Archive for the 'slippery' Category

Gone Flippin’

Slippery John’s flip-flops keep on coming.

Here he is just three weeks ago in the Listener: “you either have a conflict of interest or you don’t; it doesn’t matter whether you hold one share or a million”

and, today, on Breakfast: ‘it’s a very small number, no-one thinks a Member of Parliament with 500 Contact shares has a conflict of interest’

Now, I know John’s a bit of a maths whizz but I’m pretty sure 496 is between one and a million.

Then there’s Key’s positive and ambitious campaign that never quite materialised. Last week, Key said National wouldn’t be running attack ads But work must have already been underway on them but, now, it has released three. Sure, they’re pretty weak - everyone knows newspaper headlines are sensationalist, the buzzing sound is annoying and the narrator who doesn’t know whether her tone is meant to be amused or outraged - but they’re hardly positive.

While we’re on the topic of flip-flops, here’s the latest riff on the ‘two National party guys’ ad by 08wire:

Standard Scoop: Key exposed again on secret shares and Tranzrail

When the Tranzrail shares came to light, Key was asked whether he had any other undisclosed shares entailing a conflict of interest. He said he didn’t. That was not true.

National Party Leader John Key failed to disclose his conflict of interest arising from his share holding in Fletcher Challenge Forests while using his privileges as an MP to obtain information and make public statements relevant to that company’s industry and its major contractual relationships with Tranzrail.

Research I conducted exclusively for The Standard shows Mr Key owned 40,000 F-class shares and 60,000 S-class shares in Fletcher Challenge Forests (which is now called Tenon) when he became an MP after the 2002 election. He owned these shares in his own name, not in a trust.

Standing Order 166 states that “a member must, before participating in the consideration of any item of business, declare any financial interest that the member has in that business.” In other words, conflicts of interest must be disclosed. It was violating this rule that got Key into trouble over his Tranzrail shares. And it is this rule that he has broken again by failing to reveal his FCF shares when talking issues that related to FCF’s share price.

Every time Key had a conflict of interest with Tranzrail he also had one with Fletcher Challenge Fletcher. FCF had a contract with Tranzrail for moving timber and pulp around its logging sites, milling operations, and to ports. Because of this major contractual arrangement, what happened to Tranzrail also affected FCF and vice versa (FCF needed that lease of Tranzrail stock to move its timber, the contract was a major revenue source for Tranzrail).

FCF was also part of the Rail Freight Action Group, which was campaigning for the Government to buy the rails off Tranzrail. FCF believed such a deal would improve rail services for its logging, boosting its profitability, and, thereby, its return to shareholders. Key asked a number of questions in his capacity on the potential for a government deal with Tranzrail.

The information Key sought by asking questions about the potential sale of Tranzrail could have been used by him to make a gain on both his Tranzrail and his FCF shares. His shares in FCF alone meant Key had an interest in Tranzrail’s ownership. This means each one of Key’s statements and the questions he asked as an MP relating to Tranzrail’s ownership also created a conflict of interest in relation his FCF shares, which he failed to disclose.

In March 2003, Key spoke against a Bill that removed the cap of $6,000 on redundancy payments, at the same time Fletcher Challenge Forests was laying off workers at two mills and planning further redundancies. Key failed to disclose his conflict of interest.

Key also spoke on the Te Uri o Hau Claims Settlement Bill. This Bill gave Te Uri o Hau ownership over Pouto forest and 45% of Mangawhai forest in Northland. The logging rights to these forests may have been held by FCF (FCF logged many forests in the region but I’m still trying to get the documentation to confirm they logged Pouto and Mangawhai). Here’s the exchange from Hansard, October 2, 2002:

Key: Jim Peters declared his ancestry and his conflict of interest, if there is any, in this settlement process. I am happy to declare I have none….
An Hon. Member: The member is absolutely positive?
JOHN KEY: I am absolutely positive of that.
Ron Mark: You don’t know what skeleton is in your wardrobe.

If FCF was logging those forests, Key had a very real conflict of interest. By denying it, he will have misled Parliament, a serious offence.

Key was a shareholder in FCF during each of these incidents. Each of these failures to disclose his conflict of interest is a breach of standing orders and could be grounds for Key to be brought before the Privileges Committee in the next term of Parliament.

Key did not sell his Fletcher Challenge Forests shares until June 2003, the same time as he sold his Tranzrail shares. He sold them in four parcels, on the 11th, 12, and 16th of June, for total of around $105,000 [share price]. As Key sold both his Tranzrail and FCF holdings at the same time, it may be that he sold his entire New Zealand share portfolio at this time This matches with his statement on Sunrise that he hasn’t owned any New Zealand shares since 2003. Why he chose to sell then and what other companies he held, we don’t know.

