National's economic treason | The Jackal

1 Apr 2012

National's economic treason

Today, the NZ Herald reported:

It is clear now that the Government has effectively cut the income tax rate and paid for it by borrowing money overseas, in large part from China. It is an act of economic treason and generational selfishness when a government has decided an already-wealthy part of the population deserves higher incomes paid for by loading foreign debt on future generations of taxpayers.

The charts reveal the results of the cut in the income tax rate from 39 to 33 cents, which was in theory partly paid for by an increase in the GST rate from 12.5 to 15 per cent. They also reveal a massive reversal in a decade-long trend of improvement in New Zealand's public debt position.


A collapse in the corporate tax take is only partly responsible and is largely due to the recession rather than any change in policy. It is now rebounding but the tax-to-GDP ratio is worsening.

This is unsustainable without an immediate and extended surge in economic growth, which few expect.

Voters will have to repay this debt in decades to come. Why are they not revolting at this national act of selfishness?

Bernard Hickey is absolutely correct. The National led government have in fact increased government debt by over 190% since they gained power in 2008, and the wealthy have simply been living it up instead of reducing their private debt.

National's economic bungling will undoubtedly cause problems for New Zealand for decades to come.