What will happen to National now?

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5885 posts

Uber Geek

#3081221 30-May-2023 07:22

tdgeek:

Back to tax cuts. Can NZ afford them? Analogise it to the home budget. If the budget incurs another cost, then spending on something else has to be reduced. In many ways the Govt budget is similar to a low income family budget. Except the family can work more hours for more income, the Govt cannot. #rockandahardplace

The government tax take has exploded in recent years, in many ways thanks to the inflation it both wants Kiwis to cope with and yet to be able to collect the extra revenue from the higher GST spend required to maintain a standard of living, and also by clawing back real wage increases by not indexing the tax brackets.

If the government wants even more that the huge increases in tax revenue it already has because it's still somehow not capable of providing core public services like healthcare, education or law and order, then it's clear that no increase would ever actually be enough. The amount of tax collected isn't the problem. They could collect 100% from household and deliver crappy outcomes if they're not capable of delivering better ones. No amount of tax revenue increases will make incompetent people competent.

Low income household generally do not have the power to raise income through the threat of imprisonment and that power gives the government some pretty hefty obligations when it comes to fairly maintaining the tax system. It has cynically abused that power for its own political benefit.

tdgeek

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#3081228 30-May-2023 07:46

GV27:

The government tax take has exploded in recent years, in many ways thanks to the inflation it both wants Kiwis to cope with and yet to be able to collect the extra revenue from the higher GST spend required to maintain a standard of living, and also by clawing back real wage increases by not indexing the tax brackets.

If the government wants even more that the huge increases in tax revenue it already has because it's still somehow not capable of providing core public services like healthcare, education or law and order, then it's clear that no increase would ever actually be enough. The amount of tax collected isn't the problem. They could collect 100% from household and deliver crappy outcomes if they're not capable of delivering better ones. No amount of tax revenue increases will make incompetent people competent.

Low income household generally do not have the power to raise income through the threat of imprisonment and that power gives the government some pretty hefty obligations when it comes to fairly maintaining the tax system. It has cynically abused that power for its own political benefit.

Exploded? High wage inflation is a recent issue, not recent years. Tax has been aided by low unemployment. Not exploded, or huge, but certainly there.

I assume you are referring to the current Government, in fact what you said refers to all past governments, there is not enough funds to do everything. Past decades we have not done what's needed to be done, and what little has been done has actually been funded by not spending on those sectors. "why haven't we re roofed the house? We used that money to fix the plumbing, but that's only 1/4 done too
That's NZ in a nutshell.

Resourceful low income people can seek part time work, seek overtime. Imprisonment??

In my view, its not a case of lack of delivery on those often quoted sectors, its a lack of funding. What will voters forego in order to spend up on those sectors? Not much I'd say, generally its all about me.

GV27

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#3081256 30-May-2023 08:56

tdgeek:

In my view, its not a case of lack of delivery on those often quoted sectors, its a lack of funding. What will voters forego in order to spend up on those sectors? Not much I'd say, generally its all about me.

Given the government is already increasing taxes by consciously deciding to not adjust thresholds, nor has it promoted any sense of accountability at the Reserve Bank for their appalling decisions during the Covid recovery period, I can't exactly blame people for starting to have a sense of humour failure about it.

Like I say, the question has to be asked at some point: How much tax revenue is enough, given the huge increases in basic living costs the general population are facing, when the wage increases they get to cope with it are being taxed on a non-adjusted basis?

If the government cannot be trusted to competently administer the tax system, then they should lose that power and those thresholds should change automatically.

sir1963

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#3081261 30-May-2023 09:07

GV27:

tdgeek:

In my view, its not a case of lack of delivery on those often quoted sectors, its a lack of funding. What will voters forego in order to spend up on those sectors? Not much I'd say, generally its all about me.

Given the government is already increasing taxes by consciously deciding to not adjust thresholds, nor has it promoted any sense of accountability at the Reserve Bank for their appalling decisions during the Covid recovery period, I can't exactly blame people for starting to have a sense of humour failure about it.

Like I say, the question has to be asked at some point: How much tax revenue is enough, given the huge increases in basic living costs the general population are facing, when the wage increases they get to cope with it are being taxed on a non-adjusted basis?

If the government cannot be trusted to competently administer the tax system, then they should lose that power and those thresholds should change automatically.

OR remove stuff they pay for

Free early child education/childcare

Free under 14 Doctors visits

Free 1st year university

Apprenticeships funding

etc etc.

It's not like people are not getting anything extra for that extra money

I have argued against the "Block of cheese" tax reductions every time

We are at the stage where funding cuts are simply being made where it will to cause an instant fuss among voters

eg Continued reductions in funding of tertiary education, a 5% increase with a 7% inflation is an effective cut, and that kind of cut has been happening for 20 years. Universities are now dumping staff in areas like science and engineering.

ockel

2031 posts

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#3082273 30-May-2023 10:25

tdgeek:

Exploded? High wage inflation is a recent issue, not recent years. Tax has been aided by low unemployment. Not exploded, or huge, but certainly there.

