TAX CUT MADNESS

It will be workers who will pay for the coalition government's ill-conceived tax cuts, even though a recent study has showed that the record profits of the corporate sector have been the main contributor to the rising cost of living.

AT LEAST Leader David Seymour and the ACT Party were honest enough last week to acknowledge they have little concern for the interests and welfare of workers. Its response to the Ministry of Primary Industries (MPI) intention to cut 384 jobs, or nine percent of its workforce, was to give its thumbs up to the cuts. 'Good' was the blanket assessment it posted to X. Neoliberalism is nothing if not soulless.

But our charisma-free Prime Minister felt he had to go through the motions of identifying with the workers about to lose their jobs because of his coalition Government's drive for 7.5 percent spending cuts right across the public sector. ' It's really tough, and I really identify, and I empathise with those individuals and those families,' said Christopher Luxton. Well, at least he didn't tell workers to eat cake.

Of course, these deep cuts are all part of the National-led government's grab for cash in order to pay not only for its ill-conceived tax cuts but also to funnel nearly $3 billion into the pockets of landlords.

This comes at a time when the Government, like the Labour Government before it, has rejected implementing a capital gains tax. This is the recommendation of not only the International Monetary Fund, but it also has its supporters within the Treasury as well; neither could be described as being a hotbed of left wing economic thinking. It goes without saying that any new taxes, like a wealth tax or a windfall tax on corporate profits, are also not on the agenda. The Green Party has proposed both such taxes.

The Government's economic plan is not only mad, but also flies in the face of public opinion. Although the corporate media may not want to talk it about it and don't, several recent polls have indicated that New Zealanders want the wealthy to pay more tax. People also know the corporate sector has been profiting from the cost of living crisis at their expense; there is always a howl of public outrage when a bank, energy company or a supermarket chain announce yet another eye-watering profit.

Research conducted by FIRST Union researcher and policy analyst Edward Miller last year revealed that the record profits of the corporate sector have contributed significantly to the rising cost of living.

During the main period of rising costs, from mid 2021 to the end of 2022, Miller says that rising profit accounted for more than half of domestic inflation.

The National Party made tax cuts the central plank of its policy manifesto during its 2023 election campaign and was accused by its political opponents of pork barrel politics. Indeed, Labour leader Chris Hipkins was continuing to accuse the coalition government of pork barrel politics in Parliament last week. But the reverse is true; this National-led government, in zealot-like fashion, is intent on pushing conservative economic policies even when the public supports much more progressive ones.

The onus is on the opposition parties is to develop and promote such a progressive economic platform. Under new co-leader Chloe Swarbrick, the Green Party appear to be heading in that direction. Swarbrick continues to talk of a failing economic system that is not responding to urgent social needs.

The reverse is true for the Labour Party. It has not even stated that it opposes tax cuts, only going as far as to say that this is not 'the right time' for such cuts. This is a political party looking for a reason to exist, other than to occupy some seats in Parliament.

It won't be enough for Labour to claim that it would be a better manager of the neoliberal economy. It won't be enough for it to promise a 'kinder and gentler' capitalism. In short, continuing to be a defender of the economic orthodoxy, simply means protecting the interests of those who benefit from the status quo. But with Chris Hipkins still in charge, and no one waiting in the wings offering anything that hasn't already been defined by market considerations, Labour is permanently marooned in a centrist quagmire of its own making.