We won, Labour lost, the tax cuts will help us win again – and the Maori Party has been kaiboshed

Alf enjoyed the stuff John Armstrong has written in the Herald today.

Armstrong reminds us – in effect – that a Budget above all else is a political document.

Accordingly –

Yesterday’s Budget was the first salvo of the 2011 election. It was all about shutting Labour out of next year’s contest, long before the campaign starts.

Yep. And Alf enjoyed watching the Labour buggers wriggling uncomfortably yesterday as they sensed the political implications of the Budget speech.

Betcha they were contemplating another three years on the carping side of the chamber.


As Armstrong puts it –

For National, it was a matter of unfinished business after last year’s postponement of the party’s second and third round of tax cuts because of the global financial crisis.

It has turned those muddy economic waters into wine by constructing a clever package of significant tax cuts when the Government’s books are written in deep dark red.

Doing that required finding revenue from elsewhere – tightening tax rules for rental property investors and depreciation, and stopping the wealthy rorting the Working for Families programme.

These changes give some justification to Bill English’s claim that his package amounts to the biggest overhaul of the tax system in 25 years – and one widely welcomed outside Parliament

The Maori Party is forced to vote for the GST increases under its confidence and supply deal with National.

Its policy is to have essential foods excluded from GST, not to have the sales tax on tucker increased.

Ha. You could say they have been kaiboshed.

But it was Labour’s discomfort that cheered Alf most.

Armstrong was smack on the button when he observed –

By cutting the 33 per cent tax rate to 30 per cent and the 21 per cent rate to 17.5 per cent, National has gone some way towards rebutting Labour’s “tax cuts for the rich” charge, at the same time invading territory where Labour should hold sway.

National is now camped around the $40,000-a-year salary level – roughly the boundary between low and middle-income earners. It is the point at which National’s tax cuts become more meaningful in dollar terms each week.

Those on $40,000 will get close to $10 extra a week once the rise in GST is taken into account. That extra increases to about $25 at $80,000 and more than $40 for those on $100,000.

Labour will now have to really soak the rich to bolster those at the bottom end of the income scale, where its core vote resides, and still be able to outbid National in the middle.

What was it Michael Cullen once said?

Oh yes, “we won, you lost, eat that.”

To be fair, David Farrer put the record straight and tells us Cullen said: “We won, they lost, let’s do lunch”.

The first media reports of it were some days later.

No doubt the hacks got it wrong, but the way they misreported the remark neatly sums up Alf’s view of the political landscape this morning.

There will be drinks all round, when he arrives at the Eketahuna Club this evening.

One Response to We won, Labour lost, the tax cuts will help us win again – and the Maori Party has been kaiboshed

  1. With the current number of foreclosures, a lot of people ask, “Where are properties for back taxes in my area?

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