How did he assess whether the tax cuts were worthwhile if he didn’t even know what that cost was?
Luxon gives off the impression of having very little interest in the business of governing, and more interest in the baubles of office. The result is he has spent weeks trying to explain why he was taking a $52,000 allowance to live in his own apartment and why, after $92,000 of upgrades, Premier House still doesn’t meet his standards. All while his ministers run riot with no oversight.
If anything needs some urgent oversight from him, it’s the cutbacks being made to try to fund the tax cuts. It’s startling how all common-sense analysis of what to fund and to cut has been cast aside, as the Government has been sucked into the black hole of trying to pay for a massively expensive tax package the country doesn’t need and doesn’t want.
$2.9b: that’s how much landlords will get in tax cuts over the coming four years. Some individual landlords with hundreds of houses will pocket over $1m.
At the same time, we’re being told there’s no money for school lunches, no money to give our cops a pay bump that at least matches inflation, no money for badly needed inter-island ferries, no money to upgrade our ageing Air Force transport jets, no money to repair school buildings.
The enormous amount of money going into the landlord tax cuts means Finance Minister Nicola Willis is cutting Government programmes left, right and centre, without any proper analysis of what’s worthwhile. Value for money just doesn’t get a look in.
Willis is now saying she won’t even be able to keep to her commitment to return the books to surplus in 2027 – all the while shovelling billions at landlords who don’t need it.
Why this single-minded focus on tax cuts for landlords? I’ve mentioned it before: I’m a landlord. And I can tell you, this tax cut won’t affect rents. They’re set by what people can afford to pay and how much choice is out there.
If the Government really wants rents to come down, it needs to be out there building lots more houses. The last government built 20,000 houses under its build programme. This Government should be aiming to beat that. But guess what? There’s no money for that either. It’s all gone on the tax cuts.
Willis says the economy has weakened this year. Is that any surprise?
This Government has frozen or scrapped billions of dollars in infrastructure work: school repairs, public transport, rail, and walking and cycling projects, road safety upgrades, the ferries. The result is suddenly construction firms find themselves without work, and job losses will quickly follow, not just in construction but across the wider economy.
We’re already seeing households getting nervous about spending money. Card spending is down. And what does that mean for businesses? Lower sales, more job cuts.
Where there’s less economic activity, there’s a smaller tax take and a bigger fiscal hole to fill. It’s the classic austerity spiral.
The Government is steering us towards a two-track economy, where the mega-landlords do very well out of tax cuts, and people who have to work for a living face increasing job insecurity and layoffs.
So, here’s a thought. How about we don’t do any of that? What if we don’t impoverish kids, cut school lunches, and lay off workers just to give landlords tax cuts they don’t need?
The Government actually has plenty of money to pay for infrastructure and public services – it just needs to drop these tax cuts it’s so fixated on.
But they’re not going to do that, are they? That would take some political leadership from Luxon, and he shows no sign of being interested in providing it.
