Gordon Campbell on National’s phantom tax cut package   9 Sep 2014

Gordon Campbell

Hmmm. So National’s tax cuts package turns out to be one of those television advertisements that screams a headline promise – perfect skin! a youth tonic that works! - while in very small print there’s an out clause: special conditions may apply. Heading into the home stretch of this election campaign the government yesterday admitted it didn’t know whether it can afford tax cuts at all, much less give any detail on what they may deliver, when and to whom. Tax cuts, though! Because you’re worth it.

As far as anyone can tell, the government is planning to carve out the tax cuts from the $1.5 billion a year it has set aside for discretionary spending over the next three years. Apparently, some of those funds will be used (a) to meet the unknown shortfalls in health and education as they arise, some of it will also go (b) into repaying debt and the rest… well, $500-750 million might be available in future for (c) a teeny tiny tax cut package to low and middle income workers in 2017, all else permitting, no guarantees. Something in the region of $5 to $10 a week. Because there’s no room for anything more, according to Prime Minister John Key. Meaning: at best, there will be only a bus ticket sized tax cut from the same government that in its last round of tax cuts offered $135 a week to people earning over $150,000.

Yesterday, Key also admitted that his tax cuts were essentially just an aspirational exercise. National is hoping it will now be seen as the party that wants to deliver a tax cut, while Labour will be seen as the killjoy that wants to impose a capital gains tax. If that’s the level of unreality we’re dealing with, it's surprising that National has stopped with tax cuts. Why doesn’t National promise to voters that it has a plan that will deliver world peace by 2017? Caveat in small print - subject to conditions operant at the time.

Scotland Makes Up its Mind. The undecided seem to be coming off the wall for the Scottish independence referendum on September 18, and they’re heading for the “Yes” camp. For the first time, the polls are showing the “Yes” vote slightly ahead. The headless chook response – markets spooked, the British pound falling, tabloids hoping that news of the next royal baby will swing voters back behind the Union Jack etc – has been strange to behold. One remaining issue of substance is whether an independent Scotland would be admitted into a European Union already feeling skittish about separatist movements in the likes of Spain and Belgium.

The “No” team would be wise not to press this button. One of the stranger aspects of the Scottish referendum is that it is occurring without much reference at all to the moves within the British Tory party to take Britain out of the European Union in a few years time.

Much has been made of the impact on Scotland of being cut loose from Britain. Yet the sentiment in Scotland is comparatively pro-EU. Does Scotland really want to vote “No” on September 18, and then become a prisoner to a Westminster decision to take Britain out of Europe in three years time – thereby condemning Britain (and Scotland) to becoming an isolated economic backwater off the coast of Europe, shorn of its Strasbourg human rights legislation, mainly for reasons of xenophobic Tory spite. With Boris Johnson lying in wait.

If the prospect of EU disengagement gains prominence in the coverage next week, the “Yes” vote can only benefit. Scotland believes in Europe, even if much of the Conservative Party no longer seems to.

Promises Promises. Here’s a question. What song best epitomises National’s phantom tax cut package? Maybe the Everly Brothers “All I Have To Do Is Dream…” Yet ultimately, this classic reggae track by the Ethiopians seemed to fit. “Promises promises, on a full belly/ they’re leading the children to a land of make believe…”

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