To me the most telling thing about this budget is English’s decision to tax employer contributions to Kiwisaver. Why is the Finance Minister increasing taxation on savings when the ongoing crisis crippling our economy is our private debt and inability to save? Maybe he has some technical, policy-based or even ideological reason, but I’m pretty confident it’s simply because he desperately, desperately needs the cash and this is a nice, covert way to extract it without anyone noticing. He could just raise income taxes or corporate taxes a fraction – but then the opposition would make fun of him, and Dr Brash might write him an angry letter. So instead we get fiscal policies complicating the taxation and savings regimes, purely because the Finance Minister won’t swallow his pride.
The other signature policy is the decision to move the liability for KiwiSaver employer contributions for public employees onto the departments that fund them. It’s just a shell game that lets English and Key force HUGE cuts onto those departments – but the total funding level is still the same or higher! So they can make massive cuts and still stand up in Parliament and say they’ve ‘increased funding’ in those areas.
National used to accuse Labour of ‘government by spin’, but at least there was some level of basic governance happening.