For sake of discussion. Everyone's opinion will differ as to whether the numbers have exploded. Source deductions have been running at a faster run rate than total tax revenue (and corporate tax run rate faster still). Other revenue includes interest, crown goods/services etc.

HISTORICAL FINANCIAL INFORMATION

Source: The Treasury

Year ended 30 June

2017 2018 2019 2020 2021 2022
75,644 80,224 86,468 85,102 97,983 108,458
Core Crown revenue 81,782 86,778 93,474 91,923 104,968 117,515
Total Crown revenue 103,422 109,973 119,142 116,003 129,335 141,627
change in tax revenue 6.1% 7.8% -1.6% 15.1% 10.7%
change in tax revenue 6.3% 8.3% -2.6% 11.5% 9.5%
CPI (source stats NZ) 1.7% 1.5% 1.7% 1.5% 3.3% 7.3%

But the Government now receives $40bn more per annum than it did in 2017. If your household had a 40% increase in its income and you still spent more every year than you earned do you think that your bank would be telling you to cut out unneccessary spending (like Netflix and Sky and overseas holidays) before it increased your mortgage?

We all recall the bruhaha when the CCFA Act caused banks to ask for spending history and denied households any borrowings before they cut out some spending. Theoretically speaking should the same rationale be placed on the Government?

Recently a NZH political reporter pointed out that in 2017 we spent $14bn on Health. We now spend $21bn on Health. For a 50% increase are things better? If not, where is that $7bn going? What is it actually getting spent on??

Sixth Labour Government - "Vision without Execution is just Hallucination"

GV27

5885 posts

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#3082276 30-May-2023 10:28

sir1963:

OR remove stuff they pay for

Free early child education/childcare

Free under 14 Doctors visits

Free 1st year university

Apprenticeships funding

etc etc.

It's not like people are not getting anything extra for that extra money

Oh cool, my kid can get a free doctor's visit. But they have to wait over six hours at an ED if there's a emergency.

My kid can get 'free hours' from the childcare centre who are telling us they'll be so overwhelmed by this policy on which there was zero consultation and definitely wasn't a kneejerk reaction to National announcing a childcare policy at all that they will have to double their teacher/child ratio or shut down operations.

Ask a parent who couldn't get an ambulance under lockdown how they feel our health system is chugging along. Announcements about extras don't count when you can't get the basics right.

Free university in the 1st year doesn't matter when you have crippling attendance issues and the Minister more interested in manipulating the release of official figures than solving the problem.

What you're arguing is that the Government should be able to announce more and more while core Crown services collapse, and no one should ask whether that's a good way to run a country. That's verging on 'failed state' stuff.

Sorry but that's a bad deal and I'm not prepared to pretend otherwise just because someone tells me so.

tdgeek

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#3082292 30-May-2023 10:56

GV27:

my kid can get a free doctor's visit. But they have to wait over six hours at an ED if there's a emergency.

My kid can get 'free hours' from the childcare centre who are telling us they'll be so overwhelmed by this policy on which there was zero consultation and definitely wasn't a kneejerk reaction to National announcing a childcare policy at all that they will have to double their teacher/child ratio or shut down operations.

Ask a parent who couldn't get an ambulance under lockdown how they feel our health system is chugging along. Announcements about extras don't count when you can't get the basics right.

Free university in the 1st year doesn't matter when you have crippling attendance issues and the Minister more interested in manipulating the release of official figures than solving the problem.

What you're arguing is that the Government should be able to announce more and more while core Crown services collapse, and no one should ask whether that's a good way to run a country. That's verging on 'failed state' stuff.

Sorry but that's a bad deal and I'm not prepared to pretend otherwise just because someone tells me so.

With all that in mind, it seems we need to spend more on these things?

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tdgeek

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#3082294 30-May-2023 10:57

ockel:

For sake of discussion. Everyone's opinion will differ as to whether the numbers have exploded. Source deductions have been running at a faster run rate than total tax revenue (and corporate tax run rate faster still). Other revenue includes interest, crown goods/services etc.

HISTORICAL FINANCIAL INFORMATION

Source: The Treasury

Year ended 30 June

2017 2018 2019 2020 2021 2022
75,644 80,224 86,468 85,102 97,983 108,458
Core Crown revenue 81,782 86,778 93,474 91,923 104,968 117,515
Total Crown revenue 103,422 109,973 119,142 116,003 129,335 141,627
change in tax revenue 6.1% 7.8% -1.6% 15.1% 10.7%
change in tax revenue 6.3% 8.3% -2.6% 11.5% 9.5%
CPI (source stats NZ) 1.7% 1.5% 1.7% 1.5% 3.3% 7.3%

But the Government now receives $40bn more per annum than it did in 2017. If your household had a 40% increase in its income and you still spent more every year than you earned do you think that your bank would be telling you to cut out unneccessary spending (like Netflix and Sky and overseas holidays) before it increased your mortgage?

