National is failing the people of Christchurch, and everyone else for that matter

This is really sad.  I would have thought that the National Party would care about rebuilding Christchurch following the devastation of their earthquakes.  And I would have thought that a compassionate, albeit conservative, major Government party would have agreed that a temporary levy on higher earning taxpayers living outside Christchurch is a good idea.  After all, the public do.

But here’s Minister for Everything, Steven Joyce, deputising for Finance Minister Bill English,   replying to Green Co-Leader Russel Norman in Parliament today (full transcript available here):

Dr Russel Norman: Why is the Government ignoring the compassionate offer of New Zealanders to chip in to pay for a levy at $1 billion a year, which is a much more fiscally responsible approach, and one that avoids the risk of a credit downgrade due to increased borrowing, and that also avoids the risk of inducing a new recession if there are big spending cuts in the Budget?

Hon STEVEN JOYCE: I note that it is a compassionate offer by the Green members on behalf of a whole bunch of New Zealanders they do not speak for. I think that is largely what is going on here. That is cool and everything, but the reality is that the Government believes strongly that we can reprioritise expenditure. As I have said, the Budget will be out in the middle or at the end of May, or something like that, and the Greens will have a chance to see how the Government will do that.

Um, Mr Joyce, the poll indicated that substantially more New Zealanders favoured a levy over increased Government borrowing or substantial public spending cuts to help rebuild Christchurch. But the Minister for Everything obviously has his own agenda.   It is to create an economic crisis, and then use that as an excuse for privatisation of the assets we all own as taxpayers.

26 thoughts on “National is failing the people of Christchurch, and everyone else for that matter

  1. So if the government spends $5 billion rebuilding Christchurch, they are “failing the people of Christchurch”.

    But if they charge a levy and spend exactly the same rebuilding Christchurch, they are not “failing the poeple of Christchurch”.

    It’s a great example of blind ideology – where the people of Christchurch are “failed”, not by the outcome of the rebuild, but by the method the money was collected.

    What utter nonsense.

  2. Hon STEVEN JOYCE: “I note that it is a compassionate offer by the Green members on behalf of a whole bunch of New Zealanders they do not speak for. I think that is largely what is going on here.”

    If all New Zealanders who support a levy to rebuild Christchurch were to vote Green next time …
    Is that what Mr Joyce means?

  3. At what income level do you become rich ? does it take into account outgoings on mortgages ? or should I people downgrade the home they worked hard for so they can “DO THEIR PART”.

    What if said rich people already donated money to charity ?

    I like this (read below)
    >>>>>>>>>>>>>>>>>>>>>>>>>>

    Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

    The first four men (the poorest) would pay nothing.
    The fifth would pay $1.
    The sixth would pay $3.
    The seventh would pay $7.
    The eighth would pay $12.
    The ninth would pay $18.The tenth man (the richest) would pay $59.So, that’s what they decided to do.

    The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20.” Drinks for the ten now cost just $80.

    The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men – the paying customers? How could they divide the $20 windfall so that everyone would get his ‘fair share?’

    They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so:

    The fifth man, like the first four, now paid nothing (100% savings).
    The sixth now paid $2 instead of $3 (33%savings).
    The seventh now pay $5 instead of $7 (28%savings).
    The eighth now paid $9 instead of $12 (25% savings).The ninth now paid $14 instead of $18 (22% savings).
    The tenth now paid $49 instead of $59(16% savings).

    Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.
    “I only got a dollar out of the $20,” declared the sixth man. He pointed to the tenth man,” but he got $10!”
    “Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar, too. It’s unfair that he got ten times more than I!”
    “That’s true!” shouted the seventh man. “Why should he get $10 back when I got only two? The wealthy get all the breaks!”
    “Wait a minute,” yelled the first four men in unison. “We didn’t get anything at all. The system exploits the poor!”
    The nine men surrounded the tenth and beat him up.

    The next night the tenth man didn’t show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

    And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

  4. Sounds like the preserving of power is the top agenda item of this Govt. everything else is secondary ? Kia-ora

  5. Come to think about it, short of communism there is no real way to keep everyone happy. People will always take 1 of 5 paths in life.

    1) They work hard to get high paying job
    2) They are complacent and get regular wage job
    3) They settle for lower paying job
    4) Circumstances dont make 1 or 2 an option
    5) No drive to work or contribute to society (true dole bludger)

    Out of all these #4 is the only thing we need to concentrate on, taxing the bejesus out of groups 1 and 2 is not fair as they already pay more than their fair share for the same services we all use, many services are not even available to groups 1 & 2.

  6. 6) Inherit wealth and privilege
    7) Exploit people in 1), 2) and 3)
    8 ) etc etc etc. Life is complex, a few simple categories can’t begin to grapple with it

    not fair as they already pay more than their fair share

    circular reasoning alert!

