Kerre Woodham: Do you really expect tax cuts?

I wanted to get into this on Friday when the IRD released it’s figures about the online gambling tax, and we were overrun by events. So, let's have a look at this today for the first hour at least because the Government books are open, the numbers have been crunched, and reality is starting to bite.  

The size of Grant Robertson's hole has been revealed, and the optimistic numbers National was throwing around before the election, are proving to be just that - optimistic. In August last year, during the election campaign, National announced it was going to fund $14.6 billion worth of tax relief, and it was going to pay for it by re-prioritising spending and introducing targeted revenue measures like a new foreign buyer tax on some houses.  

You will recall the ‘Back Pocket Boost’ package - it included changes to income tax brackets to compensate for inflation, introducing Family Boost childcare tax credit and increasing Working for Families tax credits. It's all coming in July 1st this year.  

According to National, that would mean an average household with children with an income of $120,000 would be better off by $250 a fortnight, Labour said that's absolute tosh, that 99% of Kiwi households would not get that $250, only 0.18% of them would. National said don't care, doesn't matter. An average household with no children will get up to $100 per fortnight, a full-time minimum wage earner will get $20 per fortnight. Whoop, open the champagne. And a super annuitant couple would get $26 more per fortnight. And when they were quizzed about how they were going to pay for that, when National was saying too that Labour had spent all the money, they talked to their targeted revenue measures like the foreign buyer tax on some houses, like the plan to raise revenue from online gambling.  

So, all very well and good, and obviously it was attractive for people doing it tough. Attractive enough for some people to tick blue, to put National in the driver's seat when it came to forming a government. Other people ticked blue because of the claw back on the landlords able to claim interest deductibility. However, IRD put up its own costings when it came to the online gambling revenue and that came in vastly lower than what National envisaged prior to the election. That means that over the four-year forecast period, the gap between National's pre-election costings and the IRD's works out at more than 500 million - which is the second blowout the government’s had with news last Monday that the government's reinstatement of aforementioned interest deductibility would come in at $800 million more than National had costed at the election, mainly because of the horse-trading with ACT during the coalition talks.  

So, all the numbers are coming in, it's worse than we thought. There's only so much you can do when it comes to public service cuts. You're not going to get as much money as you thought, but a lot of people knew that at the time. You know, everybody was saying there just aren't going to be enough foreign buyers paying that tax to help cover the cost. IRD said the online gambling revenue is vastly optimistic. It said it at the time - it's done the costings now. So why don't we just call it? We cannot afford the tax cuts. We could never afford the tax cuts. We knew we couldn't afford it. We didn't vote in National because we wanted an extra $100 a fortnight, did we? We voted for National, we voted for ACT, we voted for the Greens because they weren't Labour.  

The Greens got their largest share they've ever had of the vote and saw more MPs in Parliament than they've ever had. That hasn’t aged well, but nonetheless they got their biggest share of the vote in their party's history because they weren't Labour. Because the people who could not vote for any of the right-wing parties couldn't vote Labour. ACT went up, National went up. New Zealand First were returned to Parliament because people were not going to vote Labour. That's why we have the government we have. People were not a ‘hundy’ on National and ACT’s promises and policies. They were certain, though, that they didn't want the previous administration to continue.  

So, do we concede that there is no way we can afford the tax cuts? We've got to get the hospitals sorted, the police have to be paid properly, there's a million claims on that money. The promise of tax cuts was surely just a Trojan horse to get National back into power. But didn't we know this?  

You know you can't run a campaign saying hey, vote for us, we're not Labour. You have to come up with something. So did you vote for the current administration because you wanted, you expected, a tax cut? A tax cut was promised to you, you've voted accordingly and you want that bloody tax cut? You want them to keep their promise? Or do you accept that the price of an extra $100 a fortnight, the price of an extra $26 per fortnight is simply too high to pay with the country in the state it's in?  

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