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What a funny old week it's been listening to the media and the Government howling for National's costings on their foreign house buyers tax and National's refusal to release them.
Personally I don't give a flying fig on the costings.
It seems perfectly obvious that National will not raise the money it says it will because that would take a record level of overseas sales.
And National doesn't care. The overseas buyers tax is a sideshow. They are committed to tax cuts. That's their thing. That's non negotiable. They will happen.
So if they can't subsidise the cuts with the new tax what could they do? Either borrow more or cut Government spending. Cutting services will make their coalition partner happier, so what do you think will happen?
The overseas buyers tax seems like a strange one for a so called right wing neo-liberal globalist party to propose. One that says it's committed to fighting inflation.
In essence it's a wealth tax. "You can afford a $2 million dollar house. Great we'll have another $300,000 bucks in tax thanks, you rich prick." I guess it's OK to tax the wealthy if they're foreign. That $300,000 is another incentive for foreign buyers to find places without the tax because they don't like tax either, so that's another blow to National's optimistic projections.
The opening of the market is another strange call in a time of inflation. It will mean more buyers and therefore higher prices which all contribute to inflation.
If the market picks up steam because of the foreign buyers, then the wealthy with property will have more capital to borrow against to spend on their next overseas trip or car or new kitchen. Again spurring on inflation.
Houses will get more expensive freezing out first home buyers. That's headline news and more inflation.
- Half of National's tax cuts go to top 5 per cent of earners - unions
- Climate Minister voices disapproval over National's plan to use ETS to fund tax cuts
- National downplays cost of their tax cuts amid calls for party to front up
Meanwhile, National is squirting $2 billion into consumers back pockets, will also spur inflation.
In fact, when you look at National's suite of policies, they're all stimulatory, which is not the thing you do in a high inflation environment with historically high house prices. Margaret Thatcher would be having kittens. It's no wonder some true neo-liberals call National Labour-lite.
At the end of the day, I don't know why National is so wedded to the tax cuts other than they're an easy sell to house owners.
Why couldn't they just cut the wasteful spending and delay the tax bracket changes until we're better placed to wear them?
Cut all the wasteful spending and then spend the savings on stuff we really need. Like doctors, hospitals, water pipes, roads and public transport.
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