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May 21, 2007 | by  | in News |
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Thank You, Dr. Cullen

After yet another big budget surplus, Finance Minister Dr. Michael Cullen announced at the end of last week a long-awaited business tax review. If the planned legislation goes ahead we will see the current 33 per cent business rate drop to 30 per cent. The proposed cut is a major step in the right direction for a government operating on economic ideas older than many of its MPs, and will provide a necessary boost to the small New Zealand owned firms that make up the bulk of our employers.

Nor does the good news end there. With the proposed tax cuts providing the private sector with a little more short run flexibility, National Party leader John Key has announced the Party’s intentions to restructure income tax if National is elected in 2008.

Currently middle and low income earners continue to face a heavy tax burden while they receive cash payments from the government in the form of family assistance and other benefits. Sociologist Peter Saunders has coined the process ‘churning’, and considers it to pose a major sociological and economic problem. By playing middleman on welfare issues, the Government creates state dependency and damages earning incentives.

”The original welfare state operated like Robin Hood,” he says, “taking money from the rich and using it to help the poor. But the modern welfare state operates more like a giant piggy bank, taking money from ordinary people and then giving it back again.”

As New Zealand struggles to compete with Australia on wages and salaries across the income spectrum, it is becoming increasingly clear that we’ll have to compete on tax instead. With our high dollar and over-sized current account deficit revealing the strains of nearly eight years of high Government and private expenditure, Key’s announcements can be seen as a potentially welcome relief, particularly for middle and low income earners.

Cullen’s announcement is also a big step in the right direction, though in light of his new-found wisdom I still have a question for the honourable minister.

Why only a three cent company tax deduction? Countries throughout Asia have realised the benefits to new business and employment growth of keeping the corporate rate low, Ireland is now joining them to lead the way for the EU with its low business rates of between just 12 and 16 per cent. Ireland has steadily outperformed its trading partners, moving from a conflict torn backwater to a world class economic performer at a remarkable pace. New Zealand too, with some more inspired thinking from the top, and a more responsible approach to state spending, could reap the rewards of low rates, regenerating lost income and tackling our current account deficit with a requisite rise in GST.

Many students already pay tax on their earnings, and all of us will in the future, so it is important that we factor the Government’s fiscal responsibilities into our political thinking. The recent series of announcements mean good news for now, and with the prospect of a new National Government next year, even better news is to come.

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Comments (24)

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  1. Franky Boy says:

    Sounds like a load of wank to me mate

  2. Regan Woodmass says:

    hey man how are you? searched your name came up with this. hope all is well.

    Nice one man

  3. seann says:

    WHY DO SO MANY LABOUR SYCHOPHANTS COMMENT SO MUCH ABOUT LABOUR’S SUPPOSED VICTORIES? THEY HAVE TO KNOW LABOUR IS OVER. NEXT YEAR I HOPE THE ALLEGED RIGHT GETS IN. MAYBE THERE’LL BE A BIT MORE LIFE IN POLITICKING AGAIN. GOD, NZ HAS BEEN BORING UNDER LABOUR. OF COURSE, I AM NOT A SUPPORTER OF THE OFFICAL RIGHT – BUT AT LEAST IT DOESN’T CONFUSE ITS IDEOLOGY WITH LOTS OF LIBERAL SOUNDING PRONOUNCEMENTS THAT END UP DISABLING MOST PEOPLE EVEN MORE – AS THE TRULY FASCISTIC LABOUR GOVERNMENT DOES.

  4. seann says:

    BASICALLY, THE LABOUR GOVERNMENT WILL NOT BE EXCITING UNTIL I AM RUNNING IT. IF ONLY THEY WOULD LISTEN MY IDEAS! I FEEL I HAVE TO SHOUT TO BE HEARD

  5. seann says:

    Editor, please delete comments by the person posting with my name

  6. seann says:

    MY NAME IS SEAN! SEAN N.

    I AM ENTITLED TO USE MY OWN NAME.

    YOU ARE NOT THE ONLY ONE IN THE WORLD WITH THE NAME SEAN N, okay?

