KEY POINTS:
Any prospect of a cut in personal income tax rates in the Budget has been emphatically ruled out by Prime Minister Helen Clark.
So what is your wish list for the budget? Tell the government what you expect!
>> This debate has now moved to this thread on the budget
Peter Clareburt
Just as a family can struggle with every day life as costs move above their income - so does New Zealand as a family. Yes things like Health and Education are important but they will always struggle for funding as the whole of NZ as a business entity shrinks. We need to focus on initiative that will make NZ successful on the Global market; we need to make a huge push; we need to increase the number of New Zealanders working in the export market; we need to bring in companies with incentives to bring in high earning foreign staff to broaden the tax base. I think the Ireland model is worth considering. Individual tax cuts by themselves won't achieve this we need to target wealth creation for NZ as a country. We need to move quickly to increase productivity at all levels to life incomes across the board to compete with other countries.
Nathan
I think there are two sides to this argument. Firstly, tax rates in some countries abroad are now being coined 'the reason we left'. So in this respect, New Zealanders really have nothing to complain about. Yet, I think it would be fair to assume that, if the New Zealand public could see this accumulated income tax was being dispersed appropriately, there wouldn't be such an outcry to have our income tax rate reduced.
Jan (Sydney)
For all those people bleating on about how Australia just got tax cuts and NZ should have them too blah blah whinge - word in your ear. The Australian govt is well on the nose here and has been for a while and the election year tax cuts have had no effect whatsoever on its declining popularity. There has been a dramatic turn of the tide towards Labor in Australia in the last 6 months that has become entrenched. It is fuelled in very large part by opposition to a change in industrial relations legislation last March similar to the ECA brought in by the Nationals in NZ in 1991.Australians do not want to go down the track of extreme labour market deregulation that has seen NZ's productivity and wages, for decades on par with Australias, decline to around 16 per cent and 30 per cent lower respectively. Australia has flourished with its robust IR regime while NZ has essentially become a low productivity/low wages economy with all of the negative social effects that has caused. NZ doesn't need and can't afford tax cuts - it needs higher wages and better conditions and protections for workers. It needs to force business to open its wallets and get a better share of its profits 'trickling down'. The loud bleating that drifted across the waters when the NZ govt moved recently to lift the minimum wage to still somewhere below $12 was chilling. The spectre of how long it is taking NZ to claw its way out of the mess the ECA got it into, even with a committed govt, is lending more than a shade of urgency to the rise in support for Labor here. A turn back to Nationals will be a step back into the dark ages for NZ .
Ike
Of course the rates should be cut, Mother State has dictated how we should spend our money for too long, but more importantly, in the interests of fairness, the marginal tax rate thresholds simply must be moved. There is no justification in the Government asserting (by not doing anything about it) that the 2007 thresholds should be the same as the 1999 thresholds. It's just absurd and essentially theft by deliberate negligence. "We can keep it, so we will" they say as they thumb their noses (while looking down them) at tax payers. Thresholds should be adjusted with inflation annually, end of story.
Tired
It never fails to amaze me when those crazy people carry on about how we need to give the government all that tax otherwise we will loose out on health, education etc…If anyone ran a business the way the government runs this country there'd be no business left. Can you imagine going to the supermarket to find nothing you wrote down on your shopping list is actually in stock, then to have to wait in a cue for 3 months to get out again (empty handed) before you leave you are forced to pay a compulsory fee of about 200 per cent more than you would have if you had just gone to the local grocery shop in the first place. I am a compassionate human being and care about people in need. I believe that there should be help and support for all that need it as I'm sure deep down most New Zealanders do. The government has done nothing but invent new ways of taking money of honest working people. Coming back from a job in Wellington the other day I looked through the situations vacant pages. 90 per cent of the 9 pages were for government departments with nice 'touchy feely' politically corrected titles. Of the remaining 10 per cent I estimate that a good 5 per cent contracted to government departments in some way shape or form. I'm paying for all that! And so are you! The welfare state is a flawed model. Wake up! If it wasn't flawed then we would all receive the same sort of service from the welfare state as previous generations did- we don't Fact: and anyone that thinks differently should actually do some research and work it out! The Government has had 7 and a half years It's time for Labour supporters to stop blaming previous governments for the problems faced today. It's time to figure out what Auntie Helen would have realized if she had actually entered the real world at some point between university and a her long career in politics. The welfare state doesn't work for more than one generation! End of story. Now give me my money back so I can send my kids to a good school (you know, one of those schools that people sell their left kidney to buy a house in zone….what you say?…. property prices going up??) and get my youngest seen by the specialist she has been on a waiting list to see for 2 years now!!
