KEY POINTS:
Your Views continue:
S
I am a young single person who has worked his butt off, while having to contend with medical problems, to be earning circa 70k at 26 years of age, only to have half of it taken by the government through various means to pay for schemes like WFF. I also have to spend around 7k of what's left on my own health because our public health system doesn't cover the type of medical assistance I need. How am I supposed to save for the future to have my own kids someday? And I'm supposed to be able to afford a house? I would love to be able to stay in this beautiful country I was born in, and fulfill dreams of buying a house and raising a family in it etc. But I don't see any point when I can take my skills offshore, get paid more for them while paying less tax, and be more able to fulfill those dreams.Goodbye government. You've just lost another young person with a very specialist skillset.
Chris
As a 20-something single male I have become accustomed under the Labour government to being told other people are more important than me - woman, elderly, gays, Maori, poor, couples, students etc etc. Now, despite struggling to pay an Auckland mortgage by myself (on a house I have scrimped, saved and made sacrifices for) I am being told that families earning over twice what I do are far more important and should get handouts to help them run their kids to school in their SUVs. And I'm supposed to be happy about this? I agree with Mr Key - target the handouts at those who are in genuine need of assistance (of which there are undoubtedly a large number) and give an incentive to people to work harder to make the country more prosperous for everyone.
London
I eventually got so sick of working for Cullen's and Clark's "poor" mates that I left the country. There are thousands like me in London. What happens when all the workers have gone.
Russell
Hey Dr Cullen, I am a parent of two and single income earner, with a mortgage, whose income is outside of the qualification level for Working for Families (WFF). It galls me that you would imply when I am rich when there are mortgage free people on low incomes who get your "tax cut" and go out and buy plasma TVs, cars and other inflation producing goods. Meanwhile I get stuck with rising interest rates into the bargain. The true measure of wealth here is real assets and people like me who work hard and contribute to the country should be rewarded - although thats not what you stand for.
Peter Smith
Cullen is way past his useby date. He took over a stable and well performing economy, and has sat on his hands ever since. Now that the economy is struggling, his complete ineptitude is on display for all to see. He is out of depth in the job and out of touch with the electorate.
The only thing at which Cullen was competent was the witty comeback to put down opponents. Now that the economy is starting to fail it is clear no one is laughing. He is not amusing, just unpleasant.
Mark
John Key certainly knows how to touch a raw nerve in Cullen and Clark.The idea of spreading tax cuts across the board is completely foreign to these Marxists. This is all about Labour controlling the welfare state and its voters by delivering tasty morsels of extra benefits that do not in any way encourage people to lift themselves above this dependency. This is yet again an hysterical reaction from a very arrogant and tired group of political frauds who have led this country to the brink of international and economic embarrassment.
Perry
This will just be the start of things for labour....Just remember election year next year and tax cuts will be a topic. Will be interesting to see if labour sucks us in again..National next time I hope.
Barry (Auckland)
This government is all about telling people what to do - we now live in a nanny state. The problem that Clark and Cullen now have is that people have had enough of their brand of government and see John Key and the Nats as a viable alternative. Frankly, John Key is speaking sense, and people are responding. Michael Cullen has no answer, and has to revert to throwing mud in order to discredit John Key.
Steve
Lets face it Labour like our Nanny like to decide how we spend our money, they cant stand the thought that some people are more successful an others. It always amazes me that the guy on 100,000 pays 10 times more tax than 10 bludgers and the govt still wants more....amazing. Guess thats how Cullen sits on his chest of treasure like Blackbeard. Watch for the skull and cross bones over the beehive!
Observer of the Kiwi
One gets what one deserves! Three terms of a feminist communist government says it all. You people put them there, reap the consequences and quit complaining you obviously looove them!
Max
Nicky Hager's book, The Hollow Men, will tell you who benefits from George Bush / John Key style tax cuts. Unless you are reading this in your million dollar penthouse or million dollar yacht, you won't be one of the few who benefits.
Babu (Auckland)
My wife and I work take pride in working hard and providing for our family ourselves as opposed to getting handouts from Cullen and his Communist mates and given the number of people who we personally know, that refuse to work a full 40 hours a week, just because their handouts from Cullen's Communists that stole it from our hard earned money in the first place, we are seriously looking at getting out of the country till The Grinch is voted off!