  7. SEANN (the real one) says:

    “seann” said: BASICALLY, THE LABOUR GOVERNMENT WILL NOT BE EXCITING UNTIL I AM RUNNING IT. IF ONLY THEY WOULD LISTEN MY IDEAS! I FEEL I HAVE TO SHOUT TO BE HEARD

    You truly are a dingbat. The Labour Government is an authoritarian beast – and no decent human being would want to have anything to do with it

    “seann” said: MY NAME IS SEAN! SEAN N. I AM ENTITLED TO USE MY OWN NAME. YOU ARE NOT THE ONLY ONE IN THE WORLD WITH THE NAME SEAN N, okay?

    “sean” isn’t my name, its ‘seann’ – by all means use your real name, none of my business. You’re a free being, do what you like.

  8. Seann (the real one) says:

    We need to SCRUTINISE the Labour government and its policy plants much more closely – and stop monitoring the masses so much. This country is testament to Orwell’s vision and under the sick, depraved, perverted, fascistic right-wing Labour Junta it is getting worse – MUCH WORSE. The Labour Government is dangerous. Not in a cool way like Hezbollah but in a underhanded, sneaky, slimy, mutton dressed as lamb sort of way.

    DOWN WITH LABOUR!
    DOWN WITH THE GREENS!

    PS. Im actually a lefty, but a real one.

  9. Seann (the real one) says:

    Cullen, Clark and the rest of those freaks are braggards that need to finish. The people see through their hubris. Next year will end their reign of TEGHGGOOORRRRRRRR (inspired by that dirty zionist drag queen, “Sharon” – is she dead yet???)

  10. opo says:

    DWON WITH CAPITALISATION!

    LULZ

  11. seann (the real one) says:

    The only good thing about Lebanon is the cucumbers. I am truly left wing and everyone else is faking it or simply does not understand what it means to be left wing.

  12. seann (the real one) says:

    The only good thing about Lebanon is the cucumbers. I am truly left wing and everyone else is faking it or simply does not understand what it means to be left wing.

  13. Evee says:

    That was a post so good it was worth repeating.

  14. Tristan says:

    “The only good thing about Lebanon is the cucumbers”.

    Hmm. What about Haife Wehbe? She’s pretty funny.

  15. SEANN (the real one) says:

    As I said, the LABOUR PARTY is OVER. And I can’t wait to see the end of those vicious, fascist, backward, right-wing, racist, hateful, hand-holding, holier-than-though, arrogant fuckers CULLEN and CLARK.

  16. SEANN (the real one) says:

    One of the BEST things about Lebanon is Hassan Nasrallah. LONG LIVE HEZBOLLAH AND LEBANON; DOWN WITH ISRAEL. DOWN WITH THE FASCIST ZIONIST BEAST AND THE FENCE-SITTING APOLOGIST HELEN CLARK!

  17. SEANN (the real one) says:

    DOWN WITH THE RIGHT-WING EXTREMIST NZ LABOUR REGIME!

  18. SEANN (the real one) says:

    RE:

    [seann (the real one)
    September 1st, 2007 at 3:37 am
    The only good thing about Lebanon is the cucumbers. I am truly left wing and everyone else is faking it or simply does not understand what it means to be left wing]

    THAT POST isn’t mine – that imposter is deeply insecure and depressed and desperate for affection. He will commit suicide eventually.

    DOWN WITH ALL INSTITUTIONS THAT HAVE MADE AND SUSTAINED CAPITALISM AND THE CAPITALIST CLASS SYSTEM THAT HAS OPPRESSED AND EXPLOITED ALL OF THE PEOPLE OF OUR HISTORY!

  19. Evee says:

    sing the song of angry men

  20. Ricky says:

    what is this trash

  21. SEANN (the real one) says:

    re: “sing the song of angry men”

    What a silly, outdated cliche. Learned behaviour no doubt. I wager you inserrted that come-back slogan in school or perhaps at an ACT planning orgy? I think you ought commit suicide too. Better for the world. DEATH TO THE FASCIST LABOUR INSECT THAT PREY’S UPON THE LIFE OF THE PEOPLE!

  22. SEANN (the real one) says:

    re: “what is this trash”

    Well, finish the sentence, you illiterate monkey. DOWN WITH ISRAEL, DOWN WITH MICHAEL CULLEN, CLARK BOOT-LICK AND ZIONIST SYMPATHISER!!

  23. Ricky says:

    seann is garbage throw him in the bin

  24. Evee says:

    Actually it was from a musical

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