Finance Minister, Bill English, delivered the National governments second budget. There were no real surprises as most of the content of the budget had been well signaled in the run up to the budget. This budget was very much a class based budget- a budget for the rich - paid for by you!
Bill English borrowed money to cut all bands of income tax with the top rate coming down from 38% to 33% giving the rich a big hand out. It has been reported that the Telecom CEO will be $4800 better off a week, whilst a worker who has lost their job will get an extra $1.20 dole a week ! Obviously, it is OK to borrow more money so long as it is for the rich and not public services. On top of this was more corporate welfare with the company tax being cut by 2% to 28%
The Nat's have moved the burden of taxation from progressive taxation to regressive taxation with the increasing of GST to 15%. For all the crowing of the Nat's that the meagre tax cuts for the rest of us will compensate for such a rise in GST; it does not stand up to any serious analysis.
Bill English has delivered austerity to workers and beneficiaries alike. We are faced with increases in the cost of living and the tax burden of the Emissions Trading Scheme that comes into effect on the 1st July, as well as, wage freezes. The Labour Party have estimated that inflation will be 6% next year further eroding living standards. This is on top of a hike in GST. Any income tax cuts benefit will be wiped out immediately. By this time next year most people will be struggling to get by and put food on the table.
Added to this were further cuts in real terms to public services. No doubt we will see more 'user pays' in the public services as well as declining service provision at a time when most people need good public services to help support them.
This budget is a classic 'trickle down' budget. Experience shows that wealth in the past hasn't trickled down but trickled up! In fact in the last 25 years the total tax take of most wealthiest in New Zealand is now half of what it was then and the tax on capital is most generous with no capital gains tax or inheritance tax to speak of. How pampered they are indeed.
This budget will carry on this process of transferring wealth from those who have the least to those that have the most. Obviously, according to the Nat's, the poor have too much money and the rich not enough!
Perhaps what this budget highlights most of all is the need for socialism has never been greater in New Zealand.