8 Oct 2008

Underwhelming Policy Release- Tax Cuts - Tax Schmucks

Over the years New Zealand experiences a sense of deja vu with each release of "new" policy from the National Party policy think tank.

When John Key released the much hyped tax cut policy yesterday one was immediately reminded of Robert Muldoon in 1975 - same smirking smile, same short sighted thinking, surrounded by acolytes from past National administrations all congratulating themselves on regenerating failed past policies and supported by happy memories of dancing cossacks leaping through their collective minds. Here was history repeating itself.

In 1975 Muldoon dismantled the New Zealand Superannuation scheme - a programme designed to encourage savings and investment in industry and the N.Z. economy - arguing that this was the first step towards a communist state and appealing to the mirage of a short term individual gain by returning the contributions to the taxpayer and promising a tax based superannuation payment.

Interestingly, a later National Government, with Ruth Richardson as finance minister, took the axe to the Muldoon scheme and reduced the promised retirement payments as well as abusing the taxpayer for not saving and investing in the economy.

In 2008 John Key took the script from the ghost of Muldoon and began the proposed dismantling of Kiwi-Saver by raiding it to pay for the promised tax-cuts - if this isn't a good example of a john robbing the peter one doesn't know what else is.

Points echoed by Brian Fallow, in the National Party's advertising pamphlet, The Herald, commented on the Tax Cut policies as - "You can't have your cake and eat it too" policies. He said that the Kiwisaver was an essential shift in attitude to an investment in the economy of the country and that the policy released by Key was reminiscent of the 1975 National Party assault on the NZ Super Scheme.

It is interesting to note that the Herald's editorial writer suggests that at a later date National should, would , take the knife to other social investments like free childcare and other universal benefits as there is no point in providing welfare... if it "cripples" the economy.

The revitalised 1975 anti-investment policies of John Key, in his muldoonist incarnation, is also directed at disenfranchising the worker when it comes to negotiating better employment conditions and pay increases by providing the opportunity for employers to argue that those who are Kiwisavers cannot get a pay rise because they're already receiving it through the, under National minimal 2% employer contribution to the employee's superannuation savings scheme.

Here, too, is the policy of encouraging selfishness that is the underpinning of the Key theory of economics.

The prospect of a reincarnation of muldoonist economics and social policies even under the smirking smiles of John Key is not an attractive prospect for NZ to consider. The Tax Cuts - Social programme slashing policies being presented are not attractive for either the individual or the country as a whole.

No comments: