Bill English’s Campaign – It’s A Bit Of A Flutter
Bill English’s Campaign – It’s A Bit Of A
First published on
Faced with dire poll results, National leader
Bill English chose the Sky City Casino complex in central
Auckland to announce that he would campaign on a gamble… to
deliver tax cuts for wealthy New Zealanders.
On Friday morning last week, National learnt
that the National Business Review-Compac poll had its
support slumping to only 28 percent. The 25-point gap
between National and Labour is the widest since the NBR
started the poll over ten years ago.
Based on the
results of the poll, the Labour would have won 69 seats in
the House (an increase of 20 seats). National would have
won only 36 seats (a decrease of three seats). National’s
three lowest ranked list MPs – Alec Neill, Arthur Anae and
Marie Hasler – would be voted out of parliament. The
majority for the centre-left over the centre-right would be
The news for National is even more
disastrous when it considers where it is losing support.
National’s support among voters in the $50,000-70,000 income
bracket, once a rock-solid bastion of dependable support for
the party, has slumped to only 26 percent.
tax-cut bribe will be targeted at wealthy voters and
corporates. The cost will be in excess of $1.6 billion.
The net effects of National’s bribe are both significant and
To his credit Bill English announced that
the tax cuts would be funded because “it is not committed to
the Cullen fund”.
English is right. The tax cuts
for wealthy New Zealanders can be funded. But they can only
be funded because National would abolish the Cullen fund,
more appropriately known as the superannuation fund.
This means that National will abolish the fund that
has been set up to help offset the cost of future
superannuation. The government is setting aside money and
invested to help ‘pre-fund’ superannuation. The policy is
far-sighted and responsible as it guarantees that money will
be in the kitty to help pay for the pensions of elderly
people and baby-boomers well into the future.
a good idea that will benefit elderly people? Apparently
not according to English who has spent the best part of 12
months rallying against the initiative to pre-fund
superannuation and the guarantee of a pension for our senior
Elderly people have had nothing but bad
experiences of the National Party. The party’s
determination to be stick to the’ tax-cuts and narrow
government mantra’ saw the Shipley-English government cut
superannuation during the 1990s.
At National’s 64th
annual conference in August 2000, delegates voted against a
remit to ensure that “the level of payment be enough to
enable the elderly to live with dignity”.
previously described the superannuation fund as “clapped
out” and is reported to have said that guaranteeing
superannuation well into the future is “not prudent”. So it
should come as no surprise that National is now not prepared
to maintain the means of paying for New Zealand
superannuation if it wins the next election.
National’s decision to abandon a credible commitment
to fund the superannuation fund risks the odium of elderly
voters, that’s a vital vote if you want to win provincial
seats like Tauranga, Whanganui, Otaki and Whangarei.
But then National’s tax policy effectively draws a
line in the sand and says, “go away old people, we don’t
Instead National wants the $50,000-70,000
income bracket firmly back in it’s camp. A support rating
of 26 percent is simply not good enough. National wants to
double that number and quickly too. That’s why it is
prepared to waft the promise of tax cuts in front of the
nostrils of wealthy voters.
It’s a cynical plan that
is full of assumptions and risks.
assuming that voters will be seduced by tax cuts. This is
highly dubious when one considers that Labour campaigned on
a promise to increase the top marginal income tax rate and
won the last election. Voters appear to favour paying more
to fund a greater level of government expenditure on health,
education and the police, as opposed to tax cuts for wealthy
National is assuming that it can survive the
odium of the elderly. I have some sympathy for National’s
strategists on this point. English himself recognises that
National’s legacy of broken promises and pension cuts has
effectively burnt many bridges between the party and elderly
voters. But a sour relationship with one group of voters –
arguably a group that needs more attention than most – is
not the basis for making informed policy decisions.
National is assuming that operating lower surpluses
to help bankroll ongoing tax cuts will be acceptable to the
financial markets. Actually the policy will almost
certainly spark a new round of interest rate rises as the
fiscal policy of a National-led government is adjudged to be
loose and scatter-shot.
Low interest rates over the
past two years have equated to significant savings for
families living in the suburbs of Auckland and Wellington.
Their expensive first home purchase costs less because of
low interest rates. That’s money in the bank for families
who need it most.
National’s scatter-shot approach to
fiscal policy would spell the end to low interest rates. As
rate increases set in, the cost of owning a home becomes
more expensive. That’s a dire prospect for homeowners who
would suddenly face higher mortgage repayment costs.
National’s decision to embrace tax cuts for wealthy
New Zealand is not an economic policy decision, it is a
A political party that aspires to
be in government cannot go into an election trailing the
majority governing party by 25 percent. That is why
National is trying to take action to reverse the growing
divide between it and the Labour Party.
ascended to the leadership and talked about investment in
health and education as a priority ahead of tax cuts. His
caucus has rolled him. The neo-liberal dries are committed
to tax cuts first ahead of an investment in social services.
The size and scope of the tax cuts is not
significant, but it is symbolic. National’s decision
represents a tangible expression of its interest in the
wealthy elite rather than the wider community. That is why
the tax cuts are small and targeted.
pollsters know that the collapse in support for that party
among voters in the $50,000-70,000 income bracket threatens
to cost it precious seats at the forthcoming election. This
week’s cynical ploy to offer wealthy voters a tax cut (to
the detriment of health and education, the police, the
elderly, and first home buyers) is a calculated gamble to
‘stop the rot’ and reverse National’s flagging election
Bill English will gamble on a promise to
give himself an extra $120 a week. How apt that he
announced this initiative in a casino complex. First
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