Let Them Eat Cake!

What is this government saying to families on low incomes in today’s budget?

Let them eat cake!

It says ‘don’t worry about an increase in GST and rising food prices, because the rich eat more than the poor, so they’ll pay more in GST.’

Is that meant to make low income families feel better?

You might not be able to afford to buy much food - but just think of the GST you’re saving when you don’t eat?

The rich have a choice if they want to spend more money and pay more GST. They can choose whether to upgrade the Mercedes or buy another boat. Those on lower incomes can’t choose whether or not to eat.

What is John Key saying to New Zealand families struggling to pay the bills and make ends meet on low incomes? Stop being envious.

Well they won’t be envious Mr Key, they’ll be angry - like I am.

Are New Zealand families more or less equal after this budget?
They are less equal - and shame on the Prime Minister. After today’s budget the most wealthy New Zealanders will take home thousands of extra dollars per week compared to those on average incomes.

People like Telecom’s CEO who earned $7 million last year will get a tax cut of $6,608 per week. State sector CEO’s who earn more than $600,000 in some cases, will get a tax cut of nearly $500 per week.

If you’re earning $50,000 after you pay more in GST at the supermarket, you’ll only take home $5 per week. And the chances are - that will be wiped out by inflation anyway!

Is a CEO who got a thousand dollar a week pay rise last year, really the highest priority for a seven hundred dollar a week tax cut this year?

New Zealand is now on a par with the UK which has one of the most entrenched income gaps between rich and poor.

Our ancestors came to this country to get away from that inequality! John Key is determined to bring it back with him from his years speculating overseas.

Others might be taken in by the Prime Minister’s ‘rags to riches’ story. Not me.

I remember he helped people make a pot of money speculating against the New Zealand dollar in the 1980s, at a cost to New Zealand of $700 million. Guess what? At the same time, New Zealand’s increasing rate of income inequality became one of the worst in the OECD.

Over the same period, Australia closed the gap between rich and poor. Income inequality widened again under National governments in the 1990s. And it started to get better during the period of a Labour-led government in 1999-2008.

Mr Key mis-led the House yesterday when he said - and I quote - “income gaps between rich and poor...became worse under the previous Labour Government".

No Mr Key! It became better, and is set to become worse again under this National government. (And today I’ll table the facts to prove it.)

Here they are. Under a Labour-Progressive government between 2001 and 2008 everyone became richer - even people like, Mr Key.

But those on low-middle incomes increased their wealth the most, thanks to the Working for Families tax break. We closed the gap - National is widening it.

The Prime Minister also said yesterday that it was a terrible injustice that 10% of the wealthiest New Zealanders pay 44% of the tax. What does the Prime Minister think they do in Australia? 10% pay 46% of all tax!

Turns out that’s what most countries do. Those who earn more, pay more tax, because they earn a higher share of the income. It’s a fair tax system.

But John Key is no Robin Hood. More like the Sheriff of Nottingham, looking after his own.

Will the average New Zealander be better off after the Sheriff’s budget? No.
Because they’re not getting the lion’s share of the tax cut. Guess who got the lion’s share from the last round of tax cuts? The same top earners. Has the penny dropped yet? If people are not on a high income, this government is not going to help.

Some might have voted for them in 2008 - but they can make them a one-term government in 2011. The first since 1975 - and good riddance. If they’re on an average income but had aspirations to do better - forget it.

This is a budget that puts reinforced glass into the glass ceiling.
This government is showing its true colours today. It doesn’t want all our people to prosper. It wants them to know their place.

Will there be more children lifted out of poverty after today’s budget? No.
A recent UNICEF survey of the well-being of children puts New Zealand almost last - 24th out of 25 countries. It measured immunisation levels, infant death and early death from injury and illness.

Greece’s economy is collapsing and the streets are on fire as people protest - but they’re way ahead of New Zealand when it comes to looking after children!

Here’s what a respected Professor of Epidemiology in New Zealand said recently “In New Zealand, social injustice is killing and maiming our children on a grand scale” We top the scales for OECD rates of whooping cough, rheumatic fever, pneumonia and other diseases in children.

We spend less than the OECD average on child health, and the only thing that will change as a result of this budget is that this appalling situation will get worse.
28% of our children still live in poverty.

That rate started to decline under the last Labour Progressive government for the first time in decades. Working for Families lifted about 100,000 children out of poverty.

Senior people in the medical profession know what the problem is - and they know what the answer is. The politics of inequality.

Why do we have such high rates of child illness and death? Poverty. And how do you get rid of poverty? You increase people’s incomes, give them decent wages and jobs.

Will there be more jobs after today? No.
There is nothing in this budget to create new jobs. Our unemployment rates have ballooned since this government came to power - to over 7%.

The National government can’t blame the recession. Because at the same time, Australia’s unemployment has dropped to just over 5%.

How many jobs has John Key’s cycle way created so far? None!

What about the nine day fortnight? It was meant to save thousands of jobs - but didn’t.

New Zealand doesn’t have a tax problem - it has a wage problem.
National has no plan to increase wages. If John Key thinks that cutting the top tax rate will stop young doctors or entrepreneurs going overseas, he’s dreaming. Australia’s top tax rate is 45 cents in the dollar - much higher than New Zealand’s.

New Zealand’s tax system compared to the rest of the world has been one of the most progressive for average income earners, according to a recent OECD report.

John Key should ask himself why he left the country to go into the world of international speculation. Did he leave to avoid our high taxes? I doubt it.

I’m sure he left because he could earn more overseas. Tax cuts for the wealthy won’t increase the wage packet of ordinary New Zealanders.

Will the economy grow as a result of the Sheriff’s budget today? No.
There is nothing in this budget to increase our exports.
Nothing to encourage us to save.
Nothing to grow the economy.
No new ideas.

The wealthy few who get a hefty tax cut today will most likely invest the extra cash overseas.

Where’s the money for science and research & development?
John Key has scrapped the $2 billion worth of spending on R&D that we had set aside under a Labour-Progressive government. And what’s he replaced it with? A science advisor and a few ‘vouchers’.

The whole package, including the new vouchers in the budget amount to less than 26% of what business and science would have got under a Labour-Progressive government.
Does this anti-science government think that new technologies will just appear out of thin air?

In the meantime, will most New Zealanders pay more? Yes.
The larger the tax cut National gives to the top income earners, the smaller the amount left over for people on the average wage. Someone has to pay.

More GST at the shops.
Increased property tax will increase rents.
More at the petrol pump.
More for power bills
More for ACC.
More for student loans.
More for early childhood education.
This is not a budget for hardworking New
Zealanders and Kiwi families.

Some voted for this government because they thought the Prime Minister’s ‘rags to riches’ story might rub off on our country.

But it turns out Robin Hood is really the Sheriff of Nottingham with a false smile - and the message is clear.

‘Let them eat cake!’

This budget is a disgrace and this parliament should be both ashamed and angry to receive it.

ENDS

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