John
Working for Families is an obscene initiative by Labour. More and more kiwis are becoming beneficiaries with the associated lack of self respect.Cullen and Clark have the audacity to call the package "tax relief" in an attempt to muddy the waters between tax cuts and social welfare. The two are poles apart. Tax cuts give you an incentive to work harder. It is mind numbingly obvious that they are more desirable than a package that requires hard working middle income earners to beg for their own money back.
Dan
Cullen is right here. Why give more money to rich folks who don't need it, when there are youngsters - who don't earn money and pay tax, because they are children - missing out? Young children have no say in our society - is it their fault their parents might've had more kids than they can afford on the crap wages companies pay? Why should children be punished just because Joe Management wants an extra floor on his house?
Andrew Montgomery
This is perhaps the most cynical statement I have heard from Mr Cullen.I am a doctor with four young children, a fat mortgage and would be eligible under the rules to make a claim under "working for families.I don't because I have some self respect. Labour has done its best to expand its constituency by expanding the net to make folk who don't need it eligible. Now I would welcome a tax cut. It may give me less than any working for family entitlement - and John Key knows this. Current tax policy benefits three groups - Lawyers, Accountants and the government.It is a net negative on the economy as lawyers and accountants are not productive in this circus - but parasitic. Mr Cullen has revealed himself to be the most vindictive finance minister this country has ever had.
Trish
Cullen is misguided.As a solo parent who is not eligible for WFF I find it insulting that my any pay rise I receive goes to support other families in the form of increased tax. Where is my incentive to work harder and achieve more, financially I may as well take a pay cut and be eligibility for WFF. People at the higher end of the income scale are the ones who help the economy of NZ grow. Surely it is time we encouraged these businesses and employers with tax cuts instead of increasing our handouts to lower and middle-income families. In the long-term handouts do nothing but perpetuate the poverty cycle.
Michael
It is incredible to hear of a lot of people saying that Labour want to keep people on the benefit when the unemployment rate is at its lower than anytime National has been in. A quick lesson for all the rich out there who can't think past their own wallet: Tax cuts for the wealthy means creating a bigger difference between rich and poor. People talk about no tax. If this happens, amongst other things, the cost of doctors visits will go up and school and university fees will increase. The only people who will be able to afford this will be the wealthy and the poorer families (who usually have poor health and education) will get sicker and more uneducated. The great thing about New Zealand is that we look after each other. It's not about 'handouts', it's about looking after people who are not as fortunate as us. Let's not turn into the USA.
Edgar Smallwood
It is a straight fight between Socialist Polices and Private Enterprise.Dr. Cullen believes that the State should control wealth and dispense it to the community in such a manner that the perception is that The Government is being generous and / or socially responsible = State Control. Labour Party Policy. John Keys believes that those who create wealth create employment and opportunities for the wider populace = Private Enterprise.Dr. Cullen and Helen Clarke are so far " Out of Touch " with reality and what the N.Z. Public really wants that it will cost them in terms of a heavy defeat in 2008. Bring on 2008.
Tony
Do anyone remember the good old days in the 90's when National had a "Trickle down" Tax Cut. The trouble was by the time it reach me it was all Dried Up. Now with Global warming and the evaporation rate- National Tax Cuts would definitely reach less people. Only if you are on top then you need not worry because if you are on top almost nothing affects you wherever you are (locally or globally).Please Mr.Key I salute you for being a self made man but as always birds of same feather will surely look after themselves/fly together right? Will it be me and me mates again? Please do not try to fix something that's not broken "Please Let It Be" Mr.Key. The current family assistance is wonderful and like everything else as it evolves needs some fine-tuning. Thank you for the memories.
Tom
The working for families scheme is just another hand-out given to people who don't have the means to care for children yet decide to have three anyway. I don't want the money I earn to be taken away and given to these irresponsible people which will in fact tell them that being irresponsible is okay because the government will catch you with hand-outs. Bottom line is if you don't have the means to bring up children, don't have them in the first place until you are able to care for them. It bad enough with the NZ benefit system offering money to people for indefinite periods of time as long as they fit a "criteria". We don't need another way for people to get easy money. Good families work for themselves, they don't need government hand-outs.