  7. Yeah true but we can fairly say the majority of people fall into the 1-5 category. You cant cater for everyone otherwise you end up getting nowhere.

    Also #6 “Inheriting Wealth and privilege” doesnt really count. If I worked my ass off trying to leave behind a legacy for my children to enjoy a carefree financially secure life why should anyone come along and be entitled to what already has had tax taken already ? fine for investment income but not whats already been earned. Hands off my money please.

  8. Back to the topic of how to afford a major new expense that was unforseen and not provided for in existing taxation levels.

    By the same logic, that those who pay most tax got the most in the most recent income tax cuts, then meeting the cost of the Christchurch rebuild falls more greatly on those with the means to pay.

    My opinion is to agree with the idea of a levy, but with a preference for deferring the introduction for a year or two until the economy improves. It does not matter if an “x” year period levy is applied a year or two later. Besides it’s really about paying back debt (we already have debt and its appropriate to accept more debt in a recession) after the recession.

    In concept, exceptional revenue means to meet an exceptional cost is valid, the issue is appropriate timing in the economic cycle.

    For now we can reduce the immediate budget deficit (and rate of borrowing) by $1B pa by simply removing the Kiwi Saver tax credit and do this now as this does not impact on the present economy so much as a tax increase/levy or spending cuts.

  9. Norman is right put simply we have a choice (1) raise a billion by taxing the rich for a worthy cause to provide housing for an earthquake torn city or (2) borrow money from the international banksters for the same purpose and pay them high interest (that compounds) and put the country further into debt!!!

    That’s bloody clever economics isn’t it?

    Oh but I forgot the banksters are Keys buddies arn’t they he’s got to keep in with them doesn’t he?????

    Are these the same institutions that have been financing wars for the last millenia?

  10. No one had yet said in this thread what the definition of rich is. Please put a $ value to this, and define other factors.

    ie If someone earns $150,000 a year and has a nice house they pay $600 a week mortgage, are they rich ? is that who you wish to levy ?. Come on people.

  11. @nzmr2guy 12:06 PM

    I’ve read both the post and the transcript of Russel’s questions several times, and I don’t see the word “rich” in either, so am a bit puzzled about why you are asking for a definition.

    What Russel is proposing is simple – a levy of 1% on people living outside Christchurch earning more than $48K, rising to $3% above %70K. Nothing to do with whether someone is “rich” or not – just proposing that those who pay are those who are better able to do so.

  12. Your described person is, if single, quite wealthy.

    If he/she is sole earner for a family of 4, merely upper middle.

    The described ratio of mortgage to income is unusually low, must have owned the property for a quite a while.

    How much tax are they paying already?

    You aren’t specific enough yet. Come on nzmr2guy.

    The question about who pays the levy has to be answered “by the people who have the money”, as it is clear that people who have little and less are not going to be able to help very much no matter what percentage of tax they are or are not paying at present.

    BJ

  13. Oh yes… then there’s your little parable about the ten beer drinking buddies.

    Lots left OUT of that parable.

    For instance –

    1. What are the relative incomes of the 10 guys involved. The top 10% actually have about 85% of assets now. Used to be less.. So paying 60% is actually a deal.

    2. Government services are not optional like beer. Some are, most are not.

    3. The government has no reduced costs to pass on. The Tavern owner gives a discount – which is supposed to represent a reduction in taxes – but there is no corresponding reduction in costs. This means that he is going into debt to the brewery.

    4. In addition to this, the rich guy has been getting kickbacks from the tavern owner, and is running a tab. The rest of the crew are paying cash.

    5. The problem of the borrowing is inter-generational. Some time later the original 10 are replaced by their 10 children. The Tavernkeeper’s replacement has gotten a visit from the Brewer’s enforcer. Time to pay up. NOW however, owing to the previous arrangements the rich guy’s kid, instead of having 59% of the money now has something like 90% ( the current situation).

    In other words, it is a cleverly constructed parable, and it is in fact a clever LIE that the wealthy have promoted as being the reason why they should be permitted to continue to screw the rest of the planet.

    We aren’t right-wing sycophants hoping to curry favor with our bank owning masters. We know as well as the the author of that parable, what he/she is trying to do, and how the truth is being distorted subtly to make the fallacy look good.

    BJ

  14. Who are these wealthy people ? what sort of numbers are we talking about ie how many people in New Zealand earn more than $150,000. I was always lead to believe that the people who earned more paid the most tax and used less government services, and you want to tax them more ??.

  15. @nzmr2guy 5:12 PM

    Yes, they do. But they earn more by exploiting the labour of those who earn less.

