and be done with it. You're not meeting your targets, you won't meet them next year or the year after given those must be adjusted down to account for the current over spend. The economy is on a slippy slide on your watch. You can "Labours fault" all you want, but you're following the same path as them, refuse to adjust tax, and can't control the spend. Revenue and the allocation of tax is the elephant in the room.
Full steam ahead toward the blown out bridge, will this big old train fly?
Labour's May 23 budget was a cuts / austerity budget - real terms cuts all over the place and completely unrealistic reductions across many services. And, that was before RBNZ crashed the economy and tanked the tax take. The media were so keen to paint Labour as the big spenders that they didn't read the detail or do the math. My forecast is that the coalition's budget will barely (if at all) reduce spending compared to Labour's planned forward track.
"...completely unrealistic reductions across many services"
The reality is that Labour increased the public service by over 18000, approx 40% from 2017 (including thousands in the last 6m before the election) - with no significant improvement improvement in the delivered services.
Not to mention the billions wasted.
So if National are cutting thousands of jobs, where are the billions going now? They're still over spending.
Also, as noted below, what is the target size of the public sector? What does the increase in size look like spread out and averaged since 2008? How does that compare to general population? How does that compare to OECD?
The reality is that Labour asked the public service to do loads of reform and legislative work all at the same time - at the same time as rebuilding capacity to do things like getting houses built. The public service also got a tonne of new requirements to deliver against - select and estimates committees, long-term insight briefings, new digital standards, ICT security requirements, major system replacements etc etc. Our flabby legislature also leads to a considerable build-up of work over time - lots of our laws require Govt Ministries to do ever more work on a growing list of things that must be managed a certain way. I have done a lot of contract work in recent years as a result of these combined demands (as have many others that had the requisite skills / knowledge). Note that all of the increase in the last 6 months was contractors being bought in house as Govt cracked down on consultancy spend!!!
Anyhow, all of this extra work led to a significant increase in the number of staff (unsurprisingly). Was all of the work asked of the public service high value? No, of course not. Should some of it be stopped? Yes. Is the right way to go about this giving Ministries a 7%(ish) target and asking for options back within 8 weeks (including Christmas)? Almost certainly not. All that Govt have done with this crude cut execise is create chaos and crash productivity. And, because it takes time to reduce embedded, internal costs, the impact of the cuts will be absolutely frontline - mainly focused on external spending with other organisations (NGOs, suppliers etc) where contracts can be cancelled quickly.
Sorry Jfoe but giving the ministries a percentage to deal with and set them to get on with it is the right thing to do.
The other end of the range of options was for PM Luxon to interview 20,000 people and decide who is to go. Plainly ridiculous.
Then you could speculate that the percentage thing is only the start. The low hanging fruit if you like. Look for the next step. Possibly tomorrow.
It's not austerity. It's freeing resource to move from the unproductive to the productive
What grits me about the public service is everybody is working hard, without useful result.
I don't see 100 policy analysts in a years work do better than an individual taking a week. Possibly worse.
"The other end of the range of options was for PM Luxon to interview 20,000 people and decide who is to go."
Reductio ad absurdum (and your post become nonsense with it ... Just sayin')
Have you ever undertaken the role of policy analyst? Having to deal with ministers, party donors, lobbyists, those with 'I have an idea', the moribund departmental staff, continuous IT upgrading and having a pair of policy analysts required for every meeting with said minister as quite frankly a number of them are just nasty' B...s' to their junior staff. If you want a useful result cut to the chase and get rid of the first four. The minister only needs to be involved when they are are advised of the conclusion.
Forgive me for being snooty, but that's nonsense. The budgets that the % target applied to were fairly random. So, some ministries would have had to sack all of their staff three times over to hit target, whereas others could easily achieve their target by stopping one or two funded programmes (that may have been already earmarked for closure in a couple of years time).
Zero targeting is stupid. Given 6 months and some decent guidance, Minister scould have made some deliberate and better-informed decisions. They might have even saved some money net. Mind you, the Govt clearly sees (like many on here) a smaller public service as a performance target in its own right.
