Reversal of National's tax cuts to make Government's 100 Day Plan largely cost neutral, according to Treasury's Half Year Economic and Fiscal Update

Cartoon of Grant Robertson by Jacky Carpenter

The Government’s election promises outlined in its 100 Day Plan will be paid for by doing away with the income tax cuts promised by the previous government.

Treasury, in its Half Year Economic and Fiscal Update (HYEFU), says the operating impact of the Government’s 100 Day Plan will be largely cost neutral.

The substantive additional capital expenditure – largely driven by KiwiBuild and the Government resuming contributions to the New Zealand Superannuation Fund - will see the Government’s debt increase.

However a growing economy will keep it on track to achieving its promise of reducing net core Crown debt to 20% of GDP by 2022.

With Treasury expecting net Crown debt to fall to 19.3% of GDP by 2022, Finance Minister Grant Robertson says the Government has “a bit of head room”.

Net core Crown debt currently sits at 21.8% of GDP. It is expected to pick up in 2019, before tracking down.

It was projected to fall to 20% of GDP by 2020 under the National-led Government.

Despite the Government spending more, Treasury only expects it to issue an extra $1 billion of bonds over five years, further to that it forecasted in the PREFU. Westpac economists say this implies the Government will pay for much of its additional spending by running down other financial assets.

Higher growth seen

Treasury also sees greater growth under the current government, compared to under the previous one.

It expects the total cumulative increase in nominal GDP to be $1.5 billion higher over the four years to June 2021, than was forecasted in its Pre-Election Fiscal Update (PREFU) in August.

GDP growth is forecast to expand at an average rate of 2.9% per year over the next five years, supported by population growth, low interest rates, increased government spending, a positive international outlook and higher terms of trade.

However, at 2.9%, Treasury expects annual growth in the year to June 2018 will be slower than previously forecast.

“Economic growth appears to have slowed in the 2017 September quarter with wet weather hampering agricultural production, continued weakness in the housing market, and slower growth in private consumption,” it says.

“Over 2018/19 the new Government’s policies increase government spending but reduce private expenditure, which leaves expected GDP growth unchanged.

“In 2019/20 and beyond faster growth in household incomes and the Government’s KiwiBuild programme contribute to higher GDP growth.”

Annual per capita GDP growth is also expected to rise from 0.6% to 1.7% in 2019, before falling to 1.4% in 2021.

Overall, Treasury says: “The fiscal outlook is anticipated to keep improving across the forecast period, though at a slower pace than in the Pre-election Update…

“The operating balance before gains and losses (OBEGAL) is expected to continue growing across the forecast, reaching a surplus of $8.8 billion (2.5% of GDP) in 2021/22.”

This forecast is more upbeat than that of ANZ and ASB economists.

Unemployment seen falling, wages forecast to grow by more than 3% annually

Treasury expects more economic activity to strengthen the labour market, reducing the unemployment rate from where it’s at now at 4.8% to 4% by 2021.

“Tightening labour market conditions and building inflationary pressures support a pick up in wage growth, which receives additional impetus from the Government’s policy to increase the minimum hourly wage to $20 by 2021,” it says.

Wages are forecast to grow at over 3% per year on average over the next five years.

Headline inflation is expected to pick up from 1.7% to 2.2% by 2022.

To ensure inflation remains at around 2%, Treasury expects interest rates to increase “steadily” from late 2018.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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102 Comments

" Treasury expects annual growth in the year to June 2018 will be slower than previously forecast. “Economic growth appears to have slowed in the 2017 September quarter..."

Sound right. So 3.25% 2 Year Fixed on the way.... Australia seems to know that already:

" UBS analysts flagged this morning the weak outlook for the consumer is set to continue.
"For some time we have been concerned about the challenging outlook for the consumer," they said in a note to clients. "The downward wage-price spiral, slump in retail sales, weak inflation and consumption illustrates this pressure. The UBS Economics team has further downgraded forecasts for consumption to 2 per cent in full year 2018 due to the fading household wealth effect and falling savings rate."

http://www.afr.com/business/retail/myer-sales-sink-5-pc-in-first-two-wee...

