Saturday, June 07, 2008

So United Future joins the tax cut game

As a party polling at the same level as Libertarianz, Peter Dunne has to be thinking whether he risks being a one man band after the next election. Don't forget that is exactly what he was after the 1996 election (when none of the Labour and National MPs who defected to what was then United held onto their seats), and the 1999 election when Libertarianz party vote beat United in a number of seats. He doesn't want to go back to that.

So United Future has launched its tax policy, which David Farrar describes. On the face of it he is offering a step forward. Three tax rates, of 10, 20 and 30%. It's far more radical than Labour, and I think more radical than NATIONAL would consider. After all it gets rid of the 39% tax rate, something National has been too scared to talk about because it doesn't have the courage or intellectual robustness to fight it (even though it opposed it in the first place). Give him credit, he has announced a comprehensive policy. ACT has announced half a policy (get rid of 39% and have a tax free threshold), National none.

However, for that you might ask Peter Dunne a few questions:
  1. You're the Minister of Revenue. You have kept the current government in power for two terms, indeed you are PART of it. If you have such a radical approach to tax, why haven't you withdrawn providing confidence and supply and helped initiate an early election? (of course the Greens would probably step in). Do you like having it both ways or is the only policy that matters the completely wasteful Families Commission?
  2. Would you achieve this with spending cuts? If so, where, given you are responsible for creating an obvious bureaucracy to abolish.
  3. Given you're meant to be a party in the centre, should we expect you'll only back National if it implements a version of you're moderately worthwhile tax cuts? If not, why not?

Most importantly, a vote for United Future in 2002 and 2005 proved to be a vote for keeping Labour in power. In 2002 many opponents to Labour voted United Future to give Labour an alternative coalition partner to the Greens. In 2005, half of those voters returned to National because it had a chance of winning.

In 2008, you might wonder why anyone who wants a change of government would bother casting a party vote for a party that has helped kept Helen Clark in power for two out of her three terms, and whose most well known achievement has been creating a useless bureaucracy. The people of Ohariu-Belmont might also ask what he has done for them. I certainly don't know.


Anonymous said...

something National has been too scared to talk about because it doesn't have the courage or intellectual robustness to fight it

I could be completely jaundiced and say that the reason the Nats have not released any tax policy is to try and stop the 'me too' brigade from plagiarising their policy.

Now this has forecd the completely cynical and self-serving politicians like Dunne to try and guess Nats policy in coming out with theirs.

I am continually amazed at the baseness (if there is such a word) of politicians. As you say, this worm has been at the centre of the tax and spend regime of Labour and has kept them in power for 6 years. And people still vote for him! (and Winnie! and the Greens!)

ZenTiger said...

I agree with your points. I wonder at the full motive for this policy declaration, without the corresponding discussion on how to grow the cake, or shrink the entree (the government, who always eats before we get to see what's for dinner).

On one hand, he could be declaring support for a National Party, by signaling he too wants to provide "better tax cuts than labour" and therefore, they can count on his support (so don't run a strong National candidate in my electorate please).

On the other hand, he may be part of Labour's test case for seeing how the public react to something closer to a National Party Policy. This will give them a means to gauge opinion and counter-strategy, and leaves the door open for Labour to say they "would strongly consider" input from the Minister of Revenue to see where they could provide some accommodation of these targets, thus giving Labour the opportunity to convince Dunne supporters they will get a small National-like adjustment if only Dunne stays firm.

Either way, it's the voters who are being manipulated here. I like the basic ideas he has put forward - moving to a simpler, smaller, flatter tax is a good thing. But the package is void of the additional detail needed to convince me that Dunne understands how to generate growth, instead of tax cuts for the sake of votes - something that is not in the voter's interests as we will pay for them in other ways.

ZenTiger said... clarify - tax cuts in themselves may not be good when delivered by a socialist leaning government - they never mean to let them last, they resent doing it, so quickly add taxes in other areas and don't understand the need to ensure growth strategies contain inflation, and that government spending is reigned in.

and that is my worry (but to a lesser degree) with National. Tax cuts in themselves is not a solution - they need to be part of an integrated policy platform that would likely be more controversial (radical to centre-left NZ) to help us build NZ's economic strength.

And having a good economic base to work from gives us the luxury of affording costly environmental and social policy that needn't be as dogmatic as typical socialist mantra.


Anonymous said...

Peter Dumb, the fiscal transsexual!