Duncan Garner: The tax cuts to die for
Saving lives: Public health advocates say the smokefree law could save up to 5000 Kiwis a year from dying of smoking or related illnesses. Photo / Getty Images
The optics, as the expression goes, aren’t good and, if it’s possible, they’re getting worse the more our new government tries to explain why it plans to fund tax cuts by dumping anti-smoking legislation which is so groundbreaking and highly regarded around the world that the UK is copying it.
In fact, the more explanation, the more it sounds like it’s losing the argument. After all, isn’t explaining losing? What the government has done is go searching for an explanation to justify the indefensible. Is this how anyone envisaged the first “100 days of action” under the “outcome driven” Prime Minister Christopher Luxon?
It’s a messy start and Luxon has been ordinary. He’s only got himself (and an adviser) to blame for that. He’s made embarrassing mistakes trying to defend the government’s position, claiming under the Ardern government’s smokefree legislation, just one shop would sell cigarettes in Northland, hence they’d become a target for ram raids and that’s why we need to drop legislation which would have created a smokefree generation.
Sadly, the numbers were wildly inaccurate but that’s the kind of mistake that happens when you desperately try to patch together an argument for political expediency. (For the record, it’s 35 shops not one in Northland.)
So, where does that leave the rushed and disingenuous argument about reducing ram raids? Stop treating the public as fools and at least wait a term before you use up all your political capital on arguments as shallow as a bird bath. We see it clearly: National needs the revenue from the excise tax on smoked tobacco products to give away in tax cuts because other plans were stymied by its coalition partners, Act and NZ First.
It’s as simple as that. Getting caught out only makes the wild spin more obvious – especially if one of your top-ranked Cabinet ministers, Chris Bishop, is a former tobacco company employee who repeats the misleading number the following day.
Paying for tax cuts
But National must pay for its promised tax cuts somehow. It’s their biggest policy. Could they delay them? Perhaps, let’s say if the fiscal conditions were no longer right. But, of course, they never were right in the first place.
Rising inflation should have seen the tax cuts proposal ditched months ago and now that a big, new, black hole in our finances has been discovered, they’re the last thing any government should be doing. To combat inflation, the Reserve Bank has warned it may have to raise the official cash rate (OCR) next year and when that goes up, all other interest rates, including for mortgages, follow. Who wants to keep paying high mortgage rates?
This is not the work of a government with a “laser focus” on inflation: tax cuts do not help inflation.
So, what are the chances of these cuts being ditched? Watch the mini-budget for further news, but nothing really surprises me anymore. After all, what a way to “get the country back on track” – when it comes at the cost of people taking up smoking, getting sick and dying earlier.