Worth saying that it is already abundantly clear to the senior people I speak to that Ministries are going to need more policy analysts to deal with the Govt's agenda. When you start tearing stuff up willy-nilly, the clean-up is messy.
Indeed, I also worked on 3 system enhancements/replacements in this time that have seen better services delivered to ministries and have set their operations up for the next 15-25 years. We were just about to implement another one when the government pulled the plug on it with the upgrade. I guess that windows XP system will have to just keep going for another 20 years? Don't worry, that system storing sensitive information is not insecure at all...
I think the effect of these extra jobs is wildly overstated, let's assume they're all earning $100k, so 18,000 x 100k is $1.8 Billion, a shitload of money but hardly enough to be the primary driver of inflation.
In the same time period, superannuation went from $12 Billion in 2017 to $20 Billion a year now and growing. Then consider that medical care prices have skyrocketed, import prices are up across the board and then the population has also increased by around 12% without an increase in GDP per capita, we are having to spend more just to stand still. It's so simple to blame it all on Labour but I honestly think most of these issues would be much the same even if National was in power for the past 6 years, but it's easier to just blame it on the other team.
Yes, the government department cuts more ideological than logical. The across-the-board cuts make no sense. Would be far better to go through line by line and remove those of least value which would likely mean big cuts in some areas and none in others. The level of uncertainty in the public sector currently is palpable and will not be resolved for several months until jobs are confirmed and new teams formed, all impacting on work being done. Next, all the MPs will be wondering why they have not hit their targets.
I have advocated on here for Super to be income tested (not means tested) but now I think more drastic explanation of who is eligible for Super.
just limit it to those who are retired, and not working at all.
Over 65? on a governance board? called up by your mate in govt to do a biased review that you collect $200k to do? Working as an employee?
then you aren’t retired and clearly do not need retirement benefits. if you are working and can’t afford rent/mortgage? Then get tested for Accommodation supplement etc like every other worker does.
Spending time in the garden? Always on holiday? Not beholden to anyone else’s timeframes? Then you aren’t working and are retired. Then you get all the retirement benefits.
Devil's advocate here, if you haven't seen a measurable improvement in delivered service from a 40% increase in headcount, would the absence of that head count increase have resulted in a worsening of the service?
Also, hasn't the public sector worsened over the years from 2008 to 2017? To see "no significant improvement" is an improvement on going backwards right?
There are 2 plausible scenarios where a 40% increase in headcount might not result in improved services and yet might still be justified:
- The headcount was increased to reduce the reliance on external contractors. Developing and nurturing internal expertise could result in cost savings over time
- The headcount increase was required as service delivery had been eviscerated and additional demand has increased to such an extent that increasing 40% only allows you to continue to tread water
Not saying this is what has happened but just pointing out that it's not as simple as the Hosk listeners make out.
"Devil's advocate here, if you haven't seen a measurable improvement in delivered service from a 40% increase in headcount, ...... "
Does preparation/behind the scenes work initially go largely unseen before anything comes to fruition?
" ..... would the absence of that head count increase have resulted in a worsening of the service?"
Yes I believe it could. Gutting a whole lot of experience from Govt Depts has caused previous debacles (Novopay comes to mind). If taking steps to reposition in order to be able to better address this country's future challenges or better take advantage of opportunities have now been dropped in a blanket reduction of overall public service numbers for the sake of simply finding money for promised tax cuts then I am far from filled with confidence. My mind cannot help connecting this position with the Govt's decision to cancel the Cook Strait Ferry project Without first developing a plan B.
If people are finding it hard to retire now, what will happen if they add a land tax? Give out pension on one hand, give it back as land tax on the other. Rates are already a land tax, they are based on the value of your property big house big tax, small house not so big tax. Personally I don't think that seems like a good idea the more fixed costs you add the harder everyone's retirement will be.
Or save for anything else for that matter ... !!!
I want choice!
