Thank God the budget is over.

State of the Nation:

To understand what a crap budget Bill English presented one has to understand just exactly what the state of the NZ economy actually was: Firstly it is important to understand that the Government has been reducing ‘Government dept, when they took over the governments books from Labour in 2008 government debt was zero. Between 2009 and 2010 it shot up rapidly because of the tax giveaways and the Christchurch earthquake, ever since then the government has clawed back government debt via increasing tax increases and cut backs to government services etc. They even upped tax for paper boys and girls, home care givers, cut benefit entitlements, chopped assistance to a huge number of community groups like Age Concern, racked up power charges via the SOE’s.

All but one of the Power Companies simply upped ther charges to pay the governments demand for greater profits so in real terms these are really nothing more than ‘tax increases’ of course solid energy had the guts ripped out of it by government demand for bigger payments was fatal and Simon Power ripped the SOE to bits and then buggered off to work for one of the big overseas owned banks hoping to follow in the blood stain foot prints of John Key.

The demanding of massive profit taking from SOE’s like Solid Energy helped to lower government debt, to read the full and year by year story of that huge stuff up and rip off, one full of lies, lies and more lies, corruption and shocking business skills, go to:[ http://thedailyblog.co.nz/2013/05/17/solid-energy-a-solid-drama-of-facts-fibs-and-fall-guys/ ]

Increasing GST and fuel taxes, reducing health and social spending has helped get government spending down, at a hell of a cost to those, on lower incomes whose wages and incomes plus working conditions have taken a battering over the last five years. The government keeps telling us that the government books will be back in surplus by 2014/15 and they would be no matter which government was in power, why because the government has increased taxation on the 80% on mid or low incomes. Hence the 3 cents a litre fuel tax increase per year for the next three years. Without that increase we wouldn’t have a hope in hell of getting into surplus by 2014/15. You can only get so much blood out of a stone!

The second leg of the nations economic state is ‘private debt’ and NZ is the second worse indebted nation in the first world, only Turkey is worse and we are forecasted to take over from them in 2014. Our businesses, if one can call them that, are just overflowing with a mountain of debt and the massive monthly interest being paid on that debt is almost all going overseas mainly via our almost completely Australian and foreign owned banks. Five of our smaller banks like the TSB have now [last week] been placed on negative watch because of their massive lending to the top end housing market and the credit rating companies are suggesting that the housing bubble is about to burst.

The government has two clear options available to it: One; raise taxation for those on high incomes or two, introduce a tax that will take the sting out of the housing bubble.

The fact is that NZ is no-longer a manufacturing nation as such; we pay massively more for our imports than what we make from our exports. Let me put it this way, if all our imports ceased, we could feed ourselves and that’s about it. Within three weeks our fuel supplies would run out, those of us who remember cars less-days know how true that is.

The government could move to balance the taxation system so that it was once again fair, they know that they can’t simply raise the taxation rate by a percentage across the board because those at the bottom would be plunged even further into poverty and more middle class citizen would join the bottom of the heap. They could raise the tax rates for those on higher incomes say one hundred thousand plus, they could tax trusts and corporate bosses at a higher rate but they wont because that’s where they get their financial and voter support from.

The Labour party has yet to lose its heritage of the Roger Douglas insane view that the market is the answer but it is undergoing a sort of a minor rebirth in its acceptance of the Greens NZ Power scheme and the introduction of a capital gains tax on all capital gains other than the family home. Did you know that of all the members of the National Party in Government own two homes on average, [some in fact own three, four or six or more] and the capital tax gains they make and others like them is massive, they also drive up rentals in fact, so much so, that most people cant afford them.

The value of tax evasion in NZ is simply huge, as it is around the world. The blog No Right Turn tells the story in a paragraph or two and it is worth a read if you haven’t already done so: http://www.norightturn.blogspot.co.nz/2013/03/the-cost-of-tax-evasion.html

Anyway now that the ranting and raving about how good the budget was by our massively indebted business experts, who seem to spend most of their time refinancing and increasing CEO’s salaries have stopped for a breath.

You and I can now work out how you are going to pay the ever rising power bill, the rates, massively increased insurance bills and still put food on the table and I hope... help get the Feed The Kids Bill to a select committee.