    The worst jobs I can think of are cleaning the shithouses in business premises, wiping the arses of people who are incontinent, and having to regularly knock on peoples’ doors telling them a loved one has dies in an accident (junior Police).

    Yet the people who do those jobs get paid stuff all compared to you or me. So we should pay more tax to help compensate the people who do the shit jobs we don’t want to do, and have the choice because of our business acumen and/or academic achievement, of not having to do.

    That said, the earthquake levy proposed by the Greens is a one-off, which would probably last only 5 or 6 years. You and I could both easily afford it – all it might cost us is 1 or 2 overseas holidays over the period. Is that a price you are not prepared to pay for rebuilding Christchurch?

  16. Yeah we should pay more because we work our asses off to get ahead in life. I worked supermarkets starting on $4 an hour, worked low level jobs for years, stocking shelves, swiping groceries.

    I paid for my own Polytech education, no one gave me a hand, went back to supermarket and retail for another 2 years before I got my first decent job earning $11 an hour…..oooooo im so rich.

    Fast forward 12 years and now im on $72K a year, almost freehold thanks to investment in property, have nice things, my partners story is the same as mine.

    Who got us there ? WE DID !!!! and now do gooder pr**cks want to the tax the s**t out of us even more because hey somehow we are more priviledged than the people that swipe my groceries at the supermarket.

    I pay my fair share buddy and worked shi**y ass jobs for over a decade to get where I am, if people want to clean toilets thats their business, there is ALWAYS other options.

    Call me greedy, but I earned my money and pay my dues $30K worth a year to this stinking government, not even including rates, gst and even other god damn tax. HANDS OFF !!!!

  17. @nmr2guy
    Fact is the rebuilding of Christchurch has to be paid for. Question is when do you want to pay?
    Would you like the Government to borrow now, so you can delay payment for the time being, even though this means you will have to pay more later because of interest charges?
    Would you prefer to pay now? In which case, would you find it easier to pay (say $10 a week) when you are living on wages of $4 an hour, or when you are earning $72K a year?
    There is no free lunch here.

  18. You are on 72K a year and paying 30K in taxes? Your partner is what part of that? No kids?

    Seems quite high given the tax rates, but you ARE in the zone for the highest possible marginal tax rate.

    Trust me on this, as you make more the marginal rate goes down. There are people on 90K and 120K who are not paying that sort of percentage in tax.

    The problem is that the truly wealthy have been handing out propaganda to you and you have believed it. You think you should be siding with them, that YOU are somehow being singled out as wealthy. Not the case.

    BJ

  19. While bingo may well be paying 30K on 72K earnings to the IRD, we need to know what portion is PAYE.

    IRD collects more then just PAYE. Child support, court fines, student loans, back taxes owning, etc, etc.

  20. @Gerritt
    It’s nmr2guy who said he was earning 72K and paying 30K tax, not me.

    But there was a time when I was a bread winner earning around 70K, and at that time would have been happy to pay $40 a week for Christchurch. This might have meant giving up some luxuries (like magazine subscriptions, regular eating out and cups of coffee) but there would have been no real worries about food on the table.

  21. 30K is our combined household tax for PAYE on both our wages. No kids for 2 months at least, then we drop an income for 6 months.

    $10 a week is fine, its when people call you rich and \ or well off and have this undue expection for you to cough up without knowing your circumstances is whats pisses me off.

    I could be paying off a student loan, a house for my parents in their retirement, my childs education, my own mortgage, a combined household income of $150K can be soaked up pretty quick in this day an age.

  22. You’re going to be getting a big kickback on your tax from the gummint when the child arrives. WFF is pretty effective in the 70K range and if your partner is off work for 6 months you will be seeing a lot less in terms of tax.

    So you are certainly NOT wealthy by the definitions I use, nor I think, by anyone else’s here. You are right in terms of how quick $150 k can vanish when there are multiple people being supported. It makes you nervous and I (as a sole breadwinner because my wife CANNOT work and I am making too much for her to draw any income for disability), have a tendency to approach these things with a few butterflies as well. That’s good. The responsibilities are not going to go away anytime soon.

    It depends on YOU, everything and everyone depends on YOU and the government is coming around (or would be if we were the government) and asking YOU to help some poor sod who was in your position but no longer has a house, just a mortgage on some wreckage and an uncertain insurance claim, job and future.

    With a choice between telling you (and ourselves) to help or telling your kid that he/she has to pay both for the help and the interest to the bank, run by mates of the PM, for the borrowing. We choose to take responsibility ( it is something you have to take ).

    I am getting the feeling that with the changes in the property market (you referred to that earlier) you might be feeling like you just got hit by a truck. The thing is that someone on 70K by himself, is doing pretty well… but would not be described as “rich” and a family on 70K isn’t there at all.

    respectfully
    BJ

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