And to provide us with choices, we need to spread taxes over far more income sources than spending (GST) and incomes (PAYE) and profits (business taxes) and ticket clipping (fuel taxes, alcohol, etc.)
"Give out pension on one hand, give it back as land tax on the other. "
You know that is how most benefits are treated, right?
You add the benefits (call them what you want:- pension, sickness, unemployment, etc.) to whatever other income you may have, and the tax (PAYE), is calculated on the sum (total).
"Again, not arguing for more tax, just shifting how revenue is gathered so the cost isn't as concentrated on people's incomes."
Another person going blue in the face? (I am too.)
When will people get it through their thick heads - it isn't about more tax - it's all about redistributing who pays it so the whole process is fairer while NZ Inc. become more productive in the process. The vast majority - especially younger people - will actually have a bit more while some of us (older) wealthier people will pay a bit more (and I have absolutely no problems with that!)
Restoring interest deductibility, and then adding a CGT seems to be the most "fair and reasonable" solution from where I'm sat.
I have no property investments (well aside from my own home, which the bank owns like 50% of anyway) and you'll catch me leading the Thursday's carkoi and campaigning for TPM before you see me buying resi investment property.
However, if the property is an asset that the investor purchases to generate a return, I don't see why they shouldn't get tax relief on the interest ... I get tax relief on the 2% interest on my business vehicle loan. A business is a business is a business.
HOWEVER, it's abundantly clear that generating capital gain is the underlying business model for property investors. Therefore, tax should be paid on that basis.
Where so many of the issues surrounding property investment seem to stem from is the shapeshifting manner in which it can both be a business, and nothing more than a humble means for "mum and dad getting ahead", depending on whatever is most beneficial reputationally and/or financially to the property investment industry.
Treat it exclusively like a business - with all the same rules, tax treatment etc - and then we can hopefully move forward.
"Does highlight one of the issues with a CGT that it isn't a very consistent or predictable form of revenue."
Not necessarily so. Kiwimm presented just one way a CGT could be implemented. There are many, many other ways. For example:
- backdate it using a CPI
- backdate it not using a CPI
- backdate it to the last sale (my preference, immediate revenue)
- payable on gross
- payable on net, current sale - last sale (my preference)
- exempt OO sales (distortionary)
- include all sales (my preference)
- exclude OO sales when trading up (and 100% of sale goes into the next OO property)
- payable annually (needs a low rate! and as messy as f#ck)
- payable on realization (my preference)
- exclusions for sickness? disability?
- And I could go on and on as I drill into the nitty / gritty
- But the first cut should be broad based and low-rate
Some suggested just copying the Australian system. Not a bad place to start. (Although not a great one either!)
As always - my view is to "get it on the damn books first - and then tinker!"
For the 100th time, the Govt can only run a surplus if the private sector + the rest of the world run a combined deficit. So if Govt want to run a surplus of 1% of GDP in 2028 (for example) and our balance of payment deficit is 5% of GDP that year (as forecast by RBNZ), then the private sector will have to run a deficit of around 4% of GDP. That would mean the private sector increasing its debt by around $18bn. No big deal you might argue, our housing ponzi economy means that this is a fairly typical increase (noting this year we're down around 3% of GDP, ~$14bn)
BUT, the economic 'growth' that Govt want to see will rely on Govt deficit + private sector deficit comfortably exceeding our balance of payments deficit. So, if Govt want to see economic growth of 2% to 3%, while Govt is running a 1% surplus, with a balance of payments deficit of 5%, we will need private sector debt to be increasing at 10% to 11% of GDP. That would require a private debt boom at around 2016 levels (or pre-GFC when we tipped over 15%). Really?
You might argue that we just need to work our balance of payment deficit down. But, how so? An increasing portion of our BoP deficit is primary income (dividends, tax-dodging licensing fees etc) and the price of the stuff we export is falling behind the price of the stuff we import. And, that's before we start poking China by cosying up to the US.
