Justice

Tax cut proposal a vote losing mistake

By Ant / 11 February 2008

We heard recently that Michael Cullen has announced Labour will introduce tax cuts.

That was very welcome news, for some. The biggest concern, according to TVNZs National leaning reporter Guyon Espiner, seemed to be that ‘business leaders’ were frustrated there weren’t more details.

But, not for the first time, he’s wrong.

Evidence of economic turbulence and slowdown is everywhere. Arguably, tax cuts would enable business to still turn a profit, and if business can remain buoyant then it can help to prevent the economy from going belly up. That’s the theory. But in a global economy, particularly one in which most of our business is done overseas, and most of our products are manufactured overseas, whose economy do tax cuts really assist?

All that aside, he’s wrong because businesses concerns are not the biggest concern.

The biggest concern is why Dr Cullen would be as irresponsible as to propose tax cuts as some kind of reasonable and serious policy decision from this government. Tax cuts, by definition, favour the wealthy. The more you earn, the more tax you pay. So those with little, gain little. That’s all pretty obvious – and if the desire of this government is really to give a ‘hand up’ those ‘at the bottom’ (that is, the people others might less generously call the victims of the violence of growth based wealth acquisition by the few), then it’s frankly a travesty.

And let’s not forget whose money he is spending in this act of benevolence.

A far better use of our hard earned money would have been to take a politically brave, rather than a politically correct decision to introduce something that would truly create a better country for us to live in – something like a universal child benefit. According to most research, its introduction is the most effective way of addressing the ‘statistical tail’ of poverty. The Government are very well aware of this, having been briefed by those senior in UK research – but they’ve obviously decided it’s a less expedient thing to do in a ‘difficult election year’.

I say, for what it’s worth, they should be prepared to go out on a high note – a note that captures the public imagination and makes a real and significant difference to the whole of our country…who knows, people might be so inspired they may even vote for them!