Breathtaking Bribery

National have announced the impossible policy: Cutting petrol taxes when he won't even be in government, to "return" GST that isn't being earned.

To clarify: Brash has proposed cutting excise tax from 1 October.

This is dumb for three key reasons.

First, there won't be a new Government in place, no matter what happens at the election, on 1 October. The earliest any swearing in is likely to happen is three-four weeks after the election, assuming the result is clear. Yet another mistake from the accident-prone gentleman leading the National Party.

Second, the GST issue is a red herring. Within the growth of incomes, people are spending more on petrol because of the high prices, and less on other things. The amount of GST taken on petrol has increased; the amount of GST taken on "everything else" has fallen. I can't imagine the net change is significant.

Third, it is dumb because it shows National is in serious panic mode. If they think $3 a week for a few months is going to swing voters, then they're in la la land. They must be seeing the results of Bretherengate in their internal polling, and be reacting accordingly.

I won't even go into other problems:

• that the policy contradicts what Brash said last week when he stated clearly it was unaffordable to cut the 5c levy.
• that every cent of the levy is going to roads, so cutting it means cutting roading spending - or cutting other public spending instead.
• that it just proves those memos were on target, when they advised Brash to "slosh funds around and buy your way to the Treasury benches".
• that diesel users are being left out.
• that changes in oil prices are going to drown out whatever tax policy response you choose to make, and that voters understand that this is the case.

The billboard below kind of sums it up.

Comments

[tim barclay]

Match it then Labour. GST is not a red herring but it has enabled the Labour Governemnt to profit from the wholesale price increases. The GST component has gone up from 11c/litre to 17c/litre i.e. a 6 cent profit. There is no harm is suspending the 5 c Auckland tax in these circumstances until the tax cuts kick in. You can be sure about one thing a Labour Government lead by Helen Clark will never ever reduce taxes no matter the circumstances.

[PaulC]

Tim - you obviously don't have to file monthly GST for your business - can you imagine what a pain it would be to deal with a petrol GST that was different from all the other GST rates you have to deal with? at the moment it's easy - type in what you receive, subtract what you pay out, divide by 9 - at the moment it's easier for me to deal with than PAYE. Brash has obviously never run a small business and hasn't really thought this though

[Greg Stephens]

This reeks of desperation.
Brash knows he is going down in the polls, and is seeking to flipflop his way back up.

[PaulC]

Ignore what I just said - I misunderstood how the tax was being changed.

[tim barclay]

There is no adjustment in GST. AS I understand it they are suspeding the 5c Auckland levy which is being collected through increased GST receipts. That is the logic of the AA case which appears to have been accepted by Brash/Keys.

[PaulC]

so this is a bribe just for people in Auckland? rather than doing the user-pays approach of charging the Aucklanders for their motorway upgrade the Nats are making us all pay .... how wonderfully ... um .... Socialist

[James]

The Lefts hatred for the poor and disadvantaged is shown in their scornful digs at National for attemping to ease the plight of the downtrodden.Oh the humanity! ;-0

[Insolent Prick]

Two words, Jordan:

"EAT SHIT!"

[Aj]

Tim:
"Match it then Labour"

I hope Labour don't.

It is an unprincipled National Party bribe, coming after weeks of statements says they would not cut this tax.
I see prices have fallen 2c today anyway.

[Greg Stephens]

wow, intellectual argument there from IP. Almost enough to make me vote National...

(sarcasm to those who can't tell)

[Aj]

IP,

What a witty comment. I wish I'd thought of it first.

[Insolent Prick]

Ah, Aj. Unlike the thoroughly principled Labour Party non-bribe just weeks after the stingiest budget in fifty years, when the Treasurer said there was "no money for tax cuts", only to then start throwing away billions of dollars left, left, and centre-left?

Every New Zealander benefits from lower excise tax: anybody who buys gas at the pump, or purchases any goods or services with a transport cost component.

You're just cranky because the pinko commies didn't think of it first.

[Aj]

I'm not cranky. I'm in a bloody good mood at the moment.

Try this for a judgement about the 'pinko commies' running this country:

Cato Releases Ninth Annual Ranking of Economic Freedom.
This year’s report notes that economic freedom remains on the rise. The average economic freedom score rose from 5.2 (out of 10) in 1985 to 6.4 in the most recent year for which data are available. “Of the 109 nations with scores in 1985 and which are included in the most recent index, 96 recorded improvement in their economic freedom score, seven saw a decline, and six registered changes of under 0.1 points,” commented the report’s co-author, Robert Lawson, Professor of Economics at Capital University, Ohio.