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The tax cuts National offered was why I voted Labour even though it cost my wife and I $2,000 a year in 2018 and $4,000 a year from 2019 onwards. The well off could do without the tax cuts and the money saved could instead be used to improve life for those in poverty.

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11959462

But will that happen? Tax cats benefit everyone who is working, both poor and rich. Without tax cuts, it means less disposable income to buy things, which potentially means less money for retailers, who employ lower wage staff.etc. People do have a short memory, and last time they got voted out largely due to being too nanny state. They now have a new term for nanny state which is ‘active government ‘ but IMO it means the same thing. I do worry in the future whether there will be tax rises. VAT in the uk is 20 percent and I wouldn’t be surprisedif nz heads upwards too, but possibly removing it on food, to offset criticism. I wouldn’t be surprised if the tax working group suggested something like this.

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Tax cats benefit everyone who is working, both poor and rich.

It always comes down to balance, though. An extra $20 a week or month might make a whole lot less difference than access to affordable and prompt healthcare, for example, or enough police.

What tax will I pay if I do not own a cat?
;-))

Well, Basel, what does the fox say?

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The tax cuts benefitted higher income earners more as the tax threshold changes from $14,000 to $22,000 and from $48,000 to $52,000 meant those earning $22,000 would have got $10.77 tax reduction a week and those on $52,000 would have got $20.38 a week.

Therefore those earning $52,000 or more recieved the maximum benefit. The tax cut was not targetted to the poor and in fact was most beneficial to those earning over $52,000 pa. That's not what I wanted.

As for trickle down to retailers the poor are more likely to spend their increased family money with NZ retailers whereas the rich a more likely to either save it or go on holiday with it and blow it abroad.

Fair point. I voted Labour because National wanted the nation to live off low-productive industries such as tourism and real estate trading but Labour has promised to bring productive sectors of the economy back to life. The forecast figures seem to reflect productivity improvement assumptions. Let's hope all that does work out effectively.
Also I don't see the obsession over lowering government debt, we are in a good position as long as we achieve improvements on our NIIP.

Totally agree, and household debt is a far greater threat to any nations economy than government debt. And even if NZ government debt increased somewhat, if it increased productivity, paid for infrastructure and improved outcomes in the future for NZ..then it would be a wise investment.....Whereas tax cuts for the wealthy, IMO opinion, was about National bribing their most likely voting demographic. And nothing to do with the long term well being of NZ-ers.

First, read all of these:

Fiscal Strategy Model

HYEFU

BPS

Unfunded or uncertain or pure Exclusions - listed without comment.....Page numbers are from the HYEFU.

