10 October 2008 – No. 266
National’s tax package
National’s tax package sets out a three-year programme of personal tax cuts. Including the very recent tax cuts of 1
October 2008, this programme will give a person earning around the average wage a total tax cut of $47 each week, after
it is fully phased in.
The package has two key elements:
• The introduction of an Independent Earner Rebate.
• Changes to personal income tax rates and thresholds.
The package has been designed to be appropriate for the current economic and fiscal conditions. It does not restrict
future movement on income tax rates and thresholds.
Paying for tax cuts
The rebalancing of the tax system is self-funding and requires no cuts to public services or additional borrowing.
This is shown in the table below. Totalled over the next term of government, the cost of National’s personal tax cuts is
balanced by the revenue savings from:
• Changes to KiwiSaver.
• Discontinuing the R tax credit.
• Replacing Labour’s proposed tax cuts.
/ 2008/09 ($m) / 2009/10 ($m) / 2010/11 ($m) / 2011/12 ($m) / Total ($m)
Cost of National’s tax cuts / 290 / 1,290 / 1,834 / 2,300 / 5,714
Savings from tax changes / -217 / -1,101 / -1,969 / -2,710 / -5,997
Net cost of tax cuts / 73 / 188 / -134 / -410 / -283
To fund National’s tax package there is no requirement for additional borrowing and there is no requirement to cut
public services.
Manipulating the message
The number of staff employed to communicate the Labour government's message has grown by at least 112% in the past six
years.
At 1 July 2008 government departments employed 505 public relations, communications, media staff and contractors. Six
years ago, they had 238. New Zealanders know the service provided by these departments isn't twice as good.
The number of public relations, communications, media staff, and contractors has risen nearly 13% in the past year
alone, up from 448 in 2007, to 505 this year.
Notable departments to see increases:
• Department of Conservation - 96% increase
• Ministry for the Environment - 88% increase
• Inland Revenue Department - 100% increase
It is an interesting statistic that under the Labour-led Government we have seen an increase in the amount of extra
floor space leased for bureaucrats in central Wellington equivalent to almost four Te Papa size museums.
It droppeth as the gentle rain from heaven upon the place beneath
So said William Shakespeare in the Merchant of Venice. The new showering regulations, which take effect on 1 February
next year, are part of amendments to the Building Code Compliance Document NZBC H1 Energy Efficiency covering hot water
systems. To get any new building consent, the flow rate in showers will have to be approximately half that of existing
household showers. It will also be illegal to change any shower head to increase flow rates after 1 February.
Houses with solar, wetbacks or heat pumps may be using negligible electricity to heat their water. It is illogical to
put restrictions on shower flows when no restrictions are put on bathing which uses significantly more energy. These
regulations apply even if you’re not connected to the national grid or town water supply.
Political Quote of the Week
“Life is like a game of cards. The hand that is dealt you represents determinism, the way you play it is a free will” –
Jawaharlal Nehru - First Prime Minister of India
Dr Richard Worth
National Party MP
ENDS