Thursday, October 9, 2008
National’s 'Mug Paul to bribe Peter' Tax backlash, Unions and more secret cocktail recordings
Nats' tax policy hits low-income savers
National is courting a tax policy backlash, with KiwiSavers on low incomes set to be worse off by up to $25 a week under its proposals - making the slog of saving for a house deposit or retirement harder. The party is receiving a cool response to its package, as the full effect for low-income KiwiSavers sinks in. This includes its move to match no more than 2 per cent of a worker's wages with government subsidies worth up to $20 a week. While all workers in KiwiSaver would be worse off, those earning up to $40,000 a year with a family and paying 4 per cent of their wage into the scheme would suffer a double whammy - less in their pockets and a much lower government subsidy. National leader John Key hit the campaign trail yesterday to sell his tax package, but had to fight off fresh controversy as more secret recordings surfaced. Deputy leader Bill English was recorded telling National Party delegates: "Winning is fantastic. Nothing beats winning in politics, despite all our highly principled statements. It's fantastic ... do what we need to do to win."
You can see the naked flame of ambition burn brightly there with Bill English can’t you, not principle, not doing good – WINNING is everything, he doesn’t sound like he wouldn’t sell Kiwibank does he. I can’t wait to see what they have on John Key from that cocktail party, meanwhile the Unions are starting their attack run…
Unions fear KiwiSaver snag
National's proposed changes to KiwiSaver could give employers an opportunity to cut wage increases and use the money to pay their contributions to the scheme, unions and employment specialists say. National wants to repeal legislation introduced weeks ago stopping employers from paying staff who join KiwiSaver less than colleagues who don't. Labour Minister Trevor Mallard introduced the changes after reports that some employers were docking pay to cover the compulsory 1 per cent contribution, while pocketing tax credits the Government gives to cover the contribution. National has said it would let employers give an equivalent pay increase to their non-KiwiSaver employees and leave it up to employers and employees to negotiate a deal in good faith as long as it met the minimum requirements. It would also amend the KiwiSaver Act to make it clear no employee could have gross taxable pay reduced because they had joined KiwiSaver. But Simpson Grierson employment specialist Samantha Turner said it was not clear how National would stop employers reducing pay increases to pay for KiwiSaver contributions. Council of Trade Unions chief economist Peter Conway said the proposed changes would result in workers paying for the employer contribution by forgoing wage rises. "While they can't cut somebody's pay, it will mean employers can say 'I won't increase your pay because I'm going to have to contribute 2 per cent to KiwiSaver'."
So not only will National Tax Policy hurt those on the lower rungs of society, Kiwisavers on low incomes, it will allow Employers to bypass wage rises to put their compulsory component into Kiwisaver instead. But much, much worse than all of that is the simple fact that National’s tax policy won’t do a damned thing long term for the country…
National claims its tax package will stimulate the economy in the short term and improve incentives and drive growth in the longer term. The first claim is plausible, the second not so much.
National's plan won't do a thing to prepare NZ for the possible fallout from this corporate finance meltdown. More tax cuts have to come from somewhere - and attacking the savings system of New Zealanders is an atrocious thing to do when our history of saving has been so poor, it is the exact wrong thing to do, consumption by credit has become the cause of the meltdown we find ourselves in now globally and National want to make that consumption easier by lowering the threshold of saving so people can use that money on those increasing credit card repayments, energy cost increases and record high food prices. Suggestions that National is 'allowing' desperate people to reinvest their tax cut into Kiwisaver seem to ignore how tight the reality of everyday living is for many NZers, they won't re-invest that money they will spend it, with leaders hoping that more consumption will stoke money flow within an economy that has lost the one thing capitalism needs for survival – trust. With banks not trusting eachother because of insidious Enron-esq financial structures that are all now crashing they aren’t lending to eachother without a big promise from the Government. This has been exacerbated by a super deregulated industry fuelled by corporate greed, incredibly these pirates will walk with the private gain while society will pay the public cost, yet we spend so much time fixating on the gangs when it’s these white collar criminals who should be made to feel the full force of the law.