  • New TV station P71
  • Conservation funding not included P71
  • Customs upgrades P72
  • America's Cup P72
  • Tertiary Ed P73
    "The behavioural assumptions, and therefore the impact on future costs are unquantifiable at this early stage but there is an expected general increase in demand for tertiary education beyond the forecast period"
  • ECE Funding Review P73
  • School of Rural Medicine P73
  • Hosting APEC 2021 P73
  • Development Assistance P73/4
  • Public Housing P75
  • Refugees Quota P75
  • Justice Commitments (Access) P76
  • LINZ LandOnLine P76
  • Welfare P77
    "The behaviour change associated with such changes, including the removal of section 70A of the Social Security Act 1964 (which reduces the amount of benefit payments owed to sole parents who do not disclose the identity of the other parents of their children) is unknown."
  • National Land Transport Fund P78
    "Crown funding may need to be provided for projects if they do not receive NLTF funding and the scope, timing and costs of some of these projects are still being finalised."
  • Auckland Transport Alignment Plan P78
    "...[Gap] is between $5 billion and $6.5 billion. The Government and Auckland Council are currently considering how to refresh ATAP in order to align the priorities of the new Government with the existing priorities of Auckland Council. This work will also include consideration of options to address the funding gap."
  • Investing in Children Transformation P79
    " To the extent that the costs associated with the new Ministry cannot be funded from a tagged contingency or from reprioritisation, additional funding is likely to be required."
  • Clothing Allowances P79
    "[Act] comes into force on 1 July 2018. The fiscal implications of this Act have yet to be fully assessed and incorporated in the fiscal forecasts"
  • Learning Support P80
    "..[building cost] pressures cannot be managed within agency baselines, additional funding is likely to be required."
  • Southern Response Earthquake Services Support P81
    "The ultimate cost to the Crown of settling earthquake claims remains subject to significant uncertainty"
  • Primary Care Services P81
    "The implementation details and funding arrangements for these commitments are yet to be finalised."
  • Transitional Housing P82
    "The average cost of providing transitional housing support services is significantly higher than funding appropriated in Budget 2017...Additional capital is required to meet the existing supply target of 2,155 places, which might require adjusting upwards."
  • Addressing the Gender Pay Gap in the State Sector P84
    " Fulfilling this commitment may involve costs to the Crown."
  • Changes to Institutional Form of Government Agencies P84
    " commitments are likely to involve a number of changes to the composition and structure of existing government departments. Where the additional resourcing (and other costs of these changes) cannot be met through baseline expenditure, further Crown funding may be required."
  • Increasing the Minimum Wage P85
    ".. increased costs to State sector employers. Funding may be sought where costs cannot be absorbed within baselines without resulting in unacceptable impacts on service delivery. "
  • Pay Equity Claims following the Care and Support Worker Settlement P85
    "The resolution of such claims within State-employed and State-funded sectors may involve significant costs to the Crown."
  • Variance in Costs of 100-Day Plan Commitments P86
    " forecasts include funding for the Government’s 100-Day Plan commitments, including First Year Fees-free Tertiary Education and the Families’ Package. Where costs are different to what has been reflected in the forecasts, the resulting fiscal impacts will need to be managed."

Good stuff Waymad.

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As a working "millennial" the previous government and current government are both robbing me and my partner albeit from different angles.

Key's immigrants for votes policy sold everything to China and allowed tens of thousands of fake Indian students in every year. Selling out the future generations from having their own housing, jobs or being part of the dominant culture. And now the water in my own city might be Chlorinated due to a combinationof nitrates and 'elfin safety cotton wool.

Now Ardern's cash for votes policies are in. Labour are again incentivising not-so-smart people to pump out kids while decent middle class working couples given the short end of every stick. Working for families is already screwing us and now this:

* 1 Million rich old people with ride on lawn mowers will get their "Winter Energy Payment" of $450 a year. Not only is this a blatant theft from tax payers but it's also encouraging mismanagement of resources; no need to make your house insulated and draft free as Labour will pay the bill.

* Families with new babies will receive $60 a week for the first year...and for a further two years if they are on modest to low incomes.

* Family package will cost $5.53 Billion .

* Let's not forget bribing students with free "ed-u-cay-shun" art degrees. But only those 18+ that are permanent residents (the same cohort that can vote in elections). If you're already a student this year or you've already got your degree then lucky you - your degree is now worth less because of inflation in the education system.

* Wanting to accept more "refugees"

* Wanting to be soft on crime. Yeah great, that's going to help us robbery victims.

Don't get me wrong though. I'd rather have this than National cuckolding the country but it's still violating the the middle class right in the wallet.

edit: Stuff did a nice example of how this works for different families. https://www.stuff.co.nz/national/politics/99845890/how-the-minibudget-af... Looks we're Martins. Even if we did have a kid we'd still be on ziltch. F*@$ you Labour!

This crazy wellfare is something where I can actually agree with the Chinese community. Solo mother getting $40k per year. Hopeless.

