Bill English made this point several times today: “We’re not putting forward tax cuts as some kind of sugar shock.”
So he is signalling tweaks rather than slashes, to be announced in May’s budget, and indicated to probably take effect in April 2018 (at least it’s not April 2038 like proposed Super changes).
Is a little bit less tax going to be enough?
From RNZ Tax cuts ‘on the table’ – PM
Guyon Espiner: So you said that their probably will be a point of differentiation, that means there will be tax cuts offered by National.
Bill English: Ah yeah we’ve got tax cuts are on the table, ah we will look at that in the context of these other demands such as the growth in population, the need for infrastructure to support a growing economy,.
Guyon Espiner: So there will be cuts.
Bill English: Well they’re on the table. We go through the process now in the lead up to the budget and the campaign.
Guyon Espiner: Will any tax cuts that you introduce take effect in 2017, or will they only take effect should you win the election?
Bill English: Look most measures that you bring in to do with household incomes would follow the usual cycle which is if they’re announced this year they’d start first of April next year.
But this election year, and it would be odd to commit to tax cuts that may not take effect if National loses power in September.
However it is much tidier implementing income tax changes at the start of the tax year and the May budget will be too late for that.
Guyon Espiner: Ok so no tax cuts taking effect this year, only if you win.
Bill English: Well we would follow the normal cycle.
Guyon Espiner: Ok, John Key had talked about three billion dollars of expenditure needed to make a meaningful tax cut. Is that the sort of ball park that you’re operating in?
Bill English: Look that’s yet to be seen, there’s economic forecasting going on now about how the economy is going to grow, ah there’s these issues around what growth pressures there are right across our public services, the needs for long term infrastructure, the need to get our debt down, so the process we go through is to make sure we’ve got a clear understanding of all those.
I think partly for the reasons that have been discussed and that is people won’t want to see ah surpluses used just on one thing when we’ve got this range of needs to meet.
Guyon Espiner: And you’re looking at lower and middle income earners as your priority?
Bill English: Ah yes, we’ve stated that for quite some time.
Guyon Espiner: lower income, or lower and middle?
Bill English: Well lower and middle income, you know everyone thinks they’re middle income, but I think you’ve got people there who don’t always get support that’s available for lower income households, ah and they want to be able to share in the growth in the economy the same as everyone else.
Guyon Espiner: And you’re talking about those sorts of families getting, you know, north of twenty thirty dollars a week?
Bill English: Well look that’s…
Guyon Espiner: It’s not worth it otherwise is it?
Ten or twenty dollars extra a week would probably be gratefully accepted by many people who are not earning incomes like Espiner.
Bill English: Well you know we’re not putting forward tax cuts as some kind of sugar shot, ah that’s going to…
Guyon Espiner: Why are you doing them then? What’s the rational?
Compensating for the effectively increased tax rates through bracket creep for one thing.
Bill English: Well it’s just over time you’ve got these, if you’ve got a growing economy and surpluses then you can, through a variety of mechanisms support households and lift…
Guyon Espiner: Yeah but they have to be meaningful to lift incomes don’t they, I mean ten bucks a week isn’t going to cut it is it.
Bill English: Well it depends on what sort of household you are, and ah what other changes go on.
Guyon Espiner: So you can promise that it’s going to be more than that or…
Bill English: No I’m not going to be making any promises today, but there’s, look, people get support from Government through a whole range of mechanisms, last, two or three years ago we did the free doctors visits for under thirteens. That was you know a help to households who had twelve year old children.
Guyon Espiner: So it wraps into this family package that we heard about last year. You’re looking at Working for Families increases potentially as well.
Bill English: Well there’s you know we’ve got these choices…
Guyon Espiner: Thats on the mix?
Bill English: We’ve got a lot of choices here, ah, but it is important that um the ah anything that’s done around household incomes fits alongside meeting these other requirements of a growing economy such as the pressure on public services.
That was mostly a wasted interview.
Espiner tried to push English into committing to a universal lotto win for exeryone as he has no idea what a few dollars difference might mean to people at the bottom of the income pile, but English had no inclination to give away any specifics about what might be in the budget in two months time.
English didn’t have much to say about it apart from repeat hints of tax cuts so waffled around the issue. The only thing he did was repeat “growing economy” a few times, which seems to be the crux of National’s campaign strategy at this still early stage.