We all recall the bruhaha when the CCFA Act caused banks to ask for spending history and denied households any borrowings before they cut out some spending. Theoretically speaking should the same rationale be placed on the Government?

Recently a NZH political reporter pointed out that in 2017 we spent $14bn on Health. We now spend $21bn on Health. For a 50% increase are things better? If not, where is that $7bn going? What is it actually getting spent on??

Good info, thanks

GV27

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#3082295 30-May-2023 10:58

tdgeek:

With all that in mind, it seems we need to spend more on these things?

Which comes back to my original question: How much is reasonable? The problem is the people you're collecting from at ever-increasing rates have some distinctly measurable cost pressures of their own.

The government can leave tax rates unadjusted for over a decade and raise more money than ever, but I can't not pass on tax to make sure my own living costs are met. One of those situations leads to someone having to sit in the naughty chair.

tdgeek

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#3082299 30-May-2023 11:14

GV27:

Which comes back to my original question: How much is reasonable? The problem is the people you're collecting from at ever-increasing rates have some distinctly measurable cost pressures of their own.

The government can leave tax rates unadjusted for over a decade and raise more money than ever, but I can't not pass on tax to make sure my own living costs are met. One of those situations leads to someone having to sit in the naughty chair.

I guess that's all in each budget publication, and presumably that document never gets taken apart by third party analysts? In any case, it still comes back to where is the money coming from and what do we do with it.

sir1963

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#3082300 30-May-2023 11:18

GV27:

sir1963:

OR remove stuff they pay for

Free early child education/childcare

Free under 14 Doctors visits

Free 1st year university

Apprenticeships funding

etc etc.

It's not like people are not getting anything extra for that extra money

Oh cool, my kid can get a free doctor's visit. But they have to wait over six hours at an ED if there's a emergency.

My kid can get 'free hours' from the childcare centre who are telling us they'll be so overwhelmed by this policy on which there was zero consultation and definitely wasn't a kneejerk reaction to National announcing a childcare policy at all that they will have to double their teacher/child ratio or shut down operations.

Ask a parent who couldn't get an ambulance under lockdown how they feel our health system is chugging along. Announcements about extras don't count when you can't get the basics right.

Free university in the 1st year doesn't matter when you have crippling attendance issues and the Minister more interested in manipulating the release of official figures than solving the problem.

What you're arguing is that the Government should be able to announce more and more while core Crown services collapse, and no one should ask whether that's a good way to run a country. That's verging on 'failed state' stuff.

Sorry but that's a bad deal and I'm not prepared to pretend otherwise just because someone tells me so.

Free childcare has been there for years, as had maternity leave.

Dont confuse the announced expansion with what is already there and funded.

And all I can say, think things are bad now.... you aint seen nothing yet.

GV27

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#3082306 30-May-2023 11:35

sir1963:

Free childcare has been there for years, as had maternity leave.

Dont confuse the announced expansion with what is already there and funded.

And all I can say, think things are bad now.... you aint seen nothing yet.

'Free childcare' has been basically left on seen and wasn't fit for purpose. It's the perfect analogy of just neglecting something and pretending the fact that it exists means its effective. 20 hours free in a country where you need two working parents to pay a mortgage and keep the lights on, and hasn't been increases since it was introduced... in 2005? That's about as sensible as not adjusting your tax brackets once a decade at a minimum.

But sure man, the fact that we also neglected that for so long and only hurried to implement any changes when the opposition decided to make it a policy platform? That's definitely something we should be proud of.

The bar is so, so low in this country for scrutiny and that's one of the main reasons we're in this mess. People just accept what they are told as long as it makes them feel good about themselves, bonus marks if it's at the expense of someone else. And to hell with actually putting things through some sort of sniff test.

tdgeek

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#3082307 30-May-2023 11:39

sir1963:

And all I can say, think things are bad now.... you aint seen nothing yet.

I think so too. All these decades of can kicking will eventually end up disastrous. Same deal when you keep ignoring house maintenance issues, that will also hit hard down the track

Covid, Ukraine, cyclones all bring doomsday forward

tdgeek

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#3082311 30-May-2023 11:42

GV27:

The bar is so, so low in this country for scrutiny and that's one of the main reasons we're in this mess. People just accept what they are told as long as it makes them feel good about themselves, bonus marks if it's at the expense of someone else. And to hell with actually putting things through some sort of sniff test.

100%. And we will keep voting people in, then bugger that, so we vote the same person in who is just wearing a different colour jersey

sir1963

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#3082318 30-May-2023 11:51

GV27:

The bar is so, so low in this country for scrutiny and that's one of the main reasons we're in this mess. People just accept what they are told as long as it makes them feel good about themselves, bonus marks if it's at the expense of someone else. And to hell with actually putting things through some sort of sniff test.

Problem is, everyone has different ideas about what fair and reasonable are, and a different "it's at the expense of someone else" view too.

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