An argument one often hears to try and convince people, that we shouldn’t get some of our taxes back, is that yes we had a big surplus this year, but hey look at the projections for future years - that surplus won’t be so large.
So let us review the history of Treasury projections of the Operating Balance or surplus.
The 2003/04 surplus was $7.4 billion. It was originally forecast to be $3.2 billion.
The 2004/05 surplus was $5.8 billion. It was originally forecast to be $2.7 billion.
The 2005/06 surplus was $11.5 billion. It was originally forecast to be $4.2 billion.
The 2006/07 surplus was $8.7 billion. It was originally forecast to be $6.2 billion.
Now to be fair to Treasury, forecasting the income and expenditure for an entire country is difficult. Hell it can be hard to forecast earnings for a single company, let alone all of them. Nevertheless their conservatism is starting to affect the credibility of the forecasts.
I’m more forgiving of a $6 billion change from an initial forecast four years out, to an actual than a smaller change over a smaller time period. But let’s look at how the forecasts for 06/07 have changes over the years:
May 2003 = $6.2 billion
May 2004 = $5.1 billion
May 2005 = $5.3 billion
May 2006 = $5.8 billion
Dec 2006 = $6.3 billion
May 2007 = $6.6 billion
June 2007 = $8.7 billion (actual)
Yes the surplus to 30 June was $2.1 billion higher than when the Budget came out in May.
Now this year’s surplus was forecast in the BEFU to be $6.4 billion. That means it could well be over $9 billion, which would make the surplus over five years exceed $40 billion... of your money.
From the Dom Post...
What it is proof of is that his Government is over-taxing New Zealanders, a bad practice that insulates ministers and officials from spending mistakes - because they can be written off without consequence - and makes individuals more dependent upon the state.
Treasury’s view that the state is on a “structurally higher” revenue track than previously believed makes some sort of announcement about tax cuts almost inevitable in next year’s Budget, which conveniently falls just a few months before the election. But, if past experience is anything to go by, the amounts involved will be small and the wait to receive them long. This is not a government that relishes relinquishing its grip on individuals’ wallets. Previously it has argued that returning surplus revenue to those who earned it would fuel inflation, a self-serving argument that has encouraged ministers and officials to bid opportunistically for the surplus cash.
Dr Cullen has previously argued that he does not need a tax cut. Given his $255,000 salary as deputy prime minister and the generous superannuation fund waiting for him in retirement it is difficult to disagree with him.
But there is a world of difference between earning $4900 a week and $1150 - the amount earned by someone on a $60,000 salary.
I would also observe that Dr Cullen doesn’t need taxpayer funded superannuation, yet he is happy enough to take that, yet not happy to give tax cuts, on the basis he personally doesn’t need them. Somewhat inconsistent.
Nice going Labour.
Reply With Quote
Originally Posted by Usarka
Bookmarks