Budget 2010: Divergent views
Building the Recovery
Bill English
The National-led Government's second Budget, delivered last week, builds on our economic recovery. It helps families in our Indian communities get ahead and takes concrete steps towards delivering the brighter future National campaigned on in 2008.
It's great that we've come out of the recession in stronger shape than many countries. Our economy is expected to grow by 3.2 per cent in the coming year.
But we're not out of the woods yet, so this is a sensible Budget that keeps a tight rein on government spending, and returns our books to surplus by 2016.
We're taking a lot of positive steps. By focusing on faster and more sustainable economic growth, the Budget will help create jobs, boost incomes, raise living standards, and provide world-class public services for you and your family.
Our tax package is the biggest reform of the tax system in nearly 25 years. From 1 October this year, personal income taxes will be cut across the board. GST will increase from 12.5 per cent to 15 per cent. New Zealand Superannuation, Working for Families, and benefit rates will all increase to compensate for the GST rise.
The changes will boost economic growth, make the tax rules fairer, and help hard-working New Zealanders get ahead. Even after the rise in GST, it gives the vast bulk of New Zealanders extra cash in their pockets so they have more choices and the right incentives to get ahead under their own steam.
And next year, the company tax rate will fall to 28 per cent, ensuring New Zealand is competitive internationally.
The Budget continues the Government’s multi-billion dollar investment in infrastructure such as high-speed broadband, roads, rail, and schools. And it makes a substantial investment in research, science, and technology – a key driver for a faster growing economy.
We owe it to our hard-working Indian families to provide them with the financial security, opportunities, and higher incomes that allow them to get ahead in this country.
Budget 2010 does those things and sets out a path to build on our economic recovery.
Inflation will negate tax cut gains, Goff says
Dev Nadkarni
Labour Party leader Phil Goff spoke to Indian Weekender and expressed his strong criticism to the National government’s second budget. “The projected inflation of 6 per cent will negate any gains that the tax cuts will bring,” he said.
“Add to that the $2-$3 extra that ACC payments will entail and the ETS (emissions trading scheme) which kicks in from July this year will make petrol costlier and the power companies have already warned that electricity costs will see hikes as a result of the ETS. All that wipes out any gains from the tax cuts.”
Mr Goff further listed the woes of middle and low-income earners: “Childcare will cost an extra $25-$30 a week and because services for the elderly have been curbed, some will end up spending as much as $30 a week.”
Higher costs of living will outweigh benefits from income tax cuts to all across the board including students, he said.
Budget 2010 does not produce a fair distribution of income for New Zealanders, he added. “The top five percent of income earners will benefit by as much as $4 billion over the next four years.”
Mortgage rates would undoubtedly go up because of the rise in OCR which the Reserve Bank would be forced to implement because of rising fears of inflation that will go against its mandate of keeping a lid on inflation, he said. “People with large mortgages will feel the impact and the property investor tax in effect becomes a rent tax.”
“Where is the money going to come for all this, I’d like to ask,” Mr Goff said. “Of course the government will borrow. The increase in GST will help to an extent but not much. Deficit that is 6 per cent of the GDP will rise to 25 per cent by 2014 increasing the government’s indebtedness greatly.”
Mr Goff New Zealanders to be prepared for “pretty nasty cuts” in a number of services. For instance there was a $1.2 billion hole in healthcare that needed to be filled.
He said the budget offered nothing to address the needs of ethnic people. “By some estimates, unemployment among Asians is as high as 9.8 per cent. It’s not as if they are not hard working. They are intelligent and willing to work but there are just no jobs.”
He also saw no hopes for exports. “The budget does not show any export led recovery. Monetary policy should have helped exports. It does not plug holes that the last budget created,” he said.
Asked if there was anything positive he found in the budget Mr Goff said, “the positives were in small amounts – by way of some tax cuts.” He did not however elaborate or speak of any other positives.
He termed the budget a “tax swindle” and accused Prime Minister John Key of breaking his pre election promises including that of a $50 tax cut. “It’s turned out to be just $13.70,” he said. According to Mr Goff, Mr Key also had promised that he wouldn’t raise GST. “Small businesspeople have strongly expressed their feelings against a GST rise. It’s hard to put trust in a government that breaks promises,” he said.
