The Government hasn't asked Treasury to model tax hikes, but has asked it to consider further ways of stimulating the economy, including helicopter money

That's the CCP game plan is it? Good to know

Labour did the best job possible supporting the economy! the main issue was to save lives, which she did!!!

Can we safely assume that all proposed changes to the tax system 2020 to 23, are going to be detailed in Labour’s pre-election manifesto? And likewise for National? It cannot be denied that CV19 has upset the apple cart and the demand for revenue has altered chronically during the last two months. Therefore given this unexpected and unprecedented urgency, the electorate must be made aware of what lies ahead and how it will affect them. No surprises then!

So we ship in another 500,000 taxpayers then?
Just what's needed to give our lazy unemployed a bit of competition to get them motivated....(sarc/off)
There's a disaster in the making whichever way we turn now.....
In whatever is left of a globalised world; where competition to sell goods and services is going to mean a race to the bottom for cost inputs, wages here are going to have to fall, and with them the tax-take.

Election economics are always different from normal economics.

Tax revenue rises faster than GDP, in large part due to fiscal drag where people move into higher tax brackets due to inflation.

Core crown tax revenue increased by nearly 8% between 2018/2019, well above GDP growth: https://figure.nz/chart/wNbfI969FfWMnExp

Tax revenue as a % of GDP increased from 25% in 2011 to 28.8% in 2019, but I can't think of any other significant tax increases in that time besides fuel taxes and tobacco excise which I don't think would move the bar that much: https://figure.nz/chart/15N03XZscaS9xQk6

If you understand how government finances work, which is that spending comes first and taxation happens afterwards. The currency must first be created before taxes can be paid, therefore more spending equates to more tax collected. An article here which explains this fact quite well. http://www.matchesinthedark.uk/spending-chains-sankey-diagrams/

I think you are right. Helicopter money in NZ would do little for the economy.
1. Some will pay off the mortgage or save it (Cash effectively goes to Australia)
2. The well intentioned will buy locally (well at least they buy foreign products from a local shop) so cash heads overseas with a few tickets clipped along the way.
3. Some will invest it (most likely overseas)
4. Some will convert it to cash and buy tax free local services, so probably provide the most benefit.
5. The rest just buy whatever they want from whoever is cheapest, so most likely offshore ecommerce.

However the mental feelgood factor could be worth it. Let's face it a lot of the country right now are very short on cash.

This comment from TSY;

While this would be a decision for the Government, she said additional support would need to be designed to help those “most affected” and to have the “biggest impact”.

That suggests it would be some kind of targeted 'drop'. Lots of talk about travel/hospitality credit/vouchers. Not quite sure how they would deliver it in a secure way, but timing prior to the next school holidays would be good.

Disagree about helicopter money. The stimulus to the economy should come from people spending money, not the Government spending it (although that is required too). Helicopter money given to everyone will see the lower socio-economic group spend it on necessities, and the upper groups the niceties, so it will be well spread across the economy. However a fair portion of it will return to the government through the tax structures in place.

The flow to Chinese manufacturers and banks - that a structural issue that is a problem with our economy and will not change in a hurry. COVID19 put our lack of resilience on the front page because we import most of the things that are considered necessities and don't really export that much. This is because of the economic model that has been adopted sine the early 80's, what we call Rogernomics, but essentially Friedman's 'free market' model.

So here lies the opportunity - the Government could create a structure that supports and encourages manufacturing industries to be created and grow. A few years ago I recall a news article about a young lass who came up with an idea for a wood splitter to cut kindling, but couldn't get it manufactured in NZ because of the greed of the manufacturers, or compliance costs or both. If I remember correctly it is being made in the US -for the US market. this is a clear example of the problem with NZ manufacturing that needs to change.

It’s not about the economy, it’s about votes.

Why can't the government use "smart" helicopter money in the form of a voucher that can only be spent on tourism and that expires if not used by end of the year ? It could only be used for flight and accommodation or similar things. Or how about temporarily remove GST from such services/activities ? Or make expenses for tourism tax deductible up to a certain amount, for as long as the expense occurred by a specific date ? Or how about declaring a supplementary holiday in order to have a new long weekend, and then partially compensate businesses for this lost working day ? I have no personal interest whatsoever in this industry, but I think that we really need to help the most efficient and sustainable part of it survive this crisis.

The debt will never be repaid, inflation will nibble away at it for a few decades, and future austerity measures will swap some of our financial deficit for a social deficit, which doesn't appear on a balance sheet.

Yeah, a salesman’s pitch of the seventies. You cannot afford not to buy it.

Exactly, "trickle down economy" springs to mind as well.

Hey Ralph, if you can't spend your way to prosperity how do start-ups work?

zombie economy only works when there are more than 100 million people living in a country.

Exactly. Why both the National and ACT parties keep pushing this myth that our government debt levels are too high is an insidious aspect of New Zealand politics to my mind. All they really are doing is pushing more of that debt onto the private sector. Take the Irrigation Fund under National for example, they throw a bit of government money into a pot and say, if you (the private sector) can raise the rest you can have your irrigation scheme. So what happens, Local Government adds more debt on behalf of ratepayers (private citizens) and farmers add more debt on behalf of themselves - and bingo irrigation happens - the lions share of which is new debt in the private sector. Rinse and repeat for convention centres, stadiums etc. etc.

I note that ACT in their recently released alternative budget (which aims to reduce government debt back to pre-COVID levels in four years), they want to start charging interest on student loan balances again. They want to toll every government owned highway (and I assume 'sell' them off in future, as they intend to transfer all those 'assets' to a newly formed Corporation). That's just plain and simple growing private sector debt to lower government sector debt.

We've been under funding our health sector for years - why? So that more people are forced to take out private health insurance? We've been under funding horizontal infrastructure replacement for years - again putting it all on ratepayers (the private sector) such that many councils are in a precarious debt situation themselves, and rates are unaffordable for a wide section of the population. Rates liabilities are just a debt on privately owned property. Now they are proposing to get infrastructure to the door of greenfield subdivisions by lumbering those costs as future liabilities for new homeowners. More private sector debt.

New Zealand needs to wake up to this notion that New Zealand's government debt is bad. It's an insidious position for them to take because their real expectation is that the debt needed to get things done will be taken on by the private sector - the you and me households. I don't know why these political parties do this.

I'm happy for them blow debt out if it's going to result in meaningful improvements in the lives of the taxpayers paying it back. We already know:

1) It won't be used to bolster housing supply in a meaningful way
2) It wont be used to roll out new transport networks in parts of Auckland that are already suffering extreme congestion.
3) It won't be used to fund consolidation in the healthcare sector and improve things like access to cancer treatment and screening programmes.

Or will it? Who knows, because the government has earmarked $20b of spending for a 'later date' which sounds a lot like 'election year war chest' if you're a cynic.

Frankly, there's a lot of stuff that we could do in this country to improve the lives of ordinary New Zealanders - cheaper housing, better schools, shorter commutes, etc - but is that going to be the outcome? Or are we going to pump more and more money from you and me into a system that seems to have infinite capacity to digest money, but relatively little control over what (if anything) comes out the other end?

Another great idea.