Yeah, I agree not mean testing the old for super and paying for their power, water, public transport and whatever else Winston dreams up is a pain. However, the reality is the grey vote/NZ First has power and they are exerting that power to milk the young/middle aged. Any party wanting to be government needs to bribe the old/NZ First.

However, I see education as an investment so I am fine with that.

The funny thing is that the winter power payment was actually a Labour policy. I thought it might have been something old Winnie dreamed up. But on my way to the voting booth I decided to check Google just to be sure. Turns out it was a Labour vote grab. That quickly decided I wasn't voting for Labour. NZF are not much better but at least it's a protest vote with only one message; less immigration.

By the way means testing sucks. I remember back in the days of the student allowance all the business owners' kids got a free $200 a week because their parents had clever accountants.

The way Gifting and Asset Transfers work in this country, do you really think anyone would have a problem having 'no visible means of support' if they wanted to? That's why The Pension is universal?

Same argument could be used for making all benefits universal. I also know several friends whose parents are getting nailed for elderly care because WINZ ignored their trusts.

Best post for a while.

It's just moaning really. I haven't even started on my local council.

What do local councils and circuses have in common?

Both clip the ticket, bring out clowns, create white elephants whilst barely balancing on the books, and let's not forget, they make their animals jump through lots of hoops.

""Winter Energy Payment" of $450 a year"

For $621 I can fly to Fiji and back.

The current government makes NZ a paradise for parasites.

Spending on pensions makes up 16% and rising of total government spending, is that what you are getting at?

I think you will find this is a pre-tax figure.

The net cost after tax is much lower.

I think you will find this is a pre-tax figure.

The net cost after tax is much lower.

People who consume social services and evade tax?

There are plenty of those at various levels in society.

I agree we need to bring in work for the pension scheme. If the elderly don't want to work and make excuses like they've fallen and can't get off the floor, or that they are dying then we should cut off their pension.

But the parents of immigrants haven't worked a day in this country in their life. Grossly unfair to have them start now.

The problem is they are still working and pulling $100k plus salaries, getting another $50k a year renting their rentals and then using the taxpayer handout of $20k NZ super to go on a cruise in the Mediterranean.

Why are struggling families on $60k who are renting having to pay for the rich to go on holiday? No one wants to ask that question.

This is some of them. Many of those still working I know have to to supplement their pension(s). Indeed looking forward to my 65 I am highly confident I will not be retiring.

That's why you means test, so only those in need get a hand-out.

Haha, nice one

Well, when Comrades JA, WP,and JS get into coalition you have to expect all the money sprinkles to be fully open so the people of the land may live happily ever after ( until the tanks are emptied and the voters among them realize what they have done !! ).
Spend today and kick the debt can a bit further down the road for the millennials to deal with !!

The Nanny State is back ... Merry Christmas

'With Treasury expecting net Crown debt to fall to 19.3% of GDP by 2022, Finance Minister Grant Robertson says the Government has “a bit of head room”.'

I don't think we're quite at a Venezuela level of risk yet. Remember most of this is funded by turning off the money sprinkler National had lined up for April.

The tax cuts in April was to be anything but a money sprinkler - that was a government being generous with its surplus to all taxpayers in proportion to their income and contribution to society - and that was fair !! - Even the non contributors would also have had a special treat.
quite different to what we are experiencing now.

Eco Bird...having a high salary and consequently the biggest tax cut is in no way a measure of "contribution to society..."...no wonder your lot are unpacking their belongings in the dark corners of the Beehive...how condescending of you !!!

> The Nanny State is back

Look, that's just not how reality works. At the end of the day National were the ones that banned ordinary New Zilanders from buying moth balls. Sir Jong Key might as well have broken into my wardrobe and bitten my shirts himself for all the good that did.

It is funny that we keep comparing this Gov to the last every time we point out to its current policies and actions ... I do not see any point in justifying what is being done by comparing it with what was or would have been done under National.

