Tax Cuts??? John robs the peter to gamble again.

National leader John Key today revealed his plans to destroy KiwiSaver and its long-term benefits for New Zealand for the sake of his own pursuit of power, Finance Minister Michael Cullen said today.

"John Key's announcement today that National would slash by half employer contributions to New Zealanders' personal savings, and cut into many employees' contributions, exposes National's short-term agenda and proves how hollow National's so-called economic growth plan really is.

"National's first instinct is to destroy a programme that will help promote growth and to remove important employment rights that protect employees in KiwiSaver.

"If implemented, this would gut KiwiSaver and sells the 800,000 plus members down the river. It would mean the sell-out of many Kiwis' hopes of buying their first home. It would mean the sell-out of many New Zealanders' opportunity to having a little bit more in retirement," Dr Cullen said.

"The past 18 months of major stress in international financial markets has highlighted very clearly that New Zealand needs to strengthen its savings culture and needs to strengthen its savings and investment record. This is why KiwiSaver is so important.

"The short-sightedness of National's proposed attack on savings is matched only by its attack on investment in research and development and in infrastructure. John Key proposes to axe the R&D tax credit that is a fundamental ingredient in raising the nation's productivity and non-inflationary growth rate over time. John Key also proposes no offsetting increase in public sector research and development," he said.

"All for what? A poorly-designed tax package that delivers nothing to 370,000 New Zealand households that receive Working for Families, reduces legislated tax rates and thresholds for the lowest and highest earners and claws back as much as it gives in tax cuts – and more – for current KiwiSavers.

Note: Impact of National's proposals on modest income KiwiSavers

A person earning $30,000 in Kiwisaver under Labour would save $750 a year themselves, receive a $750 contribution from the government and a $750 contribution from their employer: That is $2,250 a year in their account. Labour has protected workers against employers clawing back their (employers') contribution.

But under National's anti-savings plan, the same person would pay in 2%, that is $375, receive $375 from the government but the $375 from their employer would be paid by the employee because of reduced wages: In other words, that worker would still have to pay $750, but their return would only be $1,125 in their account after a year.

Because these people would not get any additional tax relief under National's plan, they would end up losing $1,125 a year from their savings account in order to pay for National's tax cut package which, by design, mostly benefits those already on high incomes, without children and who do not have a personal savings plan.

Spinning the Policy a lesson in double-speak

John & Kate agree on policy confusion in the National Party.

The Evidence of the policy nakedness that is the English-Key led National Party is showing when we finally got some policy out of National. Not detailed policy it's true and John Key certainly wasn't very gracious about having to spit it out at all and he was his usual slippery self about the details.

Mr Key was clearly not happy at having his hand forced to out the policy when he had to contradict his Industrial Spokesperson Kate Wilkinson after she told a breakfast meeting that employer contributions to Kiwis were not going to be compulsary

Quite apart from what National's version of this incredibly popular savings scheme might mean in real dollar terms to the almost 650,000 people who have already signed up to KiwiSaver (the money gets pretty serious over the decades and even one percentage point difference in the employer's contributions will mean many thousands of dollars wiped off the retirement savings of workers) this episode showed National in a poor light on another front.


Here's what Barry Soper from NewstalkZB said on the KiwiSaver debacle:

"What I found interesting was the way it was handled. I was the only person this time yesterday at this particular breakfast and it was a question from the floor. Kate Wilkinson quite clearly said that employer contributions to KiwiSaver was not going to be compulsory.

Now, I had a call from the chief spin doctor from the National Party (Kevin Taylor) saying 'I understand you are going to run this story, you are wrong'. And I thought, hang on, I was there, I heard it, and so did everybody else in the audience. And he repeated, 'you are wrong, you will not run this, you are wrong'. Well we ran it and by two o'clock yesterday afternoon John Key was saying 'it was Kate Wilkinson that was wrong.'

But it was the handling of it that I found not just offensive but bullying, and saying don't run this."

This isn't the first time that John Key has threatened the media. Bay News journalist Greg Robertson was bullied and threatened with dismissal after he quoted John Key saying " I would love to see wages drop."

It's quite a contrast with the Mr Nice Guy image that John Key is so keen to present to the rest of New Zealand but it does accord with what more and more people are starting to realise - he says one thing and means another.

It's about time the serious questioning of the pretender intensified so we can judge the quality of the thinking coming from the select few who are apparently creating the policy statements for Slippery John to read.