Jeremy
I really don't mind foregoing a tax cut if the government had actually achieved something tangible with all the tax revenue they receive. But when you consider we still drive on goat tracks for national highways, we still have massive health waiting lists, our police force is chronically under resourced, and education has become an absolute shambles. Then the government should give me the money instead and let me spend it/save it as I see fit as they seem to waste it all on bureaucrats and pen pushers.
Mat
I think Mary somewhere near the bottom said it best. To be honest, they'd be utterly foolish to simply cut personal taxes and that's that. The OECD would have an aneurysm for a start! Their suggestion was a fairly good one - shift the taxation to spending from earning - increase GST, and lower income tax. This would theoretically be accompanied with a lower tax rate on necessities - or just leave it unchanged, I don't know what would work there - on necessity goods, and up the tax to 15 per cent on non-necessity goods (yes, I know, convoluted - this is possibly the most effective way to counter overspending on luxury goods while not penalising people for buying necessity goods) And yes, Capital Gains Tax on investment properties is a bloody good idea! Finally get those "property investor federation" members who tell us "just go without your coffees for a week if you want to buy a house" (when they are the actual reason houses are so expensive!) paying for the damage they've caused to our economy.
Graham
There is a global revolution towards flat taxes and NZ is being left behind. How can NZ overcome the brain drain and remain competitive if tax reform doesn't happen swiftly? NZ will loose any remaining brainpower advantage as skilled workers will avoid migrating to NZ and those here will leave for sunny Australia. NZ is penalising workers and rewarding the lazy through the welfare system.It's a no-brainer!
Jean
The entire taxation method needs a revamp- not overall tax cuts.The tax brackets should be adjusted to reflect a high tax bracket for someone in a high payment bracket. Not the middle income earners. Families where one parent chooses to stay home and care for their children should not be penalised. If it's good enough to give a tax subsidy for child care it's good enough to pay an equal sum to a stay at home parent. Preferable the income coming into the family should be able to be shared between both parents. This would be a fairer way of assisting parents who care about the quality of their childrens upbringing and are prepared to make sacrifices to ensure they have parental support.
Stop Whinging
I am tired of hearing people whinge about tax cuts, in fact it seems we are turning into a nation of moaners, there are bigger problems in NZ which need addressing and I would rather see my tax money go there than having a few extra bucks a week in my hand. Selfish people vote National, and have eyesight that barely stretches past their wallet.
Darren
I tend to agree with a couple of the comments regarding the public and the media looking at the big picture rather than just extra cash in their pockets. I have earned a decent living for a while in NZ and have often felt ripped off once the tax was removed from my pay cheque but honestly, NZ has bigger issues nowadays than my income. If the Govt does not wish to provide tax relief to the average kiwi household, at least use the surplus to preserve our lifestyle. Buy some of the huge amount of land being sold to foreigners, incentivise students to become trades people, doctors, nurses and other critical positions we are so short of. Employ more Police or other agencies to wipe out the P epidemic and the rising crime that is splattered all over the headlines on a daily basis. Michael, if you do not feel inclined to give it to us, please spend it on the country we all love.
G
What I would like from the budget is something that can be objectively measured to benefit all New Zealanders. This does not necessarily mean across the board tax cuts and it certainly does not mean some kind of universal hand out. Government's are far too prone to buying the next election with bribes (these are probably more inflationary than any tax cuts would be). What New Zealand needs is greater investment. Investment creates wealth and wealth creates jobs. Moving people from a benefit dependency will not just reduce the amount of cash the government has to suck out of the private sector, but will increase the taxpayer base, thereby reducing the percentage tax per tax payer. This can be attacked in two ways. Encourage more investment, by reducing business tax, as has already been signalled, and reduce the benefits (the range of benefits and the value of them) to provide an incentive to move from dependency to employment and productive work. This will have a knock on effect of reducing the burgeoning state sector required to administer this burden on society.
Cedric
I've always had the impression that a budget was supposed to "balance" ie. the plan for what needs to be spent to keep the country ticking over, build new infrastructure etc. But this Government seems to be hell bent on making a profit. So what happens to profit in any other business? Me thinks it's time for a payout to the shareholders!
Brendan
Labour has squeezed the pockets of everyday NZers for too long, wasn't one of their policies to only keep the top 5 per cent in the higher tax bracket? Pretty soon we all will be paying through the nose with Mr and Mrs greed governing our country. Down with Labour. Bring on the fresh Nats to save us.
Tracey Juhl
I think personal tax cuts would be a huge mistake. I feel the country's focus should be on lowering housing prices with a capital gains tax so that my generation and future generations can afford to buy themselves a home. Buying and renting out properties may have been a great investment for our parents but their children and grandchildren are suffering now. The ironic thing is that parents then complain because their children can't afford to move out until their 30's.
Ian
What I want is for the government to stop taking any money from anyone, hand all the money they have taken over to me, and put more funding in Health, Education, Roading and Police. Is that too much to ask for? That seems to be the consensus in the media.