At the end of the day, results and actions will speak loudly for what they are ... without any makeup

The Nanny state is back, every policy implemented thus far is nothing But Nanny State behaviour. Time will tell

A nanny state, not that I am willing to accepts that it is, is far superior to a do nothing state.

For those of us who can ties our own shoe laces and wipe our own bottoms don't need a Nanny.

Not for everyone I do understand.

Congratulations for being comfortable. My life is good too. A little empathy with those who are not in the same position does not hurt.

I am not sure what you are really saying, is it;

(a) grown ups should feel guilty they are grown up, or

(b) grown ups should apologise for having grown up (not sure why), or

(c) grown ups should pretend they are children, or

(d) to be grown up automatically makes you not empathetic, or

(e) it is best to lie about being a grown up because people will judge your level of empathy from that lie, or

(f) something else?

I think you might need a reading comprehension class then, the message is hardly cryptic - there are many people who are comparatively well off, who are perturbed by poverty, paucity of opportunity for others, child welfare etc etc who would like to see a better society for all and are willing to make sacrifices to enable that. This is a trait called empathy. It would appear you advocate a more psychopathic attitude to things.

For someone who claims other people need comprehension classes I now point out that no claims or advocations were made in that post - it was a question seeking clarity.

Maybe you are one of those people who enjoy the idea of a Prime Minister coming over to comb your hair and dress you in the morning. But I am not one of those and am happy to do it myself.

I know the idea of being responsible for ones own self is not for everyone, victimhood is populist culture today, but it hardly amounts to making me evil or less empathetic than you. In fact, it doesn't say anything at all about my level of empathy to anyone.

The answer was f) - something else. I don't need the Government to give me much help either, as I said I'm quite comfortable. The thing is - you can't extrapolate from your own circumstances to the rest of the planet. Other people have struggles you can only imagine and need help dealing with them. Giving people a leg up so that they can once again 'take responsibility' as you say is a brilliant investment even in financial or societal terms, let alone being the right thing to do.

It appears the point was more to highlight the fatuousness of the Nanny State schtick given the similarity between the parties. I.e. if Labour's a nanny state party, basically National is as much.

"Spend today and kick the debt can a bit further down the road for the millennials to deal with !!"

The irony in your statement, which you're probably incapable of seeing, is that is exactly what the National Govt did.

Awaiting the "you can't compare Govts" trite reply - to which I will front foot and answer for you now - that is exactly what can be done, it has been done since the invention of democracy.

Exactly. Furthermore, these property spruikers are desperate.

Where on earth is this growing economy come from?
There has been nothing at all,done to grow,any economy with these 100day policies!

Unfortunately, there are only two ways to grow economy in NZ, which are all against by the current government

-- increase number of cows
-- increase number of capital rich human beings

That is a National Party attitude. No wonder they are in opposition.

This is an undeniable fact, regardless of political ideologies.

It is an unsupported opinion.

I think Weta, our burgeoning gaming industry, Xero, Cin 7 and a whole host of other leading NZ companies will disagree with you there... https://nztech.org.nz/promote/about-the-sector/

Weta is an anomaly created by a uniquely talented individual. Xero is going to Australia because NZ is too small. Which is the same problem that faces anyone trying to create a successful large enterprise in NZ. Our supply chains are too long, our labour too expensive, our transport to market costs too high and our community of support industries and pool of available talent too small to make it possible to compete globally.

I partially do not agree (I agree with your Weta comment). Our labour is actually cheap by 1st world standards, but the thing is its costs. What that labour wants to buy with that sub-standard wage is then doubly expensive by 1st world standards. ie wholesalers/importers in NZ are in effect gate keepers on pricing so there is no / little competition to keep prices down, plus then we have lower wages and excessively priced products.

"pool of available talent too small" agree. TEDx did an excellent talk on the superscale effect of cities which I would class as around 8million+ we cant even field a city of half that.

