A taxing question
There is increasing talk now about the viability of taxation reform. The Scandinavian models of high taxes for big earners, excellent public services and top rankings on the global happiness scale fail to impress our voters, it seems. I think that can be explained not just by insufficient or poorly heard arguments from the left but by the undeniable reality that our population make-up has changed a lot in recent years. So many here have come from countries not at all familiar with socialist government; they are drawn to New Zealand by the promises (unfortunately sometimes broken) of better-paid jobs, and by an entrepreneurial energy for self-employment, small business, the opportunity to make money. Thus they are attracted more to the political right, and away from notions of wealth redistribution, trade unionism, employment regulation. Competitiveness wins the prize over collectivism. Do Kiwis want a more fair and equal society, gained through new tax structures and more public spending? Less poverty, with its damaging consequences? We need to get the debate underway, before the next election.
B Darragh, Auckland Central.
Exercising prudence
The Government will earn more respect by exercising prudence rather than tax cuts given the state of the nation. With New Zealand in recession and needing to borrow to cover deficits, it is not prudent to deliver tax cuts. The Government has found the economy more precarious than expected and the flow-on from that is to defer cutting government revenue as earlier deemed affordable. It is a sign of good management to adjust plans as new facts and circumstances become evident. The finance minister will earn respect by adjusting earlier plans in light of increasing redundancies and business closures. In our ambitions to halt runaway gaps in wealth and income in New Zealand, tax cuts - when and if they do come - must focus on low and medium earners. When tax cuts benefit the top decile earners more than the poor it inevitably erodes the inclusive and cohesive society.