Key may have had other undisclosed conflicts of interest arising from shareholdings in other companies as well as Tranzrail and Fletcher Challenge Forests. My research was not, and could not be, a search of all New Zealand registered companies’ registers during the relevant period; only eight registers were examined. The fact that this search of just eight potentially interesting companies turned up another conflict of interest (and more information, which I will be releasing in due course) suggests that there is more waiting to be uncovered.

Key failed, on multiple occasions, to reveal his shares in Fletcher Challenge Forests while using his privileges as an MP to ask questions that were pertinent to the value of those shares. And he misled the public, just four weeks ago, when he claimed he had no more skeletons in his closet.

Don’t dream, it’s over

I’ve always regarded the possibility of a National-Maori Party governing arrangement as absurd, even grotesque. The interests of the Maori people, who are predominantly working-class, are clearly best represented by the Left.

Under National in the 1990s, Maori unemployment reached 25% and incomes plummeted. Today it is 7.7%, and Maori incomes are rising as fast as other groups, albeit from a lower base. Maori would be among those to suffer most from National’s anti-worker, anti-poor policies. Indeed, many Maori (those on incomes between $14,000 and $24,000, those on a benefit or receiving Working for Families, and those in Kiwisaver) would pay more tax under National than they would under Labour. The Maori Party’s leadership universally comes from a left-wing, often extreme Left, background with a natural distrust of right-wing politics (Hone Harawira calls John Key a smiling snake). Their supporters overwhelming favour a Labour-led government and most will give their party votes to Labour. Only Tariana Turia, deluded Nats, and the more excitable journos ever thought there could be a deal with National. Even they have now woken up.

I think it’s interesting to remember how the myth of a possible coalition was destroyed.

In private meetings, John Key made a secret concession to Pita Sharples: National would be willing to drop its policy to abolish the Maori seats. That was incredibly foolish of Key, he effectively handed one of his best bargaining chips over to Sharples, he didn’t gain anything in return for this secret concession, apparently, and he put himself at the mercy of Sharples, who could now reveal this politically damaging double-dealing by Key whenever he wanted. Sharples didn’t have to reveal Key’s concession, he could have kept it to himself, but he repeatedly reported it in the media. What interest could Sharples have had in doing that? Only undermining the prospects of a National-led government and a National-Maori Party coalition. Key got played for a sucker by Sharples. His response, calling Sharples a liar and repudiating the deal, just made things worse.

The Maori Party’s choice to follow up on the debacle by making entrenchment of the Maori seats a bottom-line, Sharples’ comments that he would prefer to work with Labour, and Lockwood Smith’s racist comments just hammered the final nails into the coffin. But it was Sharples who chose to put the chance of a deal in the coffin in the first place.

Guest post: The clever dealer?

Many people laud John Key’s experience in the business world, and say that the smiling assassin’s ability to play hard-ball when required means he will be an excellent prime minister.

So why, during talks with the Maori Party, did Key drop a National ‘bottom line’ that would be a strong card to play? As evidenced by his admission yesterday, Key repeatedly conceded that dissolution of Maori seats was not a National Party bottom line in talks with Pita Sharples. Sharples made this public, and suddenly Key, the Hard-Nosed Operator from the business world was trumped.

In making the admission public, Sharples forced Key - with everything to lose - to decide between antagonising Sharples (and, by extension, the Maori Party) or admitting he’d given away one of National’s strongest bargaining chips before National made it to the table. Key, in increasingly typical fashion, chose the former until it became an untenable position, and conceded the latter.

This raises two questions regarding Key’s experience from the business world:

I - Why did he make a policy concession in such a weak position? There’s no evidence National extracted a similar concession. It is possible, but in the eyes of the public Key has been well and truly sharked; it looks like their position post-election, whatever that may be, has been greatly weakened.

II - Why did he choose a course of action that would lead to the worst of both worlds - antagonising the Maori Party by accusing Sharples of lying, before conceding he’s been deceiving the public all along? So much for making important decisions on the spot and getting the call right.

Not what you’d expect from the supposed paragon of business acumen.

Not a game

National has a press release out blaming Labour for a supposed increase in assaults on police. Now, there are more people and more police than ever before, so all things being equal there will be more assaults, but it would be a concern if the rate of assaults had increased. In fact, the rate on assaults per police officer has remained steady for the past decade. While every assault is bad, at least things are not getting worse.

(sources: Police annual reports)

If National really cared about solving problems in our society they would not try mislead us with these pathetic tricks.

Tranzrail eyes

It’s possible to win a battle but, in doing so, lose the war.