Precisely. Hard to encourage or facilitate the private sector to grow it's debt in the current climate given the flow of money is slowing still and plenty of business income is going to servicing interest on the current debt levels. Unless they have some form of incentive for investing in capital, which I can't imagine businesses would be doing when their profits are dropping off and costs are increasing, I can't see this happening without a fair bit of pain and the possibility of another monumental OCR shift like after 2008 when they realise just how squeezed the economy already is, and how their forecasts were based on incorrect outdated economic theories.
Yes - more debt for the same stuff. Sounds a whole lot like a productivity downgrade to me.
Trying to imagine where OCR would need to be to get such growth and where that would put yield, and how long it would last this time. Doubt we'd get another 10 years of blood out of this stone.
Most of our increases in productivity have resulted from higher profits rather than improvements in efficiency. For example, the electricity companies fired loads of workers in the early 1990s, milked the assets, and made big profits. Voila, a huge increase in productivity.
Now what drives bigger profits? A juicy flow of debt into the economy! Private sector surpluses (profits) depend on increases in Govt or private debts (or trade surpluses). The sooner we start to realise what a con all of this is, the sooner we can move onto our actual challenges!
Funny isn't it, when everyone realises that the 'rockstar' economy of 2020-2022 was simply due to being juiced with huge flows of productivity, sorry I mean debt, which equated to more corporate profits, record even, and now the average punter you talk to out there can't make the connection as to how this all related to where we are economically sat currently.
And there, right there, you've nailed the problem !!!
Businesses in NZ have become accustomed to the RBNZ instigating booms and busts with their heavy handed use of the OCR.
When the OCR falls, NZ businesses add more Labor to increase Production. (Labor being quick and cheap to pick up and drop.) Not until stability returns (an equilibrium) does NZ business start to invest in more Production that doesn't include simply adding more Labor.
Why we simply accept the massive damage the RBNZ does to NZ Inc over and over again is completely beyond me.
I guess protesting about everything else except this is so much more fun? But seriously - how many of these other issues would fade away if we didn't have a RBNZ making them all worse?
But don't you know, 2017 was peak NZ. In fact, up till this point, the country at that point is regarded as peak civilization, and is used in text books all over the world. If we can just get the civil servant number down to the same amount, we have a chance of reliving it again. The civil servant number is alone known to be a highly deterministic indicator of country goodness. Come on guys, back me up, where are the adults here?
Perhaps a ratio could be explored to assess the statistical significance. Number of population in NZ 2017 to number of public servants compared to now, and has the ratio grown or shrank. Interesting thought though around how big it should be, especially given that every govt makes changes and has their own priorities and pet projects.
The use of population as a global justification denominator is a fundamental error which ignores the myriad opportunities for improving service delivery efficiencies via eg technologies instead of selfserving empire building
Doctors nurses teachers and police are the main obvious ones who could claim a population base - a small % of the total public sector bureaucracy who largely resist public facing roles nowadays (preferring to work from home)
But again, I think it pretty myopic to blame the majority of our issues purely on Labours incompetence, especially focusing so much on an increase in headcount. Heaps of money was wasted on pointless things but the overall position we are in is far more due to external factors rather than anything the previous government did. So many costs have gone up that are the main drivers, especially energy and other imports. And then the demographic shift that is taking place can't be ignored, the increase in the retired population compared to working age is a huge driver of increasing costs, it also also puts more pressure on medical resources which further increases cost on the taxpayer.
I mean look around at other countries are all having the same issues, it's not unique to NZ. Being such a small country there is only so much our government can do to change outcomes for better or for worse.
Crossed flintlock duelling pistols.
Re gun control there's "doing something" and then there's real control. The 2019 attacks were due to a lack of gun control. I.e. the Police didn't actually vet the terrorist (their legislated function) before giving him a license to indulge his sick violent fantasies through granting an E class licence (the one where he could buy his semi automatics). That was the failure of gun control.
The government response to the 2019 attacks was "doing something", part of which was making sure Police did their actual job. The other parts we can argue about, but IMO went too far the other way and has probably diverted excess taxpayer money into things that won't actually have a large effect on the policy problem.
