Tax cuts or more social spending

National is proposing tax cuts and some more (modest) social spending, while Labour is proposing nothing for tax payers without children but more social spending, gambling on those workers who miss out won’t mind others being assisted.

Voters are faced with a choice between National’s tax cuts and Labour’s promise to pump billions more into core services such as health and education.

Labour’s alternative budget, released yesterday, would spend $17 billion more on health, education and family incomes over four years, but would scrap National’s planned tax cut package to help pay for it.

Leader Andrew Little said the package signalled fundamental differences between National and Labour., said leader

“You can’t do absolutely everything.

“We have to make choices about what takes priority and for Labour those priorities are the things that are going to give people a chance.”

National Party campaign chairman Steven Joyce said voters would be hearing a different message.

“It shows voters we’re much more careful with their money. Labour are proposing to borrow an extra $7bn, cancel the tax threshold adjustments and then somehow not spend much more on core services. I think it’s just a signal they’d waste more money.”

The key differences:

In order to boost spending, Labour would run lower surpluses than those forecast by National.

In 2021/2022 National is predicting an operating surplus of $8.6bn, while under Labour that would be $7.4bn.

Labour would also reduce debt at a slower pace; National aims to have debt at 17 percent of Gross Domestic Product (GDP), or about $60bn, by 2021/2022, whereas Labour’s target is about $67bn, or 20 percent of GDP.

Which approach will swing voters prefer?

How much depends on the policies of national and Labour?

How much will be influenced by the complicating factors of NZ First and Greens?

How much will the fiscal policies affect voters’ choices?

Will more people decide on personalities and perception s of leadership abilities?

 

 

23 Comments

  1. National policy seems to be $10 tax cuts, with $20 social service cuts, more and more people are seeing through the promise of taxcuts, even the Povs, there a massive structural issues at stake, immigration rates are high for our population with under investment in associated infrastructure, the super question is looming in the background, health funding has been victim to stagflation and quality of service has been sliding, and the next gen are still unable to get into home ownership in a meaningful way, a token tax cut isn’t gonna fix these issues.

    I’m an odd swing voter though, I will vote for whoever will lessen my wife’s pain legally, as opposed to economic policies, each side has its merits, even Act’s “dont have kids you cant afford” thoughts ring true.

    • Alan Wilkinson

       /  July 20, 2017

      If you wait for Government to solve your problem, you will die waiting.

  2. John Schmidt

     /  July 20, 2017

    Spending other peoples money is what they do best which is fine until the number of other people dry up.
    Also there is a limited supply of goodwill available from these other people.

  3. Alan Wilkinson

     /  July 20, 2017

    Taxpayers’ Bribe-O-Meter goes live. Labour $8B in the red.

    http://www.taxpayers.org.nz/bribe_o_meter

    • Alan Wilkinson

       /  July 20, 2017

      • Gezza

         /  July 20, 2017

        One of them’s a pathetic limp-fisted, blubbering crybaby who still needs his mum.
        Don’t listen to him Al. He’ll ask you for a tissue next.

      • Of course tax cuts are bribes too……….. 8 billion aint nothing if it goes to pov families who spend it all anyway and it gets clawed back in growth, GST etc. The trick is to make sure the money doesn’t get locked up in unproductive crap like houses…..

        • PDB

           /  July 20, 2017

          SLB: “Of course tax cuts are bribes too………..”

          Not necessarily – a good portion of the proposed tax cuts are to finally correct many years of tax bracket creep.

          • Gezza

             /  July 20, 2017

            The point is PDB, at the bottom end you get so little back in the hand it’s swallowed up by any price or rent increases or other little expenses.

          • Patzcuaro

             /  July 20, 2017

            Let’s not call it “bribes”, tax cuts & social spending are incentives to vote for one party or the other.

            • Alan Wilkinson

               /  July 20, 2017

              Bribe: dishonestly persuade (someone) to act in one’s favour by a gift of money or other inducement

              Tax cuts reduce the ability of politicians to offer bribes with other peoples’ money. “Social spending” is a bribe unless it contributes more to society than it costs.

            • Corky

               /  July 20, 2017

              “Social spending.” Free help for the poor, a little less for the middle-class and nothing for rich pricks. And everyone always goes on about tax cuts the rich get…even though they pay the most tax.

        • Not taking money OFF me is a bribe? More like the stand over man getting embarrassed at his/her/its raping and pillaging ways and not visiting for a day or two…

  4. Anna

     /  July 20, 2017

    I understand the overdue need to remedy the tax bracket creep, but help me out here because I must have missed it….explain to me how National’s tax cuts help a SINGLE person who earns UNDER the $14,000 tax threshold.

  5. Anna

     /  July 20, 2017

    Second question, why a down vote on a genuine query?

    • Alan Wilkinson

       /  July 20, 2017

      Don’t worry about the downticker, Anna. Has no rhyme or reason.

      To answer the first, why should it? It’s just trying to balance back the bracket creep. But in fact it does help everyone by restoring hope that when and if you earn more you will be reasonably rewarded for it.

    • PDB

       /  July 20, 2017

      Indeed if you earn over $14k/annum but less than $22k you will now be able to keep more of your money so more of an incentive to up your income a bit.

  6. Conspiratoor

     /  July 20, 2017

    Helens interest free student loans. The mother of all election bribes?

    • PDB

       /  July 20, 2017

      Was the ‘pledge card’ under Helen also the mother of all misusing of taxpayer money for electioneering purposes?

  7. Anna

     /  July 20, 2017

    Hmmmn…….yes, as I said, I agree with the tax brackets being adjusted.
    What struck me was the overall result is yet again, the ever widening gap……
    Increasing one’s earnings isn’t always optional either.
    Thanks anyway.

    • Alan Wilkinson

       /  July 20, 2017

      It isn’t an ever widening gap. It is restoring a slightly shrunk gap to where it was.