Jmac
I'm just a worker, not one of Key's mates (as described by Cullen). It's fortunate for left wing politicians that most of the money is earned by a small amount of the population and therefore not a great electoral threat. But it happens that these people are our wealth creators, they make big things happen i.e create companies like Fisher and Paykel etc, that earn money to pay employees so that they can pay taxes - including Cullen's wages. The business world is changing, it's becoming more global and mobile and the so called greedy wealthy mates can travel, however if they were only driven by wealth they certainly wouldn't stay in NZ. The real fuel that powers the development of an economy is that which a government feeds its real wealth creators. Currently Mr Cullen is emptying their fuel tanks. Cutting their taxes will give them a new lease of life - so that they can rebuild our economy - unless you want to leave it to people like Mallard and Cullen. Our per capita GDP relative to the rest of the world has fallen consistently whilst they have been in power.
Jeff
Cullen: what is wrong with you and the Labour Party? As a couple with no children (by choice), I find your ideas and opinion to be completely dumbass! If 70 per cent of NZ Families are on WFF, what does this say about NZ...a bunch on incapable people relying on government handouts in order to look after their kids? What about those who have no children?? What do they get? Why should they have to fork out to benefit only a segment of NZ's population? Labour is a joke!!! They didn't deserve to win the election and shame on the other parties that sold NZders' out!
"Rich"??mate
How out of touch. . Like many other families we are paying off an Auckland mortgage, trying to save for our retirement while raising 3 kids. We both work as surviving on one salary would very difficult. This govt defines us as rich, what rubbish. It is interesting to watch them try to figure out how to give away more $ to the "poor" and those less fortunate when those of us who have studied, paid for our education, exorbitant childcare costs, are working and struggle out way through mortgages that have doubled in the last 10 years while salaries have barely moved and yes I was guilty of voting for them. Bring on the next election. Though I wonder how many votes can be brought with a 4 billion dollar tax surplus.
Baby boomer
As a baby boomer who is now a granddad I do not wish to receive tax cuts. Giving tax relief to those now bringing up families is a sensibly targetted investment in our future. Cullen makes good sense. Key is just looking for buttons self-centred to push.
Garrett King
Both are wrong. Cullen's methods are simply wasteful. We pay someone in Wellington to take money off us, then another to see if we qualify under some regime to give us a fraction of that back.Key's methods are wrong, because through previous tax cuts NZers have not shown themselves unwise in investment for the future as the current account deficit continues to get worse. Key's methods are better in that by less tax the market and less intervention it should be more efficient. Both fail in that through either method they do not direct money into areas that we are deficient in and we need to improve on as a nation. These areas would be in my opinion, research and development spending, energy efficiency, environmental footprint, illness rates of common infections and asthma etc, productivity, savings, housing affordability and probably many more. When they begin to address these issues more seriously then maybe we could start to address our slip down the OECD rankings and really improve the quality of living for all NZers.
Martin
Of course rich folk stand to benefit the most from tax cut - they pay the vast majority of the tax in the first place - duh!
Richard
I love reading how families cannot survive in today's world, and that they need a government handout. Excuse me, if you cannot afford to bring children into this world, then please do not go and have them until you can, and when you do, don't expect everyone else to pay for you to raise your family through government handouts. It's time people were taught that more children doesnt mean more money. Have we not gone through this whole have more kids get more money rubbish with DPB.
Fraser
I think that Cullen's response is very telling, rather than raising valid concerns with Key's policy, he reverts to emotive scaremongering about some imaginary "rich mates" ripping off middle new zealanders by, shock horror, possibly giving away less than 40 per cent of their income in tax. Come on Labour, give us some real numbers or real reasons to reject National's policy, don't just try and scare voters with personal attacks on your opposition. If that's all you've got then it's time you were brought down to opposition.
Paul (Auckland)
Labour has gone through 2 terms by releasing policies at the right time. Bought votes & scrap through the last election. We deserve better. Come on New Zealand wake up before the country go down the gurgler. During the past 15-20 years the manufacturing sector is being eroded. There is where the power house of the economy comes from.