Like most commentators, I thought Key came off best from the debate on Tuesday. It was a good format for him to parrot his lines, all he had to do is deliver them well. As he said himself, 2 years of training from Crosby/Textor has turned him into a reasonable speaker when he is on script. And the PM was below her best.

But, like the general who throws his reserves in to win a battle leaving nothing to defend the counter-attack, Key’s debate performance left him dangerously exposed. His weak, vacillating response to the question of whether for not he had made private promises to the Maori Party on dropping his party’s Maori seats policy pricked up the ears of every news hound in the country. Clearly, there was a truth he wanted to avoid telling. Instead, he went with what seem to be his first instincts when caught out - try to obscure the issue in technicality (he repeatedly said there was no ‘formal’ agreement) and tell the lie that he thinks his audience wants to hear.

Problem is, Pita Sharples and his party are adamant the promise has been made. The result has been disastrous. He has been revealed to Maori as a double-dealer; another Pakeha willing to butter them up while promising his own people anti-Maori policies. To the people whom his Maori seat policy is meant to dog-whistle he looks like he’s all talk; what’s the point in a bigot voting for someone who is then going to turn around and work with the Maori and isn’t serious about his anti-Maori policies? To everyone else, Key is revealed once again to be untrustworthy; he stood in front of a million of us on Tuesday and lied through his teeth. No candidate for Prime Minister that I can think of has ever lied to the people on camera so often and been caught out on it. Ashcroft, Tranzrail, the Maori seats, Kiwisaver, Kiwibank… all those images of him with what Audrey Young calls his ‘Tranzrail eyes’, that spark of fear when he realises his lie is sprung.

Being caught out in all those lies, the constant slippierness, not only brings into question his trustworthiness as a leader it undermines everything he says. For instance, in his blog today, Key has a cry over some Labour protestors doing a skit of him auctioning off Kiwi assets. He insists he wouldn’t do sell them but he has been caught out in so many other lies that a denial isn’t credible. What might otherwise be an ineffectual topic of protest actually resonates.

Sure, Key won the debate but the image from that debate of his ‘Tranzrail eyes’ may end up being the iconic image of his defeat.

Pita falls for the lines - but not for long

I have some sympathy for Dr PIta Sharples over the fallout of Mr Key’s promises. He’s clearly been left high and dry by Mr Key, his would-be coalition partner. According to the Maori Party’s chief of staff we now find:

…that Mr Key was clear in the meeting that National’s position could be put on the backburner. Mr Walker and National’s deputy leader Bill English were both present in the meeting

If you missed it when the issue was raised on the leaders debate here’s the footage:

Mr Key has denied it before, after Dr Sharples first made the claim in a Sky TV leaders’ interview 11 days ago. No wonder Mr English has gone to ground! His boss’s predilection for telling people what they want to hear is becoming something of an ongoing issue (is that what English meant when he talked of Mr Key bouncing from cloud to cloud?)

Now I’ve just caught up with Mr Key on Sunrise - still not saying why he thinks Pita Sharples is wrong:

Oliver Driver: But I’m not, I’m not actually asking you if there was a formal agreement with, ah, with Mr Sharples, I asked Mr Sharples if he was wrong during an Alt TV minor leaders’ debate last night, and he once again said that, ah, you did make that assurance privately. Why, why [sic] would he be lying about this.

John Key: Yeah well I think it’s interpretation of where you’re at, I, there’s no formal agreement, so I don’t know how that would work, if you going to say the 2008 to 2011 period, ah, the Maori seats won’t be abolished under National in that period of time. Now yes, if we have a deal with the Maori Party after the election, we’re going to go in there in good faith, we’ll negotiate across a range of issues….

So if you’ve had a conversation but not formally signed something you can’t count on him not to change his mind?

[Update: Sharples on Maori TV explains what Key promised him]

A matter of trust

The Youtube debate was a bit of a let down to me because TV1 chose to play the least penetrating questions, allowing the leaders to pretty much stick to their stock answers. The only question that really broke through the pre-prepared stuff was Shane Taurima’s query about whether it is true that, as Pita Sharples is claiming, Key has privately told him National will abandon its policy to abolish the Maori seats. Key tried to evade and avoided outright denying it. Instead, he said ‘well, there’s no formal agreement’ etc. If he couldn’t outright deny a private promise to Sharples there is only one logical conclusion: that private promise has been made. Which means that National is running on a false platform regarding the Maori seats. Key needs to be questioned about this further. It’s not just a policy issue, it’s a matter of integrity and trust. The voting public has a right know National’s real policy.

On a related note, I get annoyed when I hear people like Therse Arseneau pompously say that events like the Springbok