The term that comes to mind is pushing poop up hill.

Xero is not moving to Australia, they are just de-listing from the NZ stock exchange. Significant parts of the company will still be based in NZ (for now). But yes, you're right, NZ does not support its companies very well and they tend to drift overseas. I see the obsession with property at the expense of investing in real businesses as part of the problem.

Well I'll give it a go anyway: I deny it. Turns out that was quite easy. Have you heard of manufacturing? Horticulture? Fishing? Aquaculture? Forestry? Software? Hell, New Zealand even has a space industry. You need a little more imagination.

No fact.s in your statement.

Uh, I will disagree in the latter, I consider "capital rich" can and are largely parasitic these days, ie damaging to an economy. So yes sure there are few those running real businesses, however these days many of the rich dont run businesses, they invest in schemes that are simply rentier taxation IMHO.

@THE man. Selling houses to each other was better was it?

In a socialist world wealth is something like a cake that falls from the heavens and the main debate is not how to make it larger but who should get how much of it.

In a green world growth is an evil that is killing the planet and should be stamped out like an invasion of fire ants.

Get real. We live on a planet with finite resources. Growth has its limits. Indeed, we have already exceeded the capacity of our planet to support us. Time to accept that fact.

You are making idealogical statements that are not true.

Whilst the planet in some respects is a finite thing - it is NOT a closed system and nor is this absolute, our planet is a member of a universe and things move in and out of your finite thing every day; most of our energy arrives from outside the finite planet (the sun) being the biggest example.

Your view of growth is myopic. Trees have been growing on this planet for all of recorded history - continuously, without interruption. Every living organism grows more very single day. Growth is not evil, it is another word for LIFE.

If we have exceeded the ability of the planet to support us (let us ignore for the moment that we are part of the planet in a material sense) - how are we all still alive and increasing in number?

@ Ralph. Isaac Asimov some decades back made an estimate of how long it would take for humans to weigh as much as the then known ENTIRE UNIVERSE assuming population increases remained at the then rate of increase. Thankfully, since then we have made substantial gains in reducing our exponential increases especially in richer countries. Humans are dealing with the power of exponentials whether we like it or not. Even if Asimov's math was not perfect his findings were interesting. Why, because his estimate was only 300 years. It is self evident that we cannot continue on such a course.

Some light reading for fools that think growth is the answer to life, the universe and everything.
http://koransky.com/Trackers/Other/IsAnyoneListening.html.

I would not claim growth is an answer to life the universe and everything, you are pushing things to extremes in an attempt to support your wild claims.

But within a not so extreme context, my salary for example, a good 12% year on year would be a very good and healthy thing that doesn't put at risk planets or universes or the finite energies of the sun.

But details are important Didge.

For examples:

(1) you can't "weigh" a universe because weight is a measure of gravity. At best we can attempt a measure of mass.

(2) but we don't know for sure whether the universe is a finite or infinite thing. So at best it is a limited observation and best extrapolations off that. It could be total bollocks.

(3) both variables are in motion, both the number of people and the size of the universe.

What you need is more context and proportionality. Let us propose for a moment that a given resource was finite, for example the sun. The fact that it must be finite in a theoretical sense is irrelevant to whether it will produce enough sunlight in the next week because we can't use enough sunlight in that time period.

The theoretical can be irrelevant in the practical if you don't qualify your statements.

You do realise that Asimov was a man who made up stories that were not true for a living? I mention this because there is a nice irony about it.

What a load of codswallop.

Richer countries are replacing their previously higher birth rate with increased immigration, as population growth is seen as a major economic necessity/driver.

"Richer countries are replacing their previously higher birth rate with increased immigration, as population growth is seen as a major economic necessity/driver." If so, it is a stupid short-sighted and very destructive policy but sadly this has often been the attitude of exploitive business.

& exploitive governments.
How do you think your local university is funded?