The licensed firearm owners wouldn't dream of protesting about their sport using violent imagery like duelling pistols in their promotional material. That would confirm objectors' prejudices. So why the double standard re. TPM?
I don't think ACT's attempts to reverse recent gun control legislation mean that TPM should have free reign to use violent imagery/messaging in protest without criticism (NB I support their right to protest, and I think you should be allowed to say what you like as long as its not an actual incitement to violence BUT people can call you out on it and the media should). I can't imagine any other group getting away with such messaging without criticism, that is my complaint.
For disclosure, I'm not a gun owner and never will be. I've fired guns on two occasions in my life - an air rifle at a primary school camp in the 90s, and once in Las Vegas I went to one of those "hire a gun" ranges while my wife was out shopping and got to let rip on a cardboard cutout that looked suspiciously like Osama Bin Laden, with an AR-15, and then a fully automatic AK-47 (that was honestly rather fun, but also gave me an appreciation for why no private individual needs such a weapon).
I think some of the more recent measures put in place make sense, some seem more political theatre than anything useful - designed at the time to deliberately juxtapose NZ against the likes of the United States - I'm not sure where the tipping point should be and where legislation hits a point of diminishing returns.
The Public Service Association, the country’s largest trade union, has described this approach as being “heartless and chaotic” and warned it will lower the quality of public services.
in MSD, they usually do 'preplanning for work planning', back 2017ish. then Labour came in, MSD started to do 'preplanning of preplanning for work planning '.
the newly hired layer of bureaucrats did not translate into productivity, but became more dead weight on front-line workers.
I am not against put more money into public services, in fact I support it. but I hate those who throw more money be delivers worse outcomes. it's a crime to do so.
Nah people here think the best use of a nurses, police, doctors time is filling in admin forms, ordering the office supplies, researching new medications, organising training, processing invoices, managing the office lease contract, setting up IT systems, advertising, vetting and recruiting new staff, researching which policies are the best preventative measures to avoid the need for nurses, police and doctors in the first place.
Phew, once the coalition cuts all those back-office jobs you'll be lucky to see a nurse, doctor or police as they'll be out back in the back office
Yes we are. It's incredibly busy right now. And we are very expensive admin people. It take teams, with specific roles, to work together to run an efficient service. We all need to work to maximum scope of practice to do that, and there are vital backroom rolls to ensure that happens. But I'm bored with it all, it's not going to change, except for people leaving my field in droves. No-one wants to listen to those of us on the front line or those that support us by working hard out the back. They just want to label us with the current trendy word - it's tedious and insulting, and comes from people who have no working knowledge of my particular sector except their own personal experience. I have so many practical ideas, as do colleagues, the system doesn't want to know. Love my job. Sad to see the effects of multiple decisions over the years culminating in where my sector is now. The recent smoking legislation change being a particular insult from an ex-GP, now Minister of Health.
If people want to smoke, they'll still smoke. It's like Prohibition in the USA 100 years ago...it didn't work, The gangs and criminals profit. There's shootings and bombings in Australia over tobacco territory.
It impoverishes the already poor. Who smokes the most in NZ...maori.
And right on cue ... https://www.rnz.co.nz/news/national/518097/our-definition-of-productivi…
Here's how Labour spent your hard-earned tax dollars folks..........boondoggles galore.
The abandoned Income Insurance Scheme
The moronic gun buyback
Billions for maoris
The Pike River cock-up
The TVNZ/RNZ Merger
The Harbour Bridge non-cycleway
3 Waters
Bike Lanes no one uses
The Light Rail fail
14,000 extra bureaucrats
Millions wasted by Labour.
https://www.facebook.com/1522369502/posts/pfbid0nqya8k8XqAxZGAuDoFy9cUN…
This tax receipt website from last year was pretty good for showing where the majority of funding went. Some of the largest blowouts over the last three years came from the COVID work and buisness subsidies which have all been wound down now. All of what you listed doesn't add up to the massive amount you think it would.