Hong Kong retains the highest rating for economic freedom, 8.7 of 10, closely followed by Singapore at 8.5. New Zealand, Switzerland, and the United States tied for third with ratings of 8.2. The United Kingdom, Canada, and Ireland ranked sixth, seventh, and eighth, respectively. Australia, Estonia, Luxembourg, and the United Arab Emirates tied for ninth.

Promoting public policy based on individual liberty, limited government,
free markets and peaceful international relations.

Read it and weep, lad.

[Aj]

Sorry guys if I have to keep repeating my self :-)

Some things just don't sink into the righties minds. Especially if facts and assessments don't agree with their pre-conceived view of the world.

See even Don has trouble finding any stats or reviews that agree with his oft-stated speeches that tell us the country is going to hell in a hand basket.

[ishy]

IP... you sound like a HP commercial...buy now...PAY LATER
got ta face the music some time mate...you want to believe it's not gonna keep on keepin on..
sweet as mate ive got a bike. My folks have a V8 who's happier

[Craig]

Rediculous. I can't believe they pulled this one out - and now. Doing their maths, if you use 40 litres of petrol a week, you'll save $72 over the course of six months.

I can't wait 'till April when National puts the tax back, raising petrol prices from $1.70 to $1.75. Show me a report that suggests petrol prices will fall in the future at all.

[ishy]

and AJ i don't get it you've lost me
what is 'economic freedom'.
In the last 20 years the 'New Right' has reduced the purchasing power parity for the bottom 80% or so, and a similar economic system in the US has made that one stagnant though i'm sure they've recorded growth...for whom
My point is by elaborating on a point like that you only support the foundations of the Right. While 'free markets' might return growth in productivity it also returns ignorance of how the social system of a successful society works that supports itself, with limited interdepence...
you sorta sounded like you agreed with him, the rights had far more more access to those communities then the Left.
Economic freedom is merely the right you have on a labour market, as if all of life could be seperated into different markets..in such a case the Right see the humanitarian market that supports uplifting all citizens rather then a few and the livelihood insurance market are all feeding the economic freedom market

[Insolent Prick]

Funny you should be quoting the Cato Institute, Aj. You won't find a single article there advocating greater income redistribution as a means of achieving economic prosperity.

The OECD has clearly stated, time and time again, that New Zealand's economic performance has improved as a result of structural reforms of the 1980s and the 1990s--the very economic reforms that the Left would prefer not to talk about.

The obstacles to further growth that the OECD identifies are further areas the Left would prefer not to discuss: getting beneficiaries into work, higher levels of useful skills training (i.e., NOT the wananga), and better quality public expenditure.

The Government takes sixteen billion more off the taxpayer this year than in 1999. To show for it, we've got longer waiting lists at hospitals, a secondary school performance system in tatters, and a ballooning of low-quality tertiary courses.

More tax doesn't achieve greater outcomes from the public sector. It merely cushions waste.

Anything that Don Brash does that corrects the massive waste of public expenditure currently taking place is a good step.

[Craig Ranapia]

*yawn* I am enjoying watching the Labour Party and its apologists pontificate on fiscal problity and policy written on a cheque stub. Almost as amusing as imagining Britney Spears sermonising on modesty and the sanctity of marriage.

[Aj]

Cut it up anyway you like, guys :-)

3rd only to those decaying socialist entities, Singapore & Hong Kong.

[tim barclay]

I see TVOne have caught out Hon Philip Field influencing immigration decisions for his contracter. Go Labour. The cleanest greenest meanest Government there has ever been in the whole wide world. Yummmmmy. Gawd it was funny to see Helen Clark go on about the petrol tax reduction. She should have criticised herself on the free money for students. All her criticisms could apply to that. It was soooo funny to watch. And she did it with a slight smirk as well.

[Aj]

ishy,

But see how the righties bite. They rant on about how this govt stifles economic freedom and advocates welfare for all.
The current government shows that a strong commitment to social justice can be delivered as well as allowing market forces a high degree of freedom. And they don't like it.

[tim barclay]

Social justice Aj??? All those people on waiting lists including the 1,000 people Annette King has watched die on health waiting lists.(She wants them reclassified as change in circumstatnces- presumable not necessarily to their advantage). The 12,000 they have in their housing queues and the extisting tenants have Labour eviction notices sent to them. One of their MPs approves of a religion that wants to stone gays to death. They believe in killing babies through abortions as a human right.

