Tax Cut Austerity Blues.
Willis vs Robertson.
The leaders have had their go, they’ve told us the “what?” and the “why?” of their promises. Now it’s the turn of the would be Finance Ministers to tell us the “how?”, the “how much?”, and the “when?”
A chance for those competing for the second most powerful job in the country to take us through their plans, their assumptions, and the concerns that have been raised.
Nicola Willis’ plan to fund tax cuts by selling real estate, for example, has come under a lot of scrutiny. Can we really sell enough houses to foreigners to meet their target? And what will be the impact on house prices if we do?
Do we really want to sell twenty billion dollars worth of our homes to speculators? I doubt many Kiwis like that idea. It’s certainly a terrible long term strategy. We can’t fund our way in the world by selling houses to wealthy foreigners forever.
How many job cuts is Nicola planning? Is it roughly 6,500 as her plan would suggest? Or will it be more like the 15,000 jobs in David Seymour’s plans?
National are currently running advertisements ascribing all the tax policies of Te Pāti Māori (TPM) and the Greens to Labour. That’s not how coalition negotiations work, but if National want to play that game then it’s only fair that they take responsibility for ACT’s policies.
ACT may have significant power after the election, and they’ll demand their pound of flesh from the squeezed bottom. If the parties of the left do get across the line there’s no way Labour will agree to TPM tax policies that they’ve explicitly ruled out.
The big question for me is - what happens to National’s tax cuts if their revenue projections prove to be as inaccurate as the economists think they are?
I don’t think they’ll walk them back, that would be too much of a loss of face. I doubt they would want to borrow more, that would be akin to funding government expenditure with a payday loans company, and again would be a massive loss of face.
That only leaves the tried and true approach of Tory parties around the world. When you’ve promised your supporters irresponsible tax cuts, and you’ve ruled out borrowing, that just leaves… you know what it is… Austerity.
More public sector job cuts, more cuts to public services, harsher penalties and rules for those receiving benefits. More pressure on people doing it hard, and abject misery for those currently struggling. National want to turf people out of emergency housing in motels, ACT want to stop the benefits of those with addiction problems.
Would anyone like to hazard a guess as to whether austerity measures will increase, or decrease, crime? That’s right we’ll be needing more prisons, but don’t worry Act, and therefore National under their belief in shared responsibility for possible partner’s policies, have got a plan for that. It’s not cheap mind you.
So to the debate. Grant Robertson talked about the challenges of the last few years and that it’s necessary in government to respond to such events. Meanwhile Nicola was commencing another performance of “armageddon is upon us” , an old spiritual number from the National party songbook.
She proceeded to give Grant Robertson a condescending lecture on what he’d been doing, as if she was talking to the mentally challenged. Nicola might want to save that sort of insufferable, disdainful tone for when it’s warranted, like in her caucus meetings, not when she’s up against the man with the sharpest tongue in parliament.
She berated him for having invested in initiatives to do with health care, or fresh water management when we couldn’t afford it. Looking at Queenstown at the moment, maybe doing something about water management wasn’t such a bad idea after all.
The elephant in the corner said “then what about your tax cuts, can we afford those right now?” But everyone ignored it because elephants can’t talk, and there wasn’t one there.
Both Jack and Nicola seemed to be having difficulty understanding why the government would spend more money in tough times, but less in good times. If Covid, and the subsequent weather events this year, don’t qualify as the proverbial “rainy day”, when you do spend a bit more, then I’m not sure what would?
I’m kidding, National are quite clear - it’s tax cuts.
Jack asked a direct question at the risk of an interview breaking out from the two politicians talking over the top of each other.
He asked Nicola if the country would return to surplus faster under National than Labour. I assumed she’s immediately say “yes”, you know given it’s an election and National are campaigning on being the responsible stewards of the economy. But there was a long silence, contrasting against the yelling of a moment earlier.
Her reply was “well, it’s a very very difficult set of books that Grant Robertson has delivered us”. Actually it’s not, the Prefu announced, showing just where things are at, was better than economists were expecting.
You can’t strut around demanding that the world is coming to an end, and then when you find out it’s just a bit cloudy, start wailing that you had no idea and you couldn’t possibly have planned for it. That lacks credibility.
Nicola waved her arms around, then clenched her fists and banged them up and down, saying “let me answer”, while not answering.
The problem for Nicola, as Grant pointed out, is that if National are going to claim they will return us to surplus faster AND have tax cuts, which Nicola stated they would. Then they are going to have to cut even more public spending.
