VIDEO: Journal #9 - On Budget 2007

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17 May 2007
VIDEO: Journal #9 - On Budget 2007

In this ninth edition of his video journal series, John has just come up from the House following the Labour-led Government's release of Budget 2007. In his response to the 'money-go-round' Budget, he said that taxpayers were actually worse off because it failed to deliver tax relief for average Kiwi families facing ever higher mortgage rates and cost of living. "Perhaps the biggest hoax perpetrated in this Budget was on businesses, which on the one hand get tax cuts but on the other are forced to match their employees' Kiwisaver contributions in a cruel money-go-round," he said. For a media release on this, click here. For a speech in which he outlined the structure of an alternative budget under National, click here

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#1 - Andy Wilgermein 2007-05-18 13:19 - (Reply)

Great video...further comments not identified by john Key 1) What happens if a person who has contributed over 10 years , then changes jobs or leaves the country permanently or as with women and childcare ...they stop work. 2) There is no government backing...what happens to the money if we hace another economic diaster like the share crash and a number oif investment companies either fold or run huge losses over time. 3) Its Ok for large large organisations who are making huge profits to get a tax credit...what about those who do not make large profits...how do they get a rebate. The govt assumes small businesses make huge profits but they don't. many small businees cannot pay more in salaries. 4) How does it affect the self employed...the 100% commission sales people and so on. Would appreciate your comments.

#2 - Rod Sudlow 2007-05-18 13:46 - (Reply)

Agree with much of what you are saying. We do need some better form of personal savings, and maybe the Kiwi saver goes someway towards this. But, if we are going to get serious about climbing the OECD ladder then Nz corporate and small business tax needs to be slashed. A recent Herald article suggested 12%.

#3 - Ann 2007-05-18 14:01 - (Reply)

Regarding the Kiwi Saver, it has been suggested that Cullen hasn't prepared the structures to provide New Zealander's with a secure investment. Item 24, 2.1 (?)of the trust document denies Tower's judiciary responsibility or duty of care, so Cullen hasn't forged any guarantee for New Zealanders. He has also failed to take away the discretions pertaining to Tower's ability to manipulate the reserve, which determines the return on investment. This scheme has been painted as New Zealand's answer to much needed saving, If you know your making progress then saving follows through, we have a proverty mentality caused by a social welfare system thats out of control.

#4 - Frank de Jong said:
2007-05-18 14:36 - (Reply)

Hello. I agree with most of your comments. What is National's policy on the fuel surcharge? If the tax we have paid on fuel for the last thirty years had gone in roading infrastructure we wouldn't have to play catch up. If all of went to roading now, I doubt that a surcharge would be necessary.

#5 - Max Percy 2007-05-18 14:48 - (Reply)

Hello John, I thought you budget reponse speech in the house was very polished, particularly in that you did not have any notes to refer to. You have touched on some very good points in your video. What impressed me most was that while you raised some issues that may need addressing when you become Prime Minister you didn't rant and rave and get the 'great knocking machine" into action but rather a wait and see response. In my view a very well delivered and measured reponse to the budget. Is anyone surprised at your continual climb in the polls! Best wishes Max Percy

#6 - PaulH 2007-05-18 14:53 - (Reply)

What is really sad about this Fudget is there is nothing for the people that need it most, the poor. People struggling to survive on low wages who can’t afford to contribute to kiwi-saver, watch as govt gives tax cuts to their bosses, knowing that payrises wont be forthcoming because of employer contributions to kiwisaver. They can expect fuel prices to rise from 5c-10c litre, and electricity prices will rise as demand increases to power trains. House prices continue to rise at $7k/month and not a penny to alleviate the shortage of state housing. Only thing Red about this was the cover.

#7 - peg howard 2007-05-18 16:05 - (Reply)

I'm going to have to be VERY careful of my spending from now on! I speak as a superannuitant, who among other increases, will be paying 10 cents per litre more to run my car, and have just had the subsidy removed from my heart medication. I always read the small print, and the 'no government guarantee' at the end of the budget, was enough for me if I wasn't already convinced. Yours was a very impressive speech.

#8 - KATHERINEB 2007-05-18 16:10 - (Reply)

We have just sold our business, thankfully, because with a staff of 3 plus ourselves I cant see how without alot of struggle a small business can cope with the kiwi saver, it was fine when it was just the admin but now having to match the employees contributions, its going to be tough on the small companies. Yes I know the introduced a business tax cut but I am sure there are alot of companies who will be paying back more than they saved through the kiwi saver. Question though what happens now that its compulsary if you are already paying into another scheme do you A continue with both or B drop the other scheme which if everyone starts doing that makes it harder on the investment companies. There are some winners yes but theres going to be alot of loosers.

#9 - Kath 2007-05-18 16:28 - (Reply)

Hi John, Australia has managed to grow it's wages and lower the tax burden on its workers becuase it has had the same / similar scheme as kiwisaver in place for years. This gives the goverment money to work with instead of taking more tax from the people. I am happy not to recieve a tax reduction if it means our government has more money to use for our benefit in way of health and education. My parents always taught me to save and ALWAYS have savings/money in reserve, and NOT to spend it all at once, as your tax cuts would result in.

#10 - Neville Fursdon 2007-05-18 16:58 - (Reply)

Most impressed with your speech in reply to Michael Cullen. Watch out for handouts/vote buying in next year's budget, so don't give too much away just yet. Remember how Labour stole Don Brash's thunder after the first Orewa speech.

#11 - Ian Chapman 2007-05-18 17:47 - (Reply)

Hi John, What I'm worried about is with Kiwisaver coming in is that I have a resonable sized student loan debt, of which I'm trying to pay off as well as a mortgage. An extra 4% out of my salary is going to mean that I might have to sell some of my assets to keep my head above water. I think the Dr Cullen and hte labour party have shot themselves in the foot big time. Anyone with brains will see that they are holding back until next year and this time it will not work. I personally have no confidence in this government and their ability to govern with such a slim majority. Being the election forard adn lets get the National party in!

#12 - Jonathon Ross 2007-05-18 18:47 - (Reply)

Sooner NZ no longer has a Labour Party occupying the Treasury benches the better off we will all be. Clarke and Cullen should be extradited to a third world country before NZ becomes one.

#13 - Roland Green 2007-05-18 23:41 - (Reply)

A good and polished response John. It would be good to hear of some sample cases scenarios of the effect of the kiwisaver aspects of the budjet. For example, my son has a small business in Dunedin where he employs three or four full time staff and a couple of part timers. He certainly dosen't fall into the "corporate" bracket. So how does he fare in all of this? Keep up the good work.

#14 - Adolf Fiinkensein 2007-05-19 14:27 - (Reply)

Excellent performance, Mr Key. Entertaining, hard hitting and all the time laughing at them. David Farrar descibed them accurately when he referred to Cullen (and by inference, Clark) as the Fiscal Taliban of the South Pacific.

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