[GeniusNZ]

> It is an unprincipled National Party bribe

face it - NZ voters LIKE bribes.
Better yet people over react to petrol
Note how they complain a lot and will probably waste more money driving to the next petrol station than they actuall save there.
this translates into more bang for your bribery buck.

[rightkiwi]

jordan - the 1 oct introduction date is not a problem. the outgoing govt is constitutionally bound to follow the advice of the incoming govt.

[Greg Stephens]

The government can't act on any matters of supply (i.e. taxation) without the consent of Parliament. To lower that tax, they would need Parliament to sit!
Not enough time!!!!

[sagenz]

wrong greg, it would be a change to a schedule that is enabled by the tax law. equivalent to a change in regulation and only needs a decision of the executive. how beautiful would it be for helengrads last act to be to cut taxes.

[tim barclay]

Brash can do the Order in Council immediatley on assuming office. If that is after 1 October then it is Labour's fault for not facilitating things. I would be prepared to ram this down Labour's throat and make them choke on it.

[Greg Stephens]

well, you don't lead the National party do you now?

There is also coalition negotiations to take place. So it maybe a while before Brash can bed Winston.

Anyway, what's the point of arguing about this when it is clear as daylight that National will lose the election?

[Jim D]

"Rediculous. I can't believe they pulled this one out - and now. Doing their maths, if you use 40 litres of petrol a week, you'll save $72 over the course of six months."

You don't get it.

Do you know how goods get to a supermarket? Do you know what happens to prices of goods when it costs more to transport the goods to a supermarket?

Hopefully you can work that out by yourself.

[JW]

Greg, Good points - was about to make them myself.

The only thing Don Brash will be doing is assuming his seat in the opposition benches.

Oh, and packing up his Leaders Office to move to where the backbenchers hangout.

[Greg Stephens]

I'm sure Brash could get a cushy job in some third world country on how to run their economy into the ground for the good of capitalism.

I wonder who will be remembered as the worse leader - Bill '20.93%' English or Don 'Division and Anger' Brash?

[Jim D]

Sounds like you guys are worried :) Very encouraging.

[Greg Stephens]

Worried?

No, if I was worried I would be making speeches on loudspeakers throughout town at the moment. But rather I'm sitting at home on my laptop scanning the net

[Aj]

Craig,

"You won't find a single article there advocating greater income redistribution as a means of achieving economic prosperity."

Thats ok. I'm not concerned about policies they advocate so much as results of studies. Although I find their approach interesting

"The OECD has clearly stated, time and time again, that New Zealand's economic performance has improved as a result of structural reforms of the 1980s and the 1990s--the very economic reforms that the Left would prefer not to talk about"

They do talk about them, and accept that some of them were needed.

"The obstacles to further growth that the OECD identifies are further areas the Left would prefer not to discuss: getting beneficiaries into work"

Lowest unemployment in the OECD

"higher levels of useful skills training (i.e., NOT the wananga)"

If we're gonna hip-hop then we've gotta do it properly !

"and better quality public expenditure."

A goal that governments of all colours strive for

"The Government takes sixteen billion more off the taxpayer this year than in 1999"

And less as a % of GDP, sure a greater $ number but look at the rebuild of infrastructure that's had to take place

"To show for it, we've got longer waiting lists at hospitals,"

A result mainly of a higher demand for health care, aging population, and differing assessment methods.

"a secondary school performance system in tatters"

Instituted by National who say they won't change it.
The system was sooooo bad that both my kids went thru these processes and they are now costing me a fortune studying architecture and law.

"and a ballooning of low-quality tertiary courses."

I love twilight golf.

"More tax doesn't achieve greater outcomes from the public sector. It merely cushions waste"

does not NECESSARILY acheive greater outcomes..
Just like the private sector.

"Anything that Don Brash does that corrects the massive waste of public expenditure currently taking place is a good step"

Graeme Scott feels that it will only be possible to take a scapel to expenditure, rather than an axe. But Don might have the ACT/BRT agenda on his mind.
We'll find on Saturday if this latest madness {fuel tax bribe} does the trick. I must say, it does smack of desperation.

[Pete]

whats this crap about it keeping transportation costs down (specifically supermarket has been mentioned here)?
The costs wont be any different, as supermarket goods are transported by truck, and turcks use diesel and there has been no change to the GST on diesel

[Chris]

Greg, you're a smart guy, why do you persist in pulling stuff out of your ass?

For example

1. "Anyway, what's the point of arguing about this when it is clear as daylight that National will lose the election?"

Clear as day light where? All those polls that show the Nats ahead and big swings in constituency seats to National?