Doug Harvey
With the current tax surpluses this would be an ideal time to move to a single flat income tax rate, to remove the many anomalies arising from the present graduated rates.e.g. A salaried person on say $100,000 or more pays far more than a self-employed who can with the help of a company and/or trust and spouse split the income between these to greatly reduce their annual tax burden. A single rate would also reduce compliance costs by greatly simplifying the calculation of tax. If the rate was the same for companies and trusts as for individuals, there would be no need for complex PAYE tables, FBT would be simple,imputation credits would not be necessary as companies would have paid tax on their earnings at the same rate as individuals, interest with withholding tax deducted would not have to be declared ( same as for dividends) as the correct tax has already been paid.
By not needing companies and trusts to minimise tax, the compliance costs for SME's would be greatly reduced. IRD collection costs would greatly reduce and be more effective, as they would only have to ensure that all income was taxed, but not worry about which entity is taxed,i.e has money been unfairly channeled from one taxpayer to another. Any top-up for low income families could still apply, but would be better handled through WINZ along with other benefits.This would make the tax system simple and uncluttered. Gone would be the current disincentives to work harder and longer, and while those who do would pay more tax than those who don't,they would not be clobbered at a higher rate as their income passes beyond various threshholds. This has to be a win win for the whole country !
M H
do not support Key's tax cut policy or proposal to lower Working For Family thresholds. As a parent in a young family I am both happy to pay high tax and receive Working for family incentives. Many of us forget that the tax goes on other things and W.F.Families only takes a small proportion. Our health and education systems will suffer under Key, not to mention the environment and the arts. Let's face it, most of us want tax cuts because we are greedy - we all spend too much on things we don't need. All the statistics I have seen recently on NZ domestic consumption support this. Most of us Kiwis need to learn to live within our means and get over demanding tax cuts.
Max F
I really just wish all the politicians would get back to the basics, not the damn "bread & circuses" electioneering.... I'm fed up of hearing of house prices in Auckland as if its the only place to live in NZ - and if it's the only place to find work, then why is that? No national transport policy, run-down cashed-in infrastructure? Not that any politician would admit ... Cullen would blame it on "the problems we inherited..." - get over yourself, mate, you've gone grey on the front benches while we've all watched you do nothing with that inheritance! Personally, I'd do without WFF or tax cuts if I could do without all the Virtual Taxes - needing health insurance because the health system is dying (despite Pete Hodgsons tender care - yeah right, when did he last go on a waiting list?), the embedded school fees, the power & fuel price taxes (such a green cash-cow, though), the fire service with growing volunteer coverage because it's underfunded .. So many cases, and all with a Board or Commission so the Govt. (either side!) doesn't have to be seen behind decreased public services (with increased costs, at least inflation)- no, they just throttle the funds and wring their hands, looking no further than the next election. Godszone is dead, its ego-zone in the Beehive - no workers there, maybe one Queen demanding loyalty unto death...
Pete
After reading through the Your Views , it's clear there is little need to reiterate the long list of logical and rational reasons why Cullen and Clark have got it so wrong, and why the policy John Key espouses is by far the tonic our country needs. Our ranking in OECD standards of living can only improve once we move away from state sanctioned welfare for all, and give a clear mandate for those in our society who empower businesses and employees to grow our economy. There is no reason to recycle taxes as hand outs such as WFF except to garner voter support. Happily, the voters of today are wise to Labours old tricks, and I like most others look forward to seeing the back of Labour come the next election. PS, watch out for the coming carbon trading system as it adds significant costs to our energy resources, thus eroding the very foundation of our relative competitive advantage in global trade. Labour could easily shoot our economy in the foot given the chance!
Tony (Auckland)
have a family of 4, work hard and make good money and I too under this labour government qualify for "working for families" - it will not buy my vote and I applaud John Key for striving for a better distribution of wealth.