"If we have exceeded the ability of the planet to support us (let us ignore for the moment that we are part of the planet in a material sense) - how are we all still alive and increasing in number?"

Ralph - easy. (non renewable) fossil fuels.

Ralph - you might want to check out this - very clear summary
https://www.youtube.com/watch?v=VOMWzjrRiBg

Your grasp of math, geology and physics is a bit, um dodgy shall we say. In effect we are on a finite planet with a "leading species" hell bent on breeding ourselves exponentially beyond our ability to extract from the planet what we need to keep doing so.

Lets take some examples,

fish, since the 1970s global fish stocks have halved, what is left is heading towards un-affordability (if not extiction) 10s Millions of people rely on such fish stocks, yet as a resource it doesnt have 50 years of extraction left.

Oil we are at peak oil, we will find its cost beyond what we can afford to pay (as a species)

Climate change, we are in the process of acidifying the oceans, polluting them and changing the climate and weather beyond our and other species ability to cope.

So we are already in over-run, ie consuming more than is produced so eating into the capital.

You can look at various countries like say Syria to see how this unfolds.

All NZ's major parties are socialist. You don't see National trying to get rid of subsidies to property investors, or do away with the pension, asking people to stand on their own two feet. The parties vary slightly in who and how they redistribute money, that much is true.

I guess you are describing the limitation of labels like 'socialist'. Life is always more nuanced than simple labels.

To be more useful I should say something to the effect that; socialist thinking tends toward thinking and talking about wealth as if it is a cake that falls from the heavens and the key debate is how to cut it up rather than enlarge it - and the more tendency a person has towards the socialist style of thinking the more this observation applies.

That sounds like a pretty light caricature, to be honest. I'd be interested to see some sources of these nefarious socialist folk who believe wealth falls from the heavens.

Um, not just "socialists" (and we do have them in here on occasion) Ralph is of the same ilk just a different nuance.

Dumb people it seems cant do the simple Math, you cannot have exponential growth on a finite planet.

Just wait till we get the new prison for an additional 3000 underway !

An increase in GDP - not so sure it is wealth creation ?

You should be worried. Labour's even got the Jimmy Grants ruffled.
Look at all those angry non-English comments.https://www.indianweekender.co.nz/Pages/ArticleDetails/7/8951/New-Zealan...

No more 5 taxis parked on the front lawn of your slum anymore.

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Lesson for the day - never count your tax cuts before they hatch, there is always someone who knows how to spend your money better than you do.

Funny how people are upset about a $1000 tax cut but cool with a $450 winter energy payment. I wonder how much it costs to collect and and hand out a $450 energy payment. Cheaper to cut pension tax by $450 and be done with it. But then I guess it wouldn’t be caring and feel good to do that.

Political power derives from taxing and spending. It is a politicians life blood in being able to selectively advantage their favourites.

Don't underestimate the power conferred on the bureaucracy, even at the lowest levels, by the process of application form filling in order to get it. This is a deeply significant ritual kow-tow to the bureaucrat who approves it. It may even be the more powerful driver than the glory for the politician, which is only temporarily bestowed.

OMG! I am surprised the energy payment is not means tested for some superannuitants. Winnie would be eligible himself! I think that anyone getting NZ Super who is on an "M" code should get the energy payment. Anybody on an "S" code is usually getting considerable income from other sources (like Winnie) and does not need it. Surely it would not be that hard to administer! I understand its auto enrolment and recipients can voluntarily opt out if they think they don't need it. I am pretty sure rates relief for NZ Superannuitants is means tested.

Dodge, the way we run our property business is very profitable because we are very good st it.
This coalition have no,experience in running a business and only know how to give away people’s money to people that don’t deserve it!
There will be some major headwinds in the next year or two and they will not know what to do.
You can say what you want against what I say but at the end of the day you will find out that “The Man” knows what he is talking about and that is why he is “The Man”.

