Cullen really is still taxing you more

So after accusing the Nats of wanting to borrow to pay for tax cuts, that’s what Dr Cullen is doing. Going into deficit to give modest tax cuts that STILL mean more tax is collected per person in real terms than was the case than when Labour was elected.

You see, if Dr Cullen had merely spent more to compensate for inflation since he held the Treasury reins, he would have increased spending by only 24.7% according to the Reserve Bank’s own inflation calculator. Now I know it’s a Labour government, you could say, well maybe he could have increased it by double that. No, government spending has increased by four times the amount necessary to make up for inflation since 1999.

So Dr Cullen has introduced a new bottom tax rate (for up to $14,000) of 12.5% (to please his supporters). A drop from 15% (after the low income rebate).

The raising of the 33% threshold from $38,000 to $40,000 is well under the rate of inflation since 1999. Had he inflation adjusted it, the new threshold would $48,000. The 39% threshold adjustment from $60,000 to $70,000 is also below inflation since the rate was introduced in 2000. The new threshold should be $74,000. So Dr Cullen is still taxing those people more than they were in 2000.

So why? What's the pork? Well the long list is in Dr Cullen's speech here, but here's quite a bit of it:

# Middle class welfare hiked up in the form of Working for Families (looking at National pointing at it to find something to get rid of in exchange for tax cuts). Recycling tax money so thousands of families are grateful they get “given something” from the state that was taken from many of them in the first place. Truly vile stuff.

# More subsidies so people in rural areas (who Telecom is forced to charge below cost for telephone line rental) can get broadband that they would otherwise get if they lived in cities (yet somehow people in cities don’t get the cheap rent, free parking and uncongested roads in return).

# More money to reduce class sizes, but nothing to link performance of the teachers to what they are paid (you can’t you see, because the teachers’ unions support the Labour party and are hard working people who work equally as brilliantly and nobody knows what a bad teacher is like).

# More subsidies for home owners and landlords to increase their property values by installing insulation and clean heating (South Island vote presumably).

# Rail pork, Dr Cullen wants to build the Marsden Point port branchline, a line that the profitable port company wont pay for (even though it apparently is wonderful for it) and which economic appraisal says is not worth the cost. He is Think Big man for rail, wanting a multi billion dollar underground rail link, a rail link to Auckland airport (even though most airport trips don’t start or end anywhere near the city) and one to the North Shore (even though that doesn’t stack up either), admittedly over 20 years. Of course it is a bit too much to expect users to pay even half the cost of that.

# Continuing the $30 million a year Jim Anderton transport pork for Gisborne/East Cape and Northland, essentially subsidising the roads used by forestry trucks (because charging them like is done overseas is clearly out of the question). Jim Anderton promised that forestry would generate jobs galore in those regions, although the share of the vote his party gets there doesn’t show they are grateful. Gisborne/Hawke’s Bay still has the highest rate of unemployment, so that’s worked a treat clearly.

# $27.8 million to the people living the dream of TV programme making with a Screen Production Initiative Fund (wonder why they can’t just borrow or spend their own money on filmmaking, I mean it’s such a difficult and gruelling profession). I’ve mentioned before how that lot are hand in glove with Labour.

# More money for the Ministry of Pacific Island Affairs, which of course does education, healthcare, immigration… oh no that’s right, it produces nothing but bureaucracy.

# $10.9 million so state radio can keep operating supporting statism . You be the judge as to whether a wide range of views on the budget and the role of the state get broadcast on it.

# $72 million to bribe the Winston vote elderly by giving them free off-peak public transport use.

But I'm not surprised. This is after all a Labour government, it believes in growing the state and in Nanny State. A tick for Labour is a tick for more government, all Dr Cullen has done is reduced how much he has increased the real tax take in future years. A tax cut? Hardly.