Ron
A country gets the government it deserves. I didn't not vote MMP or Labour but have to suffer this communistic socialistic government where it brings people down to one level instead of lifting people up . There is only one choice as after seven and a half years the future would be more of the same until all sensible people have left.
James
"What happened to the 11.47 billion surplus in the 2005-2006 fiscal year", one of your correspondents asks. See, this is the problem - stupid people believe the stupid media headlines and the stupid National Party spin. The 11.47 billion dollar figure includes things like one-off profits from the sale of state assets and money already allocated to things like roads, schools, hospitals, and pensions. The actual figure was closer to 2 billion dollars, but that didn't make as good newspaper headlines or National Party spin. Please, stop acting like sheep and get your facts straight before making such stupid, ill-informed comments.
Murray
I want nothing in the budget. What I want is for this country to get rid of this government and elect a national government with sufficient seats to govern without the pressures of so-called coalition partners. Hopefully whatever Dr. Cullen provides will be the straw that enables my wishes to be fulfilled.
NLJ
Here we go again with people moaning about no tax cuts - are these the same people that complain about increased waiting lists increased doctors bills? It seems quite simple - if you get a tax cut there'll be less money to spend on health, education etc. It is no good comparing NZ to other countries like Australia - why u say? Simple. More population more workers bigger tax revenue. NZ is small so we do not have the numbers to have a wide tax revenue base like other countries. Just be grateful for what you got - you'd only spend the tax rebate on wide screen TVs etc.
Tony
Bye Bye Love, Bye Bye Happiness-bye bye Labour. I am through with love.I am through with Labour.As my earlier remarks 'life's but a dream-michael row a boat ashore.....merry merry life's but a dream.No Cut-No votes.Bye Labour.
Arron
Tax cuts now. All these idiot socialists bleating on about health and education don't realise that if there is incentives to productivity the pie grows larger and there is more to spend on essential services (and I mean essential services not 90 per cent of the pointless bureaucrats currently employed in the public sector). However this government is determined to drive our productivity offshore. Then there will be no money left to give to labour's beneficiaries.
Rufus
So they should, tax cuts barely benefit those on low incomes but substantially benefit those in the higher socio economic brackets, and ultimately only serve to maintain or increase our class separation. National Govts. are quick to herald personal tax cuts, but have substantially failed in social welfare policy in the past. This story is geared to position readers as consumers, not politically mindful citizens, as it serves the purposes of the Herald's advertising clients.
DI
It worries me that Bill English, shadow Minister of Finance, believes that people who are not in the top 10-15 per cent of income earners in New Zealand cannot afford to save ! I am certainly not in that income category, neither do I own my own home (yet) but I certainly save (and invest) for my 'needs' and 'wants'! I am saving for that house deposit, I save for emergencies, I save for yearly car repairs, I save for replacement household goods, and most importantly I save for my retirement investments - since, baring an early death, it is absolutely certain I will need good-sized retirement savings in the future. What is less certain is that I 'need' to buy my lunch and a designer coffee every day at work, or that I 'need' a new wardrobe or expensive vacation this year or next, or I 'need' a new car on HP, or I 'need' new furniture to go with my new house... Thanks to those who taught me 'frugal' and that there is no shame in forgoing immediate consumption gratification. You will have the consumer 'wants' that truly matter to you (without mindless spending) by choosing to save for them - not borrow now and pay later. And at the same time you will be able to save that deposit for a home.Every New Zealander can save money. It's a matter of courage and choice. Wake up and face the truth : No matter how much or how little you earn "desire will always exceed income" unless self control is applied.
Vaughan
I'm keen to know how Cullen expects me to save when I'm already struggling to pay ever-increasing interest amounts on my household debts. Time for these ideological morons to hand over the reigns to someone who understands what it's like to live in the real world.
John
So the Government wont give me a tax cut - something I want and need to reduce my huge mortgage. I shall retaliate by not giving them something they want and need - my vote.
Rachel
I understand the government is trying to keep inflation under control, and control the housing market. Putting more money in people's pockets achieves neither of these things - inflation will only drive housing prices higher. However, I do think NZ needs a large investment into infrastructure being roads, broadband, electricity supply etc. If there isn't going to be a tax cut, the government needs to be brave enough to spend some very big bucks bringing our infrastructure into the 21st century.
Barb
That's right Labour, hammer those last few remaining nails left on your coffin! Do they seriously think they will get in next election? The words "Yeah Right" seem to be appropriate methinks.
Jenna
Why do the government take everything they possibly can but give nothing back. That's not a way to win an election, but would National be any different?
Stanley Kivell
What happened to the 11.47 billion surplus in the 2005-2006 fiscal year. We saw no tax relief from that either. As for KiwiSaver, being forced to join that in order to gain a tax relief smacks of the government trying to monopolize the banking system. The Commerce Commission could do well to investigate this practice.