THE man. You should have been a comic.

THE MAN 2, gee whiz, you say the coalition has no experience running a business? You might be onto something there. If that's your only prerequisite then Donald Trump is considered successful in business but as for his skills as the Commander and Chief in charge of a nuclear arsenal?

Oh let me guess, you're now a Trump supporter lol!

Anyone who escapes so many near and actual bankruptcies as Mr Trump has got skills in *something*.

How to exploit people?

I would say what Mr trump has done is much more than only exploitation - ;)

So you do agree he is an exploiter.

As opposed to National who gave my money away to 'property specuvestors who "deserved it"....

Don't forget the farmers who not only got water for their farms but also massive untaxed capital gains because of it from the irrigation schemes National set up to help their mates.

It got so bad the Conservation minister (Barry) was hot to trot to change the law so Conservation land could be used for another dam (Ruataniwha) after she got shot down in the courts. What type of conservation minister is that?

How,on earth did National. Give money away to property specuvestors?
Other people bought their property not National Govt!

You surely are a slow learner.

No reality is that National kept,on giving money away to people who didn’t earn it, by way of benefits!
People have to realise that it won’t continue for ever.

Very true The Man 2 - negative gearing, tax free capital gains, top ups in rent to "meet the market" - all unearned benefits handed out by the National party.

"People have to realise that it won't continue forever." You've absolutely nailed it there.

Out of interest what ever happened to The Man? Did The Man go bankrupt, avoid paying creditors, relaunch a business with the same directors next day and being trading as The Man 2?

Define, 'earn'.
And when you do you'll see that it equates to 'income'. And income, all income, should be taxed under our present System. Is income from effort ( a job) taxable? Yes. Is Income from retained earnings ( savings in the bank) taxable? Yes. Is income from passive effort ( capital gains) taxable? Yes, and (mostly!) no. It ALL should be. All Passive Effort Income should be taxed, and in doing so the marginal rates of taxation across the board, could fall....Income is income is income....

Responsibility-all people have to take responsibility for their own careers, income, kids. This means education in such things as parenting, budgeting,spending, and their attitudes to work and other people, and their morals/ethics around living all impact on how successful they are and their "wealth". The more we give out to people the less they have to take responsibility for their actions and attitudes. Its as basic as that. By giving people money we are just perpetuating the poverty, not removing it. A hand up instead of a hand-out is needed. Take child poverty, its the responsibility of parents to ensure their kids are clothed and fed and are taught the fundamentals of living-not govt, nor any other public body. Our welfare state is killing the motivation of people to take control of their situation and improve it. Unless we change this we are stuffed long term IMHO.

Our low wage, high housing and food, just quietly, costs are killing the ABILITY of people to take control of their situation. Not everyone is a genius, not everyone is a property magnate, people are still needed for the basic, mundane but utterly necessary tasks that need to be done, in order for society to function No-one so far, has managed to adequately explain why it is that people who take these tasks on are so undervalued, then vilified because they are unable to live off the fruits of their labours. Unless we lose the attitude that they can budget their way out of nowhere near enough money, we are stuffed.

I have a suggestion for a New Year in Education and Investment.

Jacinda may learn that 2018 is all about Savings...Not mine, theirs....and stop all immigrant Speculators and over indebted locals....dead.

All those who own houses, sell em all at once.

All those renting Houses, Apartments long term, stop renting them full stop. Go live with Mummy and Daddy for a year.

All those taxpayers being rorted by Government to support them all, including Speculators...stop Working.

All those buying crap, from Harvey N, on tick, cancel the deal, the auto payment the free interest, monologue.

All those who voted for Change, May then get it...

The Truth. is a scam is just a scam... Same as Boxing Day sales.....But what do I know...

Labour is working, not speculating and being lied to....by Australians. (Banks and the Like)...The principal is the same.

Built in....pumped up. Land Banked, ...etc....Keep it in the Family....2018.