Economist
Mr Key of the National party is a wolf in sheeps clothing. His persuasive rhetoric is an election bribe. Vote for us the National party and we will give the whole country a tax cut. He has no credibility or substance. He hasn't told us what services they are going to cut to pay for it. National were going to spent over NZ $1 billion for 12 F15 fighter jets until a reverse polcy by Labour when they were elected for office sunk the deal. People have a short memory and what National did when they were in power. Slash and burn was there policy. Reduce Super, user pay service charges for all services. We are in this dire housing shortage problem when National decided to sell the housing stock and push up market rentals that made it unaffordable for the elderly. My Key is a sly politician who hasn't told us how the tax cuts are going to be paid for. If people don't like NZ whey should bugger off overseas. I would rather have new migrants which by the way are flooding into NZ and maybe they know something you don't. I have travelled overseas and some places crime is horrific, people live behind fortifications / security fences, bar windows for there house. You wonder who is the prisoner.
Adrian
Well is this a surprise? The last thing that Michael Cullen wants is for individuals and families to become self-sufficient and reduce the 3 out of 4 families relying on state funded incomes. In fact I wonder what the 2007 budget will do to get 4 out of 4 families reliant on state funding? The "rich" are over taxed now and paying more than their fair share - remember rich is defined as anyone earning over $40k by Michael Cullen. Good on John Keys for offering a refund back to those of us that have helped to create the large surpluses for Labour.
Photoone
Dr. Cullen makes me laugh. Under a labour Government, the rich get richer and the poor get poorer. Under a Labour government my financial state improves markedly, but at the expense of others, who are less fortunate than myself. Dr. Cullen and his nanny state colleagues know that by giving handouts they will retain at least a portion of the vote. National on the other hand wants to encourage people to take responsibility for themselves. (not the currently 'PC' thing to do though),
Les Wright
Dr Cullen should stop telling us to start saving money, is it not him & the national govt that decided to keep stealing money from our bank accounts ( withholding tax ). There is an old saying ;don't steal money, the government will do it for you.
Pete X
The so-called family tax package is only for families earning $70,000 and above. It is way off target for those with real needs. It is expected the family tax package targets the middle ground, the same group who are well off. As expected, it is an election sweetener. This government would risk economic bust for its own agenda
Steve (Wisconsin)
As an American I have some personal insight and vested interest in this debate - I will be relocating to NZ in a couple months - but very limited knowledge of the NZ situation. Your current scheme is definitely going in the right direction. National's plan, if it's being sold with Bush-like distortions and cynicism, will, as Labour implies, concentrate wealth at the top. This is the Bush approach and it is having disastrous effect here. (Please see Paul Krugman's columns in the N Y Times, April 27 and 30.) If Working for Families is flawed at the margins - and I have no ideas whether it is - all that is required is simple adjustment in the rules, not a new plan. However, politicians paint everything either black or white and nuanced positions such as mine are usually dead on arrival. I have observed from afar National's fascination with George Bush and I shudder. Don't go down that path. Equity is better for the economy than a handful of people controlling immense wealth and influence. The US will need years to fix the damage of Bush's avaricious policies.
Hauoramaoriboy
Tax cuts (by National or Labour) what a joke, and a joke on every kiwi battler at that! What they give with one hand they take away with another! Q. Will it the raised cost of petrol incurred by the new intended petrol tax? Q. Will it equal or better the increased rate of my mortgage? Q. Will after-tax be any better of? A: No.
Kiwi Overseas
Cullen is a real hypocrite. I suppose all his mates are poor then? Maybe Michael Cullen and his Labour mates should open their eyes to see how the high taxation in NZ is driving talent offshore. NZ's taxation is so high to compensate for welfare payments; some to those who don't really need it.
Erich
That's extraordinary because we had a situation we inherited where increasing numbers of children were living in poverty and if you are going to do something about that you actually have to transfer income into families with children," he said on Radio New Zealand. Erm, well, or you could maybe consider not having kids if you can't afford to support them yourself? As a single person with no kids, tax breaks for married couples or families always end up shifting more tax burden my way. The higher your income level, the more society has worked to your advantage and the greater your tax burden should be. While hard work may often be an element, people who are desperately poor often work far harder than people who are immensely wealthy - they just may not have been born into wealth or a family that valued traits that lead to entrepreneurial behaviour. I'd rather all of my taxes went to help people less well off, actually.
CB (Tauranga)
There needs to be tax cuts. Instead of giving us working for families they should just give us back our own money! Labour out now.