Kim Hutcheson
$7 Billion cash surplus + no personal tax cuts = bye bye Helen von Clarkskreig and hello John Key!
Peter Thompson
I'd like to see some effort from the news media to cover budget issues in an objective and impartial fashion instead of this ideological crusade for tax cuts as if they were a self-evident right. Tax cuts are a National Party policy, and the Herald does its readers a democratic disservice if it presents the opposition policy as if it were an automatic civic right. I'm no big fan of Labour, but come on, this is political bias! Don't they teach this in journalism school? There is a serious debate to had on taxation, but it needs to be framed in terms of the implications of different policies for NZ. Would I like a tax cut? Yes, but I'd want to know what areas of government spending would be cut as a result. I'd also like to know whether the increase in disposable income would result in increased inflation or borrowing and how this might affect macro-economic policy. If the Herald does not have reporters and editors who actually understand the complexity of these issues and are willing to try and explain them to the reader, then I suggest that the Herald is failing in its function as a newspaper. Of course, if the Herald is merely intended to be a mouthpiece for the National Party, then just carry on- I'm sure John Keys thinks you're doing a great job.
Neil
I fully agree with the Government. I believe we need an across the board tax system and it stays there and cannot be touched. Every bloody election up comes the tax system. Let's get it out of the everyday fighting of governments.Kiwisaver is a goer and the benefits need to be promoted properly. What we need to look at is health and education. One only has to look at the Waikato Hospital. The place is old and had its day. Why not spend money on a new hospital in Hamilton that has easy access and the modern requirements? As for education, the demise of several private training establishments will be felt in the near future with nowhere to go for people with low qualifications. On a recreational aspect our sport stadiums need to be upgraded throughout the country. We all know Aucklanders do not want a new stadium so lets build the bugger somewhere else, maybe Taumarunui and make it an event centre of Kiwiland.
Michael Jones
The creation of the 39 per cent bracket and steadfast refusal to adjust the tax brackets has seen the governments tax takings and spending surge exponentially. We now have a vast public sector that is costing an immense amount to support that spends most of its time enforcing and supporting social engineering policies. The core failing of this spending is that they have steadfastly refused to support any significant infrastructure spending. The net result of this socialist spending policy is we the working class of NZ get the inflation of the spending but not the economic benefit that infrastructure spending would be delivering resulting in negative financial movement making life much tougher for the average working Joe. Lowering the corporate rate but not the personal rate also results in the people who can make use of the tax advantages spending even more money on non-productive expenditure like accountants and legal fees. We should be discouraging this kind of spending and encouraging productive investment. Standardising the tax rates would achieve this.
Andrew Montgomery
The kiss of death for Labour and the New Zealand economy.
Sue Kellett
In the past I voted Labour. But now I am re-thinking which party to vote for next year. It will definitely not be Labour. New Zealanders have been generous with their tax dollars for long enough. It's time for the tax payer to receive some boost in their wages. And that includes for single people with no children. We are supposed to have a surplus lingering about somewhere –don't we? With all that has happened over the past so many years I feel NZers, especially the lower paid, have been unfairly treated by Labour.Petrol prices have skyrocketed. Not a day goes by when we are told of an increase in electricity costs, bus fares, Interest rate increases, Council rates increases etc.In fact I honestly think NZers are amongst the most heaviest taxed population in the world. We are not all born rich and thriving like the politicians on their cushy incomes with perks. Not giving the lower paid tax cuts does not create much of an incentive for people to save for their own home(though nowadays that hope may well be a pipe dream for many.So I thank you Labour Government. You once had my respect and admiration. But now I realise you are only out for Number One i.e Keeping yourselves in power at the cost of the ordinary person(voter).
Shane
If the government is saying no to personal tax cuts because they generally feel that it would put more pressure on our economy then that is fair enough. However it is my view that they are simply delaying tax cuts so that they can be bigger in election year, which is a real shame for those families who are struggling to get by now. Is it not possible for government to lower taxes but at the same time provide greater, more effective saving schemes so that spending leaves remain constant?
Michael Kingston
I have in the past been a long-term Labour supporter but no longer - given recent rates raises as well as water rates and the general cost of living in Auckland (which are way over the current rate of inflation). How can the government expect those of us on a middle income save any money?? No tax cuts for us yet the Government is sitting an obscene $7 billion cash surplus!! I find it hard enough living from month to month when unexpected bills like dental and vet bills cost so much. Labour - wake up and listen otherwise you will loose your supporters.
Allan King
One good way of loosing an election is to screw the voters year in and year out. People should not fear Governments, Governments should fear the people.
Mary
A suggestion to curb spending and give people an incentive to stay in NZ, is to raise the GST to 15 per cent, while at the same time give tax cuts to all income earners.
Goby
Give us our money back!
