My budget wishlist

With Dr Cullen ruling out tax cuts according to the NZ Herald, I thought I'd have a go at a budget wishlist. It wont happen, yet, but it covers a few key topics that were worth mentioning. It is more modest than a Libertarianz budget, but bolder than an ACT one I think:

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1. Cut income tax immediately by abolishing the 39% income tax rate, cut the 33% rate to 30% and the 21% rate to 20% and introduce a $5000 tax free threshold. Cut company tax to 30% immediately. Announce further tax cuts, including abolishing the top rate (introducing flat tax of 20%) next year, with a corresponding cut in company tax to 20%, and introduction of a $10,000 tax free threshold in the following year (and abolition of the low income tax rebate). By 2008 company and income tax at a flat 20% with first $10,000 tax free.

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2. Cut GST to 10% (simplifies it and gives some inflationary relief);

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3. Implement the first stage of welfare reform by:
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- Capping money provided to existing beneficiaries by granting no additional payments for having additional children while on benefits;
- Ending inflation adjustment of benefits including accommodation supplement (excluding war veterans and national superannuation);
- Ending DBP payments for parents where the youngest child is 5 or older, replaced with unemployment benefit. Additional children will not make parent eligible for DBP again;
- Introduce one-year maximum term for claiming unemployment benefit, after one year the benefit ceases. Unemployment benefit cannot be claimed again until recipient has at least paid in income tax what had been previously received in benefits;
- Abolish unemployment benefit for under 20 year olds at home and abolish the independent youth benefit, raises minimum age for all benefits to 18;

- Abolish schemes for benefits for artists;
- Abolishing Working for Families package of tax credits (replaced with tax cuts);
- Sell all empty state housing stock (current and as it becomes available), cease funding new state housing stock (sell any currently under construction).

Abolishing Labour's welfare profligacy and tightening up on current beneficiaries

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Announce the second stage of welfare reform by:
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- Abolition of new claims for widow’s benefit, domestic purposes benefit, accommodation supplement, sickness and unemployment benefit when the tax free threshold is raised to $10,000 (to give people time to acquire life insurance, income protection insurance and enter into contractual agreements in the event of family separation). This effectively gives the population two years to make plans for predictable eventualities (unemployment, death, sickness). Ceases the entrance of new beneficiaries into the system so that it erodes over time as current beneficiaries are weaned off;

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4. Announce comprehensive reform of ACC by immediately opening it up to competition for its employer and motor vehicle accounts. 75% of motor vehicle licensing fees to be abolished, replaced with private motor vehicle accident insurance. Competition for non-work/road injury cover to be introduced within three years, followed by privatisation of ACC;

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5. Recommence privatisation programme, selling SOEs subject to competition on the open market, with proceeds used to accelerate debt repayment, some SOEs to have shares partly allocated to the public (e.g. Radio NZ) so that public ownership is genuine public ownership;

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6. Require all government departments, Crown entities and Crown agents to prepare a report of no more than 20 pages as to why they should still exist rather than their functions either be abolished, or operated in the private sector and publish it for public comment. Departments with inadequate reports will be abolished, others will be scaled back or privatised subject to passage of necessary legislation. Ministry of Pacific Island Affairs, Human Rights Commission, Children’s Commissioner, Health and Disability Commissioner, Families Commission, NZ on Air, Electricity Commission and Ministry of Women’s Affairs abolished regardless;

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7. Cease funding of the arts, sport and broadcast media, including NZ On Air and TVNZ. Radio NZ funding to be abolished when privatisation complete;

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8. Cease contributions to the Cullen fund, replaced with debt repayments (which will better secure the long term future). Announce first stage of reform of national superannuation that will see contributions to the Cullen fund privatised and placed in the name of all current citizens not receiving National Superannuation. Citizens will be able to continue contributing, cease contributing or remove contributions to reinvest elsewhere;

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9. Abolish import tariffs;

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10. Cease direct Crown funding of roads, replace with full dedication of petrol tax to National Land Transport Fund - announce Transit NZ to become SOE and be privatised by issuing of shares to all citizens.

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See modest really - just phasing out welfare, flat tax and hardly touching health and education beyond given the state run providers independence. It would be too long for this blog to mention all that, and besides, the biggest leap forward would be to cut welfare dependency. Is this too much to ask for if there is a Brash/Hide government?

Nanny teaches you about spending your own money

Now I hope all you boys and girls are listening ok? Good. Now I know you’ve been complaining about the price of petrol, because those big bad men in those evil overseas oil companies (class go booooooo!!) have been putting up the prices so you can’t drive so cheaply anymore. Now I know that’s so not fair, so what we have done – Nanny State – is take a little more money off you all to pay for a website to teach you how to use less petrol when you drive. You see, no consumer based organisation would do this when we can use your money to pay for it.

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So class go here

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Click the pretty hybrid car, yes those expensive ones that use half the petrol of conventional petrol cars and you can look up your own car and see the average fuel consumption. Something you could get from the manufacturer, but we put them all in one convenient place just for you.
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Now click the distance, and you’ll see the more you drive, the more fuel you use. Bet you didn’t know that did you? The more you drive in town or at residential street speeds the more fuel per kilometre, and the more you drive on the open road, the less.
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Now click habits, this is where I really come in. Do you have your car tuned? Do you have your tyres correctly inflated? Do you drive moderate and smooth or fast? Do you use air conditioning or open the window? Well you should know the right answers to those – and you’re naughty if you use air conditioning too much (see here) or drive at 110 km/h…. you bad bad bad driver you, using up more fuel and killing children by the day.
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So, go to Nanny’s website, it only covers new cars and Japanese used imports – so most of you will find it useless unless your buying one of them or own one – and see how you could spend less on a commodity you buy.
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Nanny next will do this for shoes, shirts, electricity, fruit, bread, eggs and all the other things you don’t know how to spend your money on properly. You see Nanny takes a lot of your money to tell you how incompetent you are at spending the rest. (question: why does Nanny tax petrol so much?) Detention! Don't be so rude as to question the need to penalise your addiction to petroleum, haven't you had your environmental lesson today? It is one thing your petrol societal fee pays for. (question: Why doesn't Nanny make more petrol for us so the price can come down?) Nanny doesn't make petrol, Nanny makes websites and documents and laws to tell you to better yourself. Don't be so stupid. (question: Where does petrol come from?) Those evil big companies, it's all because of them that you can run cars, that addiction you all need weaning off of. Thing were better when you walked everywhere (loads of hands go up) No more questions!

