Here comes the Carbon Tax

Tim Owen

Labour and the Greens last week released their budget responsibility rules. This is a slick political move which could fool a lot of soft voters. On the face of it, it looks like they are making a firm commitment to fiscal responsibility. Crown spending no higher than 30% of GDP. Reducing government debt to 20% of GDP by 2022. No increases to income tax. They point to the Labour government’s record of surpluses compared to National, but that does not take into account the different economic circumstances they operated under. We know, of course, that both Labour and the Greens will be promising the earth in terms of government spending in the run up to the general election this November. For example, the Greens want to make state schools 100% tax payer funded. The Labour Party wants to fund 3 years of post school education for everybody and also an extra 1000 Police, plus the resources to support them. On it goes throughout their policy documents - health, social services, etc.

How do you think they’re going to pull off this fiscal conjuring trick of not increasing taxes whilst committing to more government spending?  Well, in their discussion with Liam Dann of the Herald on Friday last week they gave us some clues. Grant Robertson, Labour’s finance spokesman was predictably vague but gave some indication of what might happen when he talked about increasing the 'bright line' rule around re-selling property from 2 years to 5 years.  Meaning you have to pay a capital gains tax if you sell residential property within that timeframe. In other words, a capital gains tax for a party which isn’t going to support a capital gains tax. Even more worrying though, is the monster hidden in the depths of the Greens plans - a carbon tax. Couched in typical green terminology on their website, it talks about 'recycling' the tax back to ordinary people and businesses. This begs the question of "why bother taxing folk in the first place if you’re going to ‘recycle’ the money back to them?" We know the answer to that, of course: (1) You’re not going to recycle it all back, (2) it's about controlling people, and most scary of all (3)  it's about locking New Zealand further into world government and backdoor international socialism by going along with the climate scam.

We can only hope that Kiwi voters will see through all this and be rightly sceptical at the suggestion that any government could pull off the sort of spending promises these two political lovebirds will make to the public whilst maintaining fiscal responsibility.