KEY POINTS:
Finance minister Michael Cullen has stepped up the war of words over tax cuts accusing National Leader John Key of wanting to take money from working families to pay for tax cuts for "his rich mates".
This forum debate has now closed. Here is a selection of your
views on the topic.
Ms Auckland
There's absolutely nothing new under the sky that National wants to help all their rich supporters, and gain yet more of the kind, by proposing that the rich pay less taxes and not contribute to the common community box at all. Most of National's supporters wish all the benefits a nation can provide them with but object strongly to contribute to it themselves. That's called ugly selfishness. And, if selfishness wins ordinary and poor people and families will suffer yet more as will the entire nation. Just look how bad it is in e.g. the USA, which is ridden by extreme poverty and extreme crimes, because the divide in the US between the rich and poor is so huge. Thus, say no to National's extreme and shameful selfishness and yes to a united and peaceful nation that works for a common goal. That's called community spirit, in case National's John Key and his mates have never heard of it. Because to turn New Zealand into a South Pacific Mini-USA is a gross mistake from which no one will benefit - least of all National.
Jason from Auckland
Dear Frank, the Australian govt has long given families more. It is a simple mechanism to tax families less. Unfortunately for simplicity it seems they cannot just tax less but have to tax it in the first place then give it back. Oh and the $1000 handout for participating in the Kiwisaver - Australians get $5000. Again NZ is behind the times in modern day norms. Perhaps Frank you should have children and watch your $400k disappear into vapour. Oh and dont forget it costs up to $50K per child to go to uni here now.
Pete
The current welfare system ensures you get a lot of dependants (voters) who don't wish to lose the current top up. I know two families who get top ups both have just brought rental properties, I might add that they both have company cars and do not pay for petrol or other running expenses, now with there rentals they can lower their taxable income and get a bigger payout. Time for Clark and Cullen to go.
NeillR
"Dr Cullen said: "Mr Key is saying 'well lets take some money off ordinary, average Kiwi families and spread it across the board to everybody including those that are very well off'." Yet Cullen has given a tax break (Working for families) to people earning up to $139k, just because they happen to have children. What a distorted view of the world he has. Surely it would be better for someone on $60k without kids to get a tax break compared with someone on $139k with children?
Frank
It seems from afar that NZ is rapidly becoming a centralised & socialist welfare state under Labour - did I read that right that 70 per cent of families require some kind of handout? That is a pretty sad state of affairs that seems to have been manufactured by Cullen and Clark. Over here in Britain - the voters are realising that 10 years under Tony Blairs Labour Govt has been a waste of time, and now its time for NZ'ers to see the light as well. I am a young (30), well educated (put myself through uni), hard working kiwi male. I was looking to move back to NZ soon and bring back approx NZD400K with me. I am looking at starting a business and employing people and positively contributing to society and the NZ economy. However, if I am going to be punished for this (and categorised as one of 'Key's rich mates') then I will be getting off the plane one stop early....on the other side of the Tasman. It's time for Cullen and Clark to go and for NZ to move forward - not backwards.
Sarah – London
I am a proud New Zealand currently living in London. After reading these articles I feel no desire to come home. I was planning on returning in a couple of years but unless there is a change in the next election I'm probably better off over here!
Richard Z
See ya Michael. Time for you to go out to pasture, you know, that green stuff that grows on the ground and generates 80 per cent of our export earnings?
Mick
For young people, the world is their oyster. And the reality is that while NZ offers a great lifestyle, it is really lacking in growth and prospect under the current way of running things (I personally sympatise with the businesses here and the regulations that they have to cope with, bearing in mind there's more to come). With house prices so high and earnings so low, tax cut is but a little incentive to retain skilled people in the country. It won't take much to convince a young graduate who's starting up in life, that opportunities are better in Oz. Better pay, advancement opportunities, training...and ah, good ol' tax break. Don't forget, about 1 million Kiwi is currently living abroad. What does that tell us?
Angela Paul
As I see it, tax cuts are of little use to anyone but the wealthy. Those on low and middle incomes would gain very little, less than they do now with WFF. Why call this 'welfare'? What nonsense. Isn't it just another form of tax cut? Both options give us more money in our pockets. So, really, apart from the actual amount, both are welfare and both are tax cuts, depending upon your perspective. Why shouldn't those on low and middle incomes get some of their tax payments back? Why disparagingly call it 'welfare'? It's a badly needed filip for low and middle-income earners. They are the ones who are most in need of it, living, as we do, in a low-wage economy. I agree with John Key's idea of cutting WFF for the well-off. They don't need it. Leave it for those who do! WFF gives me more money in my pocket than some piddly little 'tax cut'!
Frank (Sunny and busy Queensland)
You get (envy) taxed to the max and when you loose your job in yet an other "restructure", then the only safety net available is a one way ticket to Australia. Maybe it is time that all "high income" people leave NZ. That will for once and for all stop this dumb debate.
Charles
By making families with children Welfare Beneficiaries, Cullen has placed a political mill stone around the necks of future Finance Ministers, which was the intention. Key has the honesty and guts to abandon this quite deliberate targetted bribe and to reward those through cutting taxes. Why should those without children be penalised?
Ken
I do not want to pay extra high tax then receive some of it back as a welfare recipient.This seems pointless and demeans me!