Ronfeld (UK)
Everyone is complaining about the lack of opportunities for more jobs... Business creates jobs and the economy is in hyper inflation - there are enough jobs and income assistance reduces wage inflation for employers keeping the cost of these jobs down. What a lot of people always fail to see is the real argument that is being presented is what this tax revenue should be spent on; should it make the difference between a BMW or a Mercedes or should it be the difference between a 2 or 3 bedroom house for a family of 5. Baring in mind most people (even a family living on $100k/year) can't afford a new BMW. Aspiring landlords would be the first to cry foul when suddenly some families could no longer afford the rent or had to move to cheaper accommodation. If you are not happy with the amount you earn don't complain to the government, complain to your boss, and assess your career path. Most of the time its not the governments fault.
Academic
Low employment, higher wages, the NZ economy at full steam, general prosperity I don't get it. Labour get a slap on the hand for over spending creating a national superannuation fund for retirement. I would be concerned if the economic policies were reversed, high unemployment, low wages, the economy in recession, no savings for retirement and an exodus of New Zealanders with no new migrants to make up the shortfall. The best thing happened when Labour decided to cut (and rid of all subsidies for farmers in the 1980's the backbone of the NZ economy. We would still be growing sheep today if they hadn't remove the subsidies. Today NZ has diversify away from sheep and move into other agricultural products. It has taken 20 years for it to happen. NZ is a world leader and number one in agriculture. Most farmers around the world, Europe, Asia, America subsidise the farmers. Lets not do the same for manufacturing and give them handouts. NZ has to diversify away from manufacturing otherwise we will be stuck and in a time warp.
Cath
Why would this goverment want to give tax cuts? The more money they can get from people paying tax the move they can give to people as handouts.
Rob Voss
I think inflation is being pushed up by heavy government spending eg income for those with children under 18 years! We have 2 'children' of 23 and 19, still living at home. I think that 'middle income NZ' all need tax cuts as tax in NZ is horrendous compared to S. Korea and China where I worked and lived for 2.5 years recently. I was taxed unjustly and unfairly on the difference between the tax I paid in those 2 countries (with high growth rates of 8-11 per cent) and what an employee would pay in NZ(because I was 'born in NZ'! Cullen has taken in huge tax surpluses, the IRD increase steps of which are not 'cost of living' adjusted each financial year to give employee equity. Anyone with dependents is finding the cost of living difficult.
Michael H
I fail to see how tax cuts will benefit our countries current situation, given our high level of non-tradable inflation and a propensity of most kiwis to spend beyond their means. Putting more money back into people's pockets who can't be trusted not to spend it is a bad idea, this includes the Working for families packages. The whole concept of trying to win votes with flawed policies shows firstly how ignorant most NZers are and secondly how little regard politicians have for the countries best interests. There are definite measures that can be taken to provide benefits to all NZers, based on their level of contribution to the countries output such as compulsory superannuation for all working people, yet the government skirts around issues and provides half-cut solutions to the problems all the time. When will we do what is necessary and make sure the money that people earn goes towards their future retirement rather than paying exorbitant mortgage rates which only serves to make overseas banks richer?
Mike
Cullen is wrong, under the current system there is no incentive to get ahead. I don't want to be a beneficiary. I want to be fairly taxed.
Steve
Invariably jobs are created by people in the highest tax threshold. These people pay more tax through those they employ than themselves. Isnt it obvious to Cullen that by helping those who create jobs, we are going to have more people capable of paying tax. Rather than investing their money in buying rental properties or worse, taking it offshore. Also isnt it obvious to Cullen that Key has paid tax through the private sector while Cullen himself has had his taxes paid by normal "working people" like the rest of us. Cullen, stop politicking and start realising the policies you are nurturing are very quickly stuffing up our economy!
Michael (Wellington)
I have two problems with WFF for middle and high income earners: Firstly, middle and high income earners are giving 40c in the dollar to the Government already, and getting about 5c back from WFF. Secondly, I don't understand how WFF incentives me to work harder (i.e. be more productive) - pretty much every dollar of any pay rise or bonus I could receive for working hard is lost through tax, WFF claw back and ACC levies. I also note John Key hasn't talked about removing WFF for low income families - so his tax package sounds like it will be tax neutral for most families but remove the disincentive to increase income, and make no-kids households better off.
G
My family is probably one of those who qualify for wo