Sunday, May 26, 2019

To tax or not to tax... that is the question.

It has almost become de rigueur for a government on the ropes to leave the treasury empty so the incoming mob cops the blame a couple of years down the track. Liam Byrnes note to the incoming Cameron UK Government springs to mind.."I'm afraid there's no money" it said....not the most diplomatic note a treasurer has left for his successor.

Quite simply, in New Zealand's case revenue must be raised in order to repair what went on before. It is the system to blame for a lot of it. Keep slapping on coats of paint (electoral bribes) so everything looks glossy while underneath it is quietly crumbling, health, justice, education energy distribution, roads etc.

For some bizarre reason the Government that admits it will have to raise taxes ie. income, tariffs, GST, CGT or invent new ones is considered a failure.......NZ is living beyond it's means and that does not happen in two years.

These articles capture only the tip of the iceberg and I suggest anyone who puts country before profit read them...

https://www.businessinsider.fr/us/asce-gives-us-infrastructure-a-d-2017-3

https://www.cfr.org/backgrounder/state-us-infrastructure

It is interesting to see that it took Trump about five minutes before he walked out of the infrastructure talks with Congress citing the "investigations" as a reason. The real reason is that faced with the evidence of money required he would have to abandon his precious wall and raise revenue in some way.

Tax is what we pay for living in a just society yet I have heard politically well connected businessmen boast of how much the saved by using tax avoidance schemes that bordered on the illegal.
                                                          

10 comments:

Adolf Fiinkensein said...

Legbut

'What went on before' was some o the best financial management seen for decades, the envy of most western democracies, coupled with superb delivery of services.

You are deluded.

Lord Egbut Nobacon said...

If you say so.....

Johno said...

I say so too. Nats inherited a structural decade of deficits as the final throes of Clarke's government threw bribe after desperate unaffordable bribe at the electorate. Then they got the GFC and the earthquakes. None the less end result was a thriving healthy economy.

Yet the sycophantic liberal media wet their knickers over this government because the nominal "leader" is good at hugs and feelz,

Instead of damaging the economy and disincentivising productive members of society by raising taxes, you could consider reducing (bad) spending.

There's 4 billion to cut in KiwiFlop, free university for rich kids and the Provincial NZF Preservation Fund for starters.

Governments waste money. Look there to find money for health, education and infrastructure

Lord Egbut Nobacon said...

Johno....This has nothing to do with future proofing the country or directing money to where it's needed over the last 12 years....sycophantic liberal media, did Breibart tell you that??? any links to back up your claims?

The Clark-led Government was very cautious when it came to finances, and put New Zealand in a much stronger position in terms of public debt than most other advanced countries when the GFC occurred.

That same Labour Government went from a $386 million deficit in 2001, to a $2.8b surplus in 2008. During Key's National Government, debt as a percentage of GDP went from 9.1 per cent in 2009 to 24.6 per cent in 2016.

Anonymous said...

$4 billion for kiwibuild, are you on meds johnno

Psycho Milt said...

Nats inherited a structural decade of deficits as the final throes of Clarke's government threw bribe after desperate unaffordable bribe at the electorate. Then they got the GFC and the earthquakes. None the less end result was a thriving healthy economy.

That's the Nats' propaganda version of events, sure. Labour has its own version, in which the Clark government left the country well placed to weather the GFC by using surpluses to pay down debt rather than blowing it all on tax cuts like National demanded they do, and the Key government then spent nine years twiddling its thumbs while the environment, infrastructure and public services degraded to the point that the Ardern government has a job on its hands just trying to reduce the number of people living in cars, let alone fix the rest of it.

As is usually the case, the truth lies somewhere inbetween and there's not much to choose between Labour and National when it comes to the economy. The differences tend to be in where the benefits of that economy get directed more than anything else.

Adolf Fiinkensein said...

Anon @ 8:32

Try taking comprehension pills. Then write one hundred times "I must learn about commas."

Johno said...

Milt, the decade of deficit was forecast by Treasury in the 2008 PREFU. It is not propaganda from the Nats.

https://treasury.govt.nz/publications/efu/pre-election-economic-and-fiscal-update-2008-html

"As a result of the combination of weakening tax revenue and higher expenditure outlined above, we are forecasting the operating balance before gains and losses (OBEGAL) excluding New Zealand Superannuation (NZS) Fund retained revenue to move into a deficit of $31 million in the current year, which worsens to $3.2 billion by 2012/13. Projections beyond this do not return to surplus until 2017/18".

All this before the GFC happened, and before the earthquakes.

By the way, how are the government getting on with dealing with people sleeping in cars? How's "poverdy" coming along? Apparently nothing has changed, other than the fact we don't hear lefties constantly bleating about it.




Psycho Milt said...

The Treasury forecast wasn't propaganda, the National spin on it was. You'll notice we didn't actually have a decade of deficits resulting from the GFC, because the government changed its policies to ensure we wouldn't. That's what governments do.

How's "poverdy" coming along?

The contempt you guys feel for the poor is really something. Fortunately, your representatives are not in government any more, but it's going to take a while to clean up the mess you made.

Johno said...

Anonymous said...
"$4 billion for kiwibuild, are you on meds johnno?"

No I am not. Is English a second language for you? Go back and read my comment slowly, moving your lips if it helps.

PM: Why are you trying to shift the argument into Nat spin? There was a forecast decade of deficit, from Treasury. What the Nats said afterwards is irrelevant. Weasel on...

Egbut: "The Clark-led Government was very cautious when it came to finances".. .yes they were for about one and a half terms. Then they saw they were about to lose power. Then out came the bribes and the excessive spending, the expansion of the state sector and so on.

How do you reconcile your "cautious finances" with ten year forcast deficits? You can't, of course.