Hello Austerity, my old friend.
Jack then moved to modeling and said the fact it still hadn’t been shown had moved beyond being credibility on the line and was now integrity on the line. He asked Nicola straight out if detailed modelling, the mythical spreadsheets, even exists. Welcome to the debate Jack, good of you to turn up.
Nicola didn’t respond “yes”, she replied “thank you for asking this question”, but I don’t think she was being sincere. To be fair it’s hard to know, I’ve nothing to compare it to.
Nicola did not show us any spreadsheets, she referred for the hundredth time to the same old brochure they released showing a couple of tables on a page, then she showed a one pager saying it was all kosher, or at least theoretically possible.
As if the single page from the brochure wasn’t bad enough when Jack pushed her on whether they would actually release modelling she told him they had a full plan, not referring to a single page - but to a single line on that one page! One solitary line.
Jack grinned like he’d just heard the most ridiculous thing he’d ever come across and pointed at the page asking “is that it?”
Then Nicola started complaining that no one was asking Grant to show spreadsheets, ignoring the fact that he hasn’t released a plan that pretty much every economist in the country has said has billion dollar holes in it.
Jack asked her if she stuck by the promise she’s made to resign if her revenue plans do not deliver. Nicola started talking about imaginary buffers, that economists apparently can’t see. In the end she said “no”, that the plan would succeed or fail based on economic conditions, but that she would definitely deliver the tax cuts.
Sounds like our old friend Auster.. ahh you get the picture.
Grant spelled out how unrealistic it was for National to sell 20 billion dollars worth of housing, and how economists had indicated how undesirable the consequences of inflation and rising house prices would be, even if it were possible. He reiterated that if National are going to deliver their tax cuts without the revenue, they will have to make even deeper cuts to our public services.
The Austerity Blues, 12 bars of depression, or a new name for the National party.
Nicola didn’t want to talk about how many public servants they planned to lay off. She will defer that to public sector CEOs, asking them to cut hundreds of millions of dollars of unnecessary wasteful spending. Which kind of makes me wonder, if there actually were hundreds of millions of dollars of waste to cut, which I don’t believe for a moment, then surely they should be sacking the CEOs!
Grant was clear that if they make deep cuts of this size, to departments like customs or conservation, then the public will see the knock on effect of longer queues at immigration or our conservation estate being worse off. It’s simply not true that you can make cuts of that size without impacting front line services.
Keep in mind these are the cuts that National is telling us about, not additional ones they would have to make if their revenue forecasts turn out to be as wrong as everyone, other than Nicola, thinks.
Tame asked Nicola how they would simultaneously deliver a great walk, as they have promised, and cut funding to DOC. Apparently the answer was cutting back office staff. Do you really imagine a department like DOC has lots of highly paid people just sitting around navel gazing? It’s just not credible.
Jack asked Grant if reducing poverty was a vote winner. What a question!
Grant wasn’t swayed by a poll that showed fewer than half the people surveyed, 40%, would be happy to pay a bit more tax to reduce poverty. He said regardless of how popular it was we had a moral duty to reduce poverty and to reduce inequality in New Zealand.
Obviously a poll question in isolation doesn’t tell the full picture, but you know - sometimes I just don’t like my fellow kiwis very much. In my opinion if you’re not willing to give a little to help those in poverty, then you’re not much of a human being.
I can’t imagine anyone on their deathbed agonises thinking they wished they’d done less to help others during their existence.
Grant said “in budget 2021 I was really proud when we restored the level of main benefits to where they had been, the value of them, when Ruth Richardson cut them in the 1990s. Every National government has ignored getting New Zealand to a more equal place.”
That is something to be proud of, I remember those cuts in the 90s, the “mother of all budgets”. They hurt people, badly. They damaged those lives, and made them harder than should ever be the case in a decent society.
I don’t want to see those sort of cuts hurt people again, solo parents, those unable to work due to disability, etc. I know you don’t either.
As for those other people, I really despair. The fact that many of them will find themselves in circumstances, during the next few years, where they regret voting for austerity, sadly doesn’t help.
I’m sorry there isn’t a more positive thought to leave you with, this is unfortunately the sad reality of what will happen if National and ACT are elected. And all for some tax cuts.
The tax cut austerity blues.
This song is about the UK, where they’ve been going down the road of austerity for quite a while. But I reckon it’s just as relevant to Nicola Willis, and I’m sure that given half a chance she’ll catch us up in no time.