2. "I wonder who will be remembered as the worse leader - Bill '20.93%' English or Don 'Division and Anger' Brash?"

Well, probably the man who doubled National's support in about a year, revitalised the party and almost/did win an election.

3. "No, if I was worried I would be making speeches on loudspeakers throughout town at the moment. But rather I'm sitting at home on my laptop scanning the net"

I don't think that would help man, seriously.

[Greg Stephens]

for fun Chris, I think.
Maybe I should get a car and yell out "Party vote National" at 2am, now that may help.

[Greg Stephens]

and for point 1, see Centrebet's odds
Labour $1.40
National $2.70

EBgate (or whatever it is called) alongside desperate moves on oil prices, is going to cause National to fall, and they lack coalition partners.

[Chris]

That is damn good money on National.I might go and put some money on.

Well lets see if the EB thing is as big as you all say it is. Also please don't tellme the oil price move won't be popular.

They don't lack coalition partners at all!

[Mike]

$100m for something that will last only last 6 months, and only provided 5c relief, thats very steep indeed.

This is just another flip-flop by Don.

[Tiberias]

Has someone thought about a Tim Barclay wind up toy? All you'd need is a randon number generator, a speech chip and a wireless connection to the National Party Talking Points RSS feed.

But seriously, National's excuse for this bribe (the GST thing) was fairly solidly debunked while they were "thinking about it", so Key and Brash *knew* that the "GST profiteering" angle was complete BS when they announced this policy. Just another example of a desperately duplicitious National party and their desperately hypocritical partisans.

Anyone who still believes the govt is somehow profiting from the high petrol prices should read this:

http://www.scoop.co.nz/stories/PA0509/S00302.htm

and perhaps think whether effectively borrowing another $100m+ from the future to help buy this election is an acceptable course of action for a supposedly conservative party.

[sagenz]

tiberias - according to that report "everyone is on a fixed income". so if gst increases, gst on other things will decrease is the logic. Now I understand Cullens tax logic.

when peoples incomes rise cullen can increase their tax so their income is fixed. under national people might have some discretionary income. not everything is spent on items subject to gst. so that report is rubbish

[Tiberias]

Having said that, it is a good strategy for them. Not because it was honest, but because it will distract people from thinking about all the other dishonest things Brash and National have done. Expect more of this sort of thing.

[tim barclay]

Tiberious I do not read left wing garbage. The Government is profiteering. People run down their savings, increase their debt before making any significant changes in their driving habits. Has the Goverment produced any figures to say that the increase in petrol has resulted in a corresponding saving in other expenditure thereby making it revenue neutral. They have not. In any event the GST has gone UP by 6 cents putting further pressure on prices. It is right and fair the Government should reduce its profiteering.

[weizguy]

tim

"I do not read left wing garbage."

No. You put your fingers in your ears and repeat "la la la la the market will provide."

[Peter McK]

I was talking to a friend who is a staunch labour supporter last week - he advised that he thought labour would do exactly the same thing this week - he is now annoyed for two reasons
1. National stole the thunder from labour who now look miserable because they can't make any releif available
2. It drives home the message that National will only take as much tax as they need to run the country - while labour will take as much tax as they possibly can.

Did anyone think Cullen was going to explode on TV this morning - the man must be under a lot of pressure - I suppose I would be to if I was going to lose my job on saturday.

[Leftbane (TM)]

Hahaha! We just won the election! Because we have philosophically cornered Helen Davis into a position where she cannot respond!!!!!!!

And the winners? Everyone! We will all have extra money in our pocket after having our tax on fuel temporarily reduced!

Why not reduce it even further and fund for it by streamlining public transport? Instead of wasting it by running all day, perhaps the Auckland and Wellington suburban rail systems should run only on weekday peak times. And shut down the Melling and Johnsonville lines. They are a joke.

[Tiberias]

I see Tim, you don't read treasury reports from the parliamentary library because they're "left wing garbage". Do you actually read _anything_ other than the spin feed from your party? You seem to be incapable of independent thought. If you didn't make so many spelling mistakes I'd accuse you of being a bot :-)

And SageNZ, I wouldn't go applying for a job in Treasury if you can't interpret their reports. Treasury being one of those horrid left wing institutions I'm sure you think you wouldn't have a chance anyway.

I think the public will manage to see this for what it is, a pittance thats not going to make much difference, but the fact that it gets your bigger dishonesty issues off the front of the agenda is huge for you, so I understand why you had to do it. I just hope the public realises what you're up to.

[Archon]

Heh. I read the title of this post and thought that you were blogging about Taito Field.

Silly me.