Two articles in the Weekend Herald highlighted the stark difference between the left and the right when it comes to looking at tax. One article was written by Thomas Coughlan and the other by Steven Joyce. One talked about introducing a new tax; the other concerned cutting the existing ones. There are no prizes for guessing which was which. Elections are decided by swing voters and it is a source of fascination to me that the Labour Party think they can attract a majority vote by threatening to rob Kiwis of more of their hard-earned money.
I have yet to meet an intelligent person who is overjoyed at the prospect of handing more money to the government – particularly a Labour one, where there is a very high possibility of it being wasted. The last six years of Labour taught us that (not that most of us needed the lesson). Wasting money is in Labour’s DNA. They are obsessed with tax. Their entire vision, their whole sphere of economic thinking, never goes beyond raising taxes. They seem to think there is no other way of raising the extra money required to satisfactorily implement government services.
This goes to the heart of why you never put Labour in charge of the economy: they lack vision and are bereft of ideas apart from stealing from your pay packet. Which brings me to Coughlan’s article. Labour is having the first of its regional conferences this weekend and what do you think is up for discussion? Again, no prizes for guessing. Just look at Coughlan’s headline: Labour Choices: A Tax…or a Tax… or Nothing. Tell me how that headline is going to attract the swinging voter.
So Labour is going to spend time agonising over the most palatable way to further rip you off. No other ideas appear to be on the table. If there are any, Coughlan is not privy to them. Will it be a capital gains tax, will it be a wealth tax or will it be raising the GST on fruit and vegetables? These are big issues they have to decide on! Coughlan illuminates on the pros and cons of each, which I won’t bore you with. It is truly pathetic to think that these people represent the main alternative to the present government.
Which brings me to Steven Joyce’s article, headlined The Case for Tax Cuts – Let’s Give Kiwis Some Hope. That headline is far more likely to attract the swing voter. Joyce says to achieve economic growth, we need to increase rewards for working an hour, for investing another dollar or hiring another worker. He says we won’t do that by simply declaring higher nominal wage rates (to be eaten up by inflation) or by slugging people with higher and higher marginal tax rates.
According to Joyce, we do it by letting people keep more of what they earn. He says it is only by growing faster that we can afford the infrastructure, the public services and the lifestyle we aspire to. But, he writes, it’s more than that. If we don’t give the people with get up and go more opportunity to get ahead in New Zealand, then they will get up and go to somewhere more welcoming. He’s right and that is exactly what’s happening now. As we have seen before, a Labour government results in a mass exodus of those we can ill afford to lose.
And we have Labour, this last weekend, discussing the best way to sting workers, small business owners and entrepreneurs even more. This will do nothing to increase personal wealth or productivity. Productivity results in prosperity for everyone, which is the very opposite of taxing the rich to help the poor. The former sees everyone richer while the latter sees everyone poorer. The left seem to lack the mental capacity to get it.
If Coughlan is correct about the discussions on Saturday then Labour will be no nearer the government benches than it was on Friday. That is the one bright spot in their whole sorry and lamentable situation. Hipkins has presented his vision for the country under Labour through to 2040, but there’s little point in detailing it as it’s hardly changed from what it was before the election. He says the current government has no vision – that’s a laugh. He’ll add value to milk, build all the houses he failed to last time, sock it to the landlords and we’ll all be on a bus or a bike.
Ironically, just below Coughlan’s article was a half-page advert for the Mike Hosking Breakfast show. That man wouldn’t agree with any of what was written above him, neither would most of us, including the swing voters. Here’s the lesson Labour needs to learn: you don’t win elections by robbing Peter to pay Paul. You do it by incentivising people to work harder, thereby increasing productivity and wealth. That includes cutting taxes, getting the minerals out of the ground and thus increasing exports, not to mention keeping the lights on. And we need to be on a fast track.