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(waking up kicking nanny out of the way) As for me, I thought I’d check out a good car, not a pissy child racer one - the Aston Martin DB9, and it would use 16.6 litres per 100km – bargain for such a beautiful machine, don't ask the price because if you care, you can't afford it. It's a V12, so if 3 pathetic little 4 cylinder car owning Labour voters can get on buses or trains, then me driving it is carbon neutral :) and there would be less congestion.

Nanny State tries to tell Scots to eat well

Scotland has a problem – most of the population eat like they did half a century ago. If it’s deep fried, involves meat and potatoes, or pastry – it’s good. Fruit and vegetables are for English poofters. As a result, half of them are dead by 60, or near abouts.
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NannyKnowsBest blogs on a proposal by the Scottish Executive to requires pubs, as a condition of their liquor licences, promote “sensible eating”. What this means is unclear, on the one hand it could mean that pub food starts to disappear as the locals go to the fish and chip shop first, it could also mean that lardy pies are sold with side salad as compulsory. If it means telling a corpulent Glaswegian lad he ought to have a green salad and apple, instead of a pork pie and deep fried mars bar, it would be an interesting scene “Ah you sayin’ I’m fat laddie, I’ll geyya a smack in the chops ya cheeky sod, gimme ma pie and mars bar ya feckin
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Just don’t tell the NZ Health fascists, they don’t believe anyone should be responsible for their own failure to look after themselves.

Rodney back to flat tax?

Rodney Hide continues on a roll of more libertarian ACT policies by saying in a press release:

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"If ACT was writing this year's budget, it would include moves towards a flat tax and a Taxpayer Bill of Rights. A low, flat tax would boost productivity and growth, as well as benefiting Kiwi workers, businesses and communities."

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"Moves toward" weakens it a bit, but it would be nice if ACT went back to its 1996 election policy of a low flat tax (19.5% I recall?). This would be fairer, as there is no way that those on higher incomes consumer ever higher proportions of government services. Abolishing the 39% and 33% rates and cutting the 24% rate to 19.5% would be a great advance in freeing up New Zealanders to enjoy their own wealth, to look after themselves and encourage more skilled people to stay in New Zealand and immigrate there.

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Andrew Falloon is cheering it on, as he should. Not only is it more moral than the status quo and would be a great boost to the economy, but is easy to sell. The more you earn, the more you keep without nanny state looking to confiscate ever greater proportions of your income. The Nats should, in response, be talking about eliminating the top rate of income tax, which is a small step in the same direction (and taking us back to 1999 before Labour introduced it).

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Of course, eliminating the 39% rate and introducing a flat tax are great leaps forward, but not the end game :)

Aussies get tax cuts

It's not much but better than nothing.

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The Australian Federal government is full of pork, subsidies, welfare for middle class parents (sounds familiar?) and special grants for everything from Tasmania to subsidies for airlines to remote locations. In spite of this nonsense, the Sydney Morning Herald reports Treasurer Peter Costello announced some meagre tax cuts in the Aussie budget last night because the Federal Government is now virtually debt free, meaning it spends nothing on interest payments, so needs to collect less taxes.

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The tax cuts are meagre:

Top rate of 47% down to 45% with the threshold raised to A$150,001

Second rate of 42% down to 40% with the threshold raised to A$75,001

30% rate remains, threshold raised to A$25,001

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Plus a cut in fringe benefits tax and increases in low income tax rebates that mean some pay no income tax on the first A$10,000.

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The leftwing blogosphere bemoans tax cuts to the rich (yawn), those people whose money it was in the first place. Jordan Carter in his Orwellian newspeak claims that it is money taken from the poor to pay the rich - what screwed up world does he inhabit?

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Simple lesson to socialists:

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People on high incomes make those incomes from work or investment that they undertake with their own time, effort, brains and money. It is THEIR money before the beloved bosom of nanny state gets her craggly claws on it. Letting them keep an additional 2% of it is about taking LESS from people who MAKE money. The poor don't pay for the running of the state, in most cases they are net recipients or free riders.

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Why?

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Well let all the wealthy Australians earning more than $A75,000 leave and then the poor can get "their money back", and then watch them struggle to find doctors, lawyers, architects, airlines, food or indeed most of the things that business brings them.

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As Costello said, last year rates for lower income Australians were cut, now top rates are being cut and those that get more back do so because they pay more tax.

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From a libertarian perspective it is pathetic, although a small step in the right direction and more than Labour in NZ (or the UK) has done. If the fat in the Australian Federal Government was trimmed then Aussie would gain enormously by cutting rates a lot further and from the efficiencies of abolishing subsidies that prop up inefficient activities and regions. For example, A$1 billion is being pumped into the ABC and SBS to convert the TV channels to digital over ten years - why don't the viewers pay? A big hand out for breeders as well.

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However, as long as Aussie rides on the back of high mineral prices, it has no incentive to seriously reform further.

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Don Brash is saying this will see more kiwis going to Aussie to earn more money with lower taxes, it certainly wont discourage them!