Building the Recovery Bill English The National-led Government's second Budget, delivered last week, builds on our economic recovery. It helps families in our Indian communities get ahead and takes concrete steps towards delivering the brighter future National campaigned on in 2008. It's great...
Building the Recovery
Bill English
The National-led Government's second Budget, delivered last week, builds on our economic recovery. It helps families in our Indian communities get ahead and takes concrete steps towards delivering the brighter future National campaigned on in 2008.
It's great that we've come out of the recession in stronger shape than many countries. Our economy is expected to grow by 3.2 per cent in the coming year.
But we're not out of the woods yet, so this is a sensible Budget that keeps a tight rein on government spending, and returns our books to surplus by 2016.
We're taking a lot of positive steps. By focusing on faster and more sustainable economic growth, the Budget will help create jobs, boost incomes, raise living standards, and provide world-class public services for you and your family.
Our tax package is the biggest reform of the tax system in nearly 25 years. From 1 October this year, personal income taxes will be cut across the board. GST will increase from 12.5 per cent to 15 per cent. New Zealand Superannuation, Working for Families, and benefit rates will all increase to compensate for the GST rise.
The changes will boost economic growth, make the tax rules fairer, and help hard-working New Zealanders get ahead. Even after the rise in GST, it gives the vast bulk of New Zealanders extra cash in their pockets so they have more choices and the right incentives to get ahead under their own steam.
And next year, the company tax rate will fall to 28 per cent, ensuring New Zealand is competitive internationally.
The Budget continues the Government’s multi-billion dollar investment in infrastructure such as high-speed broadband, roads, rail, and schools. And it makes a substantial investment in research, science, and technology – a key driver for a faster growing economy.
We owe it to our hard-working Indian families to provide them with the financial security, opportunities, and higher incomes that allow them to get ahead in this country.
Budget 2010 does those things and sets out a path to build on our economic recovery.
Inflation will negate tax cut gains, Goff says
Dev Nadkarni
Labour Party leader Phil Goff spoke to Indian Weekender and expressed his strong criticism to the National government’s second budget. “The projected inflation of 6 per cent will negate any gains that the tax cuts will bring,” he said.
“Add to that the $2-$3 extra that ACC payments will entail and the ETS (emissions trading scheme) which kicks in from July this year will make petrol costlier and the power companies have already warned that electricity costs will see hikes as a result of the ETS. All that wipes out any gains from the tax cuts.”
Mr Goff further listed the woes of middle and low-income earners: “Childcare will cost an extra $25-$30 a week and because services for the elderly have been curbed, some will end up spending as much as $30 a week.”
Higher costs of living will outweigh benefits from income tax cuts to all across the board including students, he said.
Budget 2010 does not produce a fair distribution of income for New Zealanders, he added. “The top five percent of income earners will benefit by as much as $4 billion over the next four years.”
Mortgage rates would undoubtedly go up because of the rise in OCR which the Reserve Bank would be forced to implement because of rising fears of inflation that will go against its mandate of keeping a lid on inflation, he said. “People with large mortgages will feel the impact and the property investor tax in effect becomes a rent tax.”
“Where is the money going to come for all this, I’d like to ask,” Mr Goff said. “Of course the government will borrow. The increase in GST will help to an extent but not much. Deficit that is 6 per cent of the GDP will rise to 25 per cent by 2014 increasing the government’s indebtedness greatly.”
Mr Goff New Zealanders to be prepared for “pretty nasty cuts” in a number of services. For instance there was a $1.2 billion hole in healthcare that needed to be filled.
He said the budget offered nothing to address the needs of ethnic people. “By some estimates, unemployment among Asians is as high as 9.8 per cent. It’s not as if they are not hard working. They are intelligent and willing to work but there are just no jobs.”
He also saw no hopes for exports. “The budget does not show any export led recovery. Monetary policy should have helped exports. It does not plug holes that the last budget created,” he said.
Asked if there was anything positive he found in the budget Mr Goff said, “the positives were in small amounts – by way of some tax cuts.” He did not however elaborate or speak of any other positives.
He termed the budget a “tax swindle” and accused Prime Minister John Key of breaking his pre election promises including that of a $50 tax cut. “It’s turned out to be just $13.70,” he said. According to Mr Goff, Mr Key also had promised that he wouldn’t raise GST. “Small businesspeople have strongly expressed their feelings against a GST rise. It’s hard to put trust in a government that breaks promises,” he said.
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