Thursday, September 20, 2012

The Moon orbiting Planet Key

Recently Prime Minister John Key was kind enough to reveal what life on 'Planet Key' would be like. "Nirvana" was the answer apparantly. Everyone would be rich, there would be lots of golf courses, no work, plenty of holidays. Sounds like bliss.

However, Key forgot to mention the Moon that orbits his planet. This is a dirty place, full of poor people. There is crime, poverty, inequality, homelessness. On Planet Key's Moon, solo mothers are punished, invalids are forced to work, hundreds of thousands of people work for poverty wages. There is homelessness and despair.

Sometimes the people on Planet Key's Moon are allowed to visit Planet Key, but only to work for the inhabitants of the planet. Then after work they are escorted off the Planet to their cramped Moon, where they try to survive, constantly struggling to pay the bills and feed the kids.

Sometimes the inhabitants of Planet Key are so busy playing golf and taking holidays, that they forget there even is a Moon, after all it remains out of sight most of the time. But on those nights when the full moon rises, its hard to ignore. So on Planet Key, where it is "beautifully governed", those doing the governing sit around and come up with policies to try and ensure that Planet Key doesn't become overpopulated. They cut student allowances and loans so that Moon inhabitants can't study for higher education. They take away Union rights so that Moon inhabitants can't earn living wages. They build more prisons and lock up people for longer so that Moon inhabitants stay where they should belong.

Planet Key already exists. Planet Key is places like Helensville and Epsom. Places where the mega-rich can hide away from the rest of society and pretend there are no problems. But living in paradise isn't easy, there's always the problem of reality getting too close for comfort. Luckily we have people like John Key to remind us all that there is no need for reality when you already live in your own fantasy.

Wednesday, September 12, 2012

Trillions of dollars for lifetime of corporate tax cuts - Report

By Packer Murdoch
Sep 13 2012

The Ministry of Social Development has released a report showing that all companies who now pay 28% tax, down from 33% in 2008, will cost hundreds of billions of dollars in lost revenue if they remain on the lower tax rate for the rest of their lives.

This is the first time a Government has forecast how much it will cost if a group of current companies get tax cuts for life.

In September last year Cabinet agreed to fund the $1 million research carried out by Australian company Fry Taylor Consulting Actuaries. In Parliament's question time, Prime Minister John Key was asked why a million dollars was spent on research which seemed nonsensical. He replied "This is valuable research giving insight in to the nature of corporate welfare dependancy. The company is owned by a good friend of mine so I knew they would do a good job".

The aim was to use the valuations to better target benefit reforms and classify groups who are the most benefit dependent, which now appeared to be corporations.

The Fry Taylor report finds companies who also get a 15% tax rebate for research and development have the highest individual lifetime cost. If other tax cuts, like those given to overseas film productions were taken in to account, the figures became astronomical.

The Government would also spend $1.1m over four years on the Corporate tax board who will advise the ministry on how to best implement corporate benefit reform and report to the social development, finance and state service minister. Former Commerce Commission chairwoman Paula Rebstock will head the panel overseeing the ministry's decision to have an "investment approach" to corporate benefits in New Zealand. Mr Key, when asked about Ms Rebstock's appointment stated "well we've given her every other cushy job and she always comes up with outcomes which we seem to be in total agreement with. Its a positive relationship."

Social Development minister Paula Bennett said the figures showed that the Government needed to put more focus on corporations, rather than on people on the sickness or domestic purposes benefit, which made up only a fraction of the total costs of benefits.

She conceded there were many variables in the figures, but said the exercise would force Government to be more accountable.

"We've known the unemployment benefit has relatively low numbers and people move on and off it quite consistently, yet it's where we put most our punitive policies, most of our resource, most of our energy and most of our negative legislative changes."

Ms Bennet stated that the report showed there needed to be a dramatic shift to concentrate on the costs of corporate beneficiaries. "The other point to remember is that Corporations have essentially the same rights as people, but their life expectency is potentially infinite. So if we are looking at the true costs of giving corporate tax cuts over the the corporations lifetime, it actually extends in to the trillions of dollars."

Finance Minister Bill English agreed and said that the change in focus would come at the expense of those companies who now paid much lower tax rates - he was currently in negotiations for next year's Budget and expected to approve more funding for the welfare reforms on top of the $237 million this year.

- ANZP

(see the original article here)