The abandoned Income Insurance Scheme
$19.4 Million
The moronic gun buyback
$102 Million
Billions for maoris
Any more detail on this?
The Pike River cock-up
?
The TVNZ/RNZ Merger
19.6 million
The Harbour Bridge non-cycleway
$51 Million
3 Waters
$1.2 Billion
Bike Lanes no one uses
Can't get any easy figures on this
The Light Rail fail
$221 Million
14,000 extra bureaucrats
$1.4 Billion assuming they were all getting paid $100k (Probably weren't)
It's some very shit maths and there certainly was waste (like that bridge $51 million wtf), but over six years your list is like $3 billion extra. I'm sure there is more but it's hardly enough to justify the claims that they alone have caused all the problems we are seeing now. For example in the same time period super went from $12 billion to $19 billion. All the little things labour did that were a waste of money are small compared to the real drivers of inflation like energy costs and demographic shifts.
And again we aren't alone facing these issues, almost every country is facing rising costs and an increasingly unstable world, but simply blaming it all on labour/national isn't going to get us anywhere as it's not really acknowledging the actual issues we are facing.
Well perhaps you need to buy a truckload more property, reap the capital gains and help out by contributing more than your fair share to the government coffers. Just make a voluntary donation. After all you say almost every day it's easy. Time you stepped up. You obviously have enough.
I contributed more than my fair share to government coffers when I paid an extortionate tax rate of 66c in the dollar. Maybe you could make some money and contribute, I mean lots of posters here tell me how easy it is to get rich buying and selling property, but not many seem that keen on actually doing it.
You could be an exception...you think? You'll only need to borrow a million or two and Bob's your uncle.
Tax, tax, tax. One way of getting rid of the productive citizens of this country. It's all been done before by the way.
Before Roger Douglas slashed and burned, tens of thousands of kiwis were lured to QLD with the promise of lower income taxes and no death taxes. And they left....in droves.
Taxes are bad for the economy - they take money out of circulation, cost jobs, and the government wastes it. I've got no problem with the govt helping those that really need it, but socialism's a scourge.
The majority of the tax in NZ is paid by the productive big earners. Once they quit the country it'll be another Zimbabwe.
You want examples of how Comrade Arden and her lackeys squandered billions? Look above.
Landlords are entitled to the same tax treatment as everyone else, but they pay more tax than industrial or commercial landlords. What's fair about that? And since Robbo decided to tax landlords more, rents have increased....unsurprisingly.
ugh
Tax, tax, tax. One way of getting rid of the productive citizens of this country. It's all been done before by the way.
Before Roger Douglas slashed and burned, tens of thousands of kiwis were lured to QLD with the promise of lower income taxes and no death taxes. And they left....in droves.
Yes - this is why we should consider significantly lowering income tax and increasing other taxes to compensate. Your first comment negates your argument.
Taxes are bad for the economy - they take money out of circulation, cost jobs, and the government wastes it. I've got no problem with the govt helping those that really need it, but socialism's a scourge.
The majority of the tax in NZ is paid by the productive big earners. Once they quit the country it'll be another Zimbabwe.
This comment makes no sense. Government spending happens first, tax negates it. That's how we get a deficit in the first place. More spending before taxing. If the govt spends and taxes $1bn, there is net zero impact on the private sector (other than influence of that spending). If that $1bn is spent on workers, that (surprise) creates jobs. The allocation of spending has been a problem, sure. Neither party willing to address this.
Landlords are entitled to the same tax treatment as everyone else, but they pay more tax than industrial or commercial landlords. What's fair about that? And since Robbo decided to tax landlords more, rents have increased....unsurprisingly.
Ok then - CGT, like everywhere else. Commercial interest rates, like a real business. That's "fair". No preferable treatment over OO (DTI). Same lending conditions as business (you're not getting $1m loan to open a business returning $600pw). Remove accommodation supplement, that's the real scourge.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.