Rachel Macdonald
We both work, and our incomes are't great, and we have two children. And from what I have in the past worked out from the Government website, we don't qualify for the Work Income break that Labour keeps advertising. We can't save. We borrow. And we budget absolutely. For us, a tax break would be like a gift. If you commit all your income to the household - both being self-employed – there's nothing left, so a tax break is ideal. Let's look at Ireland. Pay as you earn. At the moment, the two of us pay income tax, GST and ACC, as well as the essential insurances - all of which are income-assessed. How much does that leave you for a family in the end?
Heather
Under the WFF, you qualify if you are earning $60,000 and have a kid. I only dream of earning that much money!! Oh wait, I'm single...therefore according to Cullen, I'm rolling in it and/or not worthy of getting some of my taxpaid money back. At least tax cuts would be fair on everyone, as well as making Mr and Mrs Bludger think about having to pay their own and their offspring's way in this world instead of mooching off the rest of us. People earning $150,000 and claiming WFF are just as freeloading as any DPB recipient with a passel of dad-less brats.
George
I am astonished at the perfidity of Cullen's comments. I can understand he loves power and money but I can't understand that blind him so much that he forgets about basic truth and decency. And the basic truth and decency is to admit that the existing economic policy is mediocre at its best. At its worst it is deliberately brainwashing Kiwis and taking us to be just passive observers of I know what is best for you.
James
The fairest tax is GST. The Government should do away with all other taxes and increase the rate of GST. This way you would only pay tax when you spent money. Wouldn't this increase savings? This Government spends bucket loads of money collecting the actual tax, only to spend even more to hand it out again on programmes such as "Working for families."
Stephen
I think what John Key proposes is the right way to handle this. At the start it should have been handled as a tax cut targeted at the groups who currently benefit from the working families. I feel the reason why it has been dealt with in this manner is for long term political gain. Tax cuts are quickly forgotten 2-3 years down the track (When the next election comes) With giving a tax credit like working families it is a constant reminder to the people receiving it that the Labour govt has done this for you. If I had 2 children earning nearly double the average wage and still had to have assistance from the government in the form of a welfare package It would make me question my lifes worth. Where as a tax cut would be seen as a reward for working hard.
Neve
Michael Cullen is a one-trick pony. Whenever National has something to offer he goes scare mongering saying they just want to line the pockets of the rich. Really he's clutching at straws since he has no response to the shift in public opinion that is occurring. The tax take in NZ is not fair considering that the government hoards it and won't reinvest it in crucial infrastructure to enable our future economic viability.
Owen (Christchurch)
Ah, the beauty of hindsight is such a magical thing. As someone once said: Common sense is never that common, or something to that effect and how true it is of our politicians from all sides. It makes you wonder if they give them a pill when they sign up to the various political parties as part of their induction? The point I wish to make is that instead of arguing over whether we should get a tax break or if you should help bail out people through a property share programme, perhaps our politicians could learn from overseas experience about the benefit of having a few large employers (Irelnd) and not just letting them go elsewhere (Australia) and even perhaps realise that joint negotiations between interested parties can actually help the country (Australia under Bob Hawke and some European Countries). Unfortunately, various politicians will always be who they are and that is self serving leaches that seldom do what is beneficial for the masses. Unfortunately we are in for a bumpy ride ahead with plenty of vote pulling bribes with little long term benefit. The fight for our votes has already started. Sadly, they only want our vote, not what is best for us.
davr0s – Auckland
I don't know how Pete Hodgson can say that people live below the poverty line. Many of the so called poverty people earn more money receiving benefits than working. There's no inclination to work when having another child will give them a higher income whilst still being able to sit on the couch and watch TV. The so-called poverty stricken people should manage their finances better. Don't go and get Sky digital, a flash new car or the latest Nike, Puma and Reebok gear. I earn $40k pa and can't afford a decent car so how is it that the people in poverty can have Sky and a nice car. Just look at the state houses on East Tamaki Road to see that the "poor" can afford everything and more!
G Kerr
Cullen, you're fired...
Ken
The difference between Tax Cuts and Working family scheme is: Tax cuts will give the benefit to all New Zealanders while working family benefit is only targeting certain group of the country. Working family scheme creates more complications in the current tax systems. It creates extra work for govement department, which is not very efficient. Basically, the Working for Family scheme, government collect more tax from one side and distribute to certain groups from another side. Why not just make it simple that cut tax down, which benefits all people of the nation. Working for Family scheme has a certain degree of discrimination towards single group (A form of discrimination I coin 'singlism'). Yes, it is good to support family who have children. But nowdays, single life isn't easy either. Singles have less purchase power to afford mortgage, they live alone which is more costly compared to couples living together who can share expenses. When it comes to illness, single life is more vulnerable than those has a family.
Sometimes being single is not a choice, so why is this group being excluded out from benefits and support.
Arron
When Cullen talks of targeted relief, this means communism, don't be fooled. What we should do is have a band of income where nothing is taxed, say up to 25k. This would ensure that the truly hard up have some form of relief. Then we should have a low flat rate (say 20-25 per cent) for any income earned above that. This would encourage the hard up to work and improve productivity, as at the moment there is not much point in striving to do better. If Cullen is worried about being able to afford it or the effect of overheating the economy, slash spending on the unproductive public sector monster, and wait until the coming Labour-induced economic crash to implement it as this will provide a stimulus then when we need it the most.
The time has come when hard working people are sick of supporting the low-life rubbish that keeps voting socialism back in. If you don't act now, don't worry about getting a larger slice of the pie, there will be no pie to slice up.
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