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Newsworthy - National tax policy 26 August 2005

26 August

Newsworthy - National tax policy

In a special issue of this newsletter on Tuesday the detail of National's tax policy was set out. Interestingly the National Party website to calculate the tax cuts on offer had one million hits within 12 hours of the package being announced.

The huge interest suggests voters are weighing up the policies of National and Labour before deciding how to vote.

Power corrupts, and absolute power corrupts absolutely So said Lord Acton in a statement that has relevance more than 100 years later to the coming elections.

The electorate has to sort spin from substance. It is a remarkable turn of events that on 3 August, the New Zealand Herald reported the following: 'Helen Clark and Dr Cullen confirmed the Treasury would not be costing the (Labour student loans) policy because it was Labour Party and not Government policy'.

And on Monday Helen Clark repeated that in the Leaders debate - 'we don't ask Treasury for permission for our policies'.

Now Dr Cullen claims the loans scheme was costed by Treasury, twice, although he won't release the papers.

Poppycock Mister Cullen In a recent speech, Finance Minister Michael Cullen declared that it was a "myth" that taxes are high in New Zealand and that "if anyone tells you that Australians pay less tax, your best response is: baloney".

He is wrong.

The ratio of government spending to GDP is the best measure of the overall tax burden. Deficits and surpluses tend to balance out over time, and most of what governments spend must be raised in tax.

On this basis, overall tax burdens are lower in Australia. The OECD's December 2004 Economic Outlook forecast that spending by governments at all levels would total 35.8 per cent of GDP in Australia and 38.7 per cent in New Zealand in 2005.

An alternative measure is overall taxation. On this basis, accounting firm Staples Rodway calculated that Tax Freedom Day came 7 days earlier in Australia than in New Zealand this year, meaning that the tax burden is 5 per cent higher in New Zealand.

These approaches avoid the problems of comparing the different features of the two tax systems, including different bases and rates for income tax and GST.

Old wine in new bottles Labour's election pledge on health is nothing more than blatant window dressing - reannouncing funding that had already been committed.

Labour pledged on 16 August 2005 to fund 7,500 extra cataract operations and 10,000 extra joint procedures over the next three years, costing $200 million.

But in Budget 2004 and Budget 2005, Labour committed a total of $182.8 million for orthopaedics funding and cataract funding.

Voters are being treated like fools by pledging money that had already been announced.

Labour has increased New Zealand's health budget by more than 50% - from $6.1 billion to $9.7 billion in the six years to this current 2005/06 year. That funding has done nothing to improve the productivity of the health system. Do not Split vote in Epsom Many constituents are being telephoned on behalf of the ACT Party asking them to give their personal vote to the ACT candidate in Epsom.

To do that is to split the centre-right vote which will only advantage Labour.

The safe course for voters who wish to change the Government is to tick National twice - to party vote for National and to vote for me as the continuing MP in Epsom. If voters are determined to split votes, then they need to realise that the Party Vote is the critical vote under MMP.

In an earlier newsletter No. 31 I made the point that in 2000, 95 per cent of the party votes influenced the composition of Parliament. If National gets 40 per cent of the party vote and no electorates, we get 48 seats in Parliament; if National gets 40 per cent of the party vote and 20 electorates, we still get 48 seats. That is why the party vote is so important. Young Nats Website The New Zealand Young Nationals has unveiled a new-look website.

The website at is a key tool in communicating the Young National's messages to voters and Party members.

Political Quote of the Week "The important thing for Government is not to do things which individuals are doing already, and to do them a little better or a little worse; but to do those things which at present are not done at all" - John Maynard Keynes - English Economist 1883-1946

26 August 2005 No. 43

Upcoming Public Meetings Sunday 28 August at 5.30pm Politician Sunday at Eden Assembly of God Church - 1 Taylors Road - Mt Albert Saturday 3 September at 3.00pm Consortium of Tamil Assns in NZ Public Meeting - Mt Roskill War Memorial Hall - 13 May Road - Mt Roskill Monday 5 September at 7.00pm Candidates Meeting St Michaels Church - 6 Beatrice Street, Remuera Tuesday 6 September at 7.30pm Greenlane Christian Centre

- Election Debate - 17 Marewa Road - Greenlane Tuesday 13 September at 12.30pm Newmarket Business Assn Candidates Debate - Newmarket Club, Teed Street - Newmarket Upcoming Events 26 August "Wrapped" Exhibition - Korean textiles from the Choson Dynasty in Hamilton Launch of Smarter Systems for a Greater Auckland 27 August Eden Roskill RSA Market Day Chinese Painting & Calligraphy Arts Assn Members 2005 Chinese Painting & Calligraphy Exhibition Opening Tri Nation Rugby Series - New Zealand v South Africa in Dunedin 28 August Auckland vs Southland NPC rugby game at Eden Park

30 August Start of construction on SH 20 Mt Roskill Extension 2 September 60th anniversary of National Day of Viet Nam reception Westfield Style Pasifica 2005 Launch of "For the Sake of our Children" initiative 3 September Beijing Chamber of Commerce (NZ) and Beijing Fellowship Assn (NZ) Opening Tri Nation Rugby Series - New Zealand v Australia in Auckland

4 September Mt Eden Young Artists Award Opening Auckland v BOP NPC rugby game in Tauranga

7 September Home & Family Society opening of renovated premises 183rd Anniversary of the Independence of Brazil 8 September VIP Night Auckland Central Gang Show

Richard Worth

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