30 May 2005
Budget 2005 - the anticlimax of the season
The past few weeks in Parliament have been action-packed. I doubt that even 'The West Wing' could have scripted a more
tumultuous political drama. It's had everything: animal abuse, a foot-and-mouth hoax, Saddam Hussein cronies on the
loose, Prime Ministers being sued, and, to top it all off, alleged tennis ball bullying. No wonder political
commentators have been wetting themselves with excitement - well, not literally doing a Dover Samuels, but feasting on
the political scandal all the same.
At least they were until the Budget was announced. The pitiful bore that was 'Budget 2005' was the anticlimax of the
season. Heck, Georgina Beyer had a greater chance of inspiring us with her rumba and quickstep renditions.
How Dr Cullen can even call this Budget 2005 is beyond me. To be accurate it should have been called Budget 2008 and
beyond, as most changes will not even come into place for at least three years.
A few days before the Budget was unveiled, talk of tax cuts was rife. I actually thought the Labour Government might
finally do the decent thing and give Kiwis a break, even if only as a political tactic to take tax cuts off the election
agenda. My optimism was severely misguided.
The personal tax relief amounted to a measly 67c, $6 or $10 a week depending on which tax bracket you're in. To add
insult to injury, the change in thresholds won't even take effect for another three years. I don't know how New
Zealanders can sleep at night with all that excitement and anticipation.
Dr Cullen would have us believe that we have only two choices: tax cuts, or effective health, education and police
institutions and services. But it's not a question of either /or. This Government has illustrated all too clearly that
over-taxing does not lead to better public services.
Since Labour took office in 1999 their tax take has increased 50% and the number of public servants has increased by
24%, yet hospital waiting lists are still unacceptably long, the NCEA is a complete mess, tertiary institutions are
going bankrupt from irresponsible spending, and the Police are at crisis point over the 111 system.
The message is simple, increasing taxes and the public service does not necessarily lead to more effective state
services.
National has a vastly different vision for New Zealand. We want hard-working people to keep more of what they earn.
Where is the incentive for Kiwis to work hard when the Labour Government is taxing them to the hilt and then wasting
that money on inefficient, ineffective bureaucracy?
Watch this space for an update on the exact details of National's tax policy when it's released. As we go to the polls
this year voters will clearly have a choice between a National Party that believes you should decide how to spend your
money and a Labour party that thinks they should take your money and then spend it how they see fit.
Get out your hotties
Carbon tax to send power prices soaring
Winter is just around the corner and with it is the spectre of some cold times, especially for some of our elderly. The
cost of power is already steep, but the imposition of the Labour Government's carbon tax is about to exacerbate this
problem. $200 a year may not seem much to some people but to those on small fixed incomes it may prove the difference
between keeping the heater on or turning it off.
This is a Government that promised, hand on heart, that after the "envy" tax of 39 cents on incomes over $60,000 there
would be no more tax increases. This latest tax is No 36. This is a Government with an insatiable appetite for taxing
fellow kiwis. Since coming to office in 1999 they have taken an extra $50 Billion more than they budgeted.
So what drives the rationale for a carbon tax? The headlong rush into ratifying the Kyoto Protocol is the answer. I
think the Protocol is a load of bollocks, but even those who hold a contrary view must wonder why New Zealand was so
determined to undermine its competitive base when countries like the United States and Australia wouldn't sign up. The
Australian Prime Minister said he wouldn't sign up because it would undermine Australia's industry and would cost jobs.
The same will happen here.
Let's put things into perspective. New Zealand contributes only 0.02% of all greenhouse emissions. The US and Australia
contribute 35%, but at least they were honest enough to tell us they wouldn't be ratifying the Protocol. On the other
hand, Russia, China, India and most Asian countries signed, but are deemed to be developing countries! These countries
are among some of the worst polluters, contributing about 43% of all greenhouse emissions, yet they carry no
responsibility or penalties.
The worst news for New Zealand is that the carbon credit windfall the Government was budgeting for now appears to be a
"house of cards". The forest sector is reporting record low plantings as investors exit the industry because of Labour's
policy. Consequently, the carbon credits that the Government is pinning its hopes on may be collapsing. National and
international analysts alike are predicting that New Zealand may, in fact, have a liability under Kyoto of between $9
billion and $15 Billion after the 3rd commitment period.
All this to try to address an issue that New Zealand has no influence over and a problem it hardly contributes to. How
do we fix a global problem without a global response? In the meantime those on fixed incomes who can't afford bread can
eat cake. This seems to be Labour's attitude. Some of our elderly will have miserable winters, and I for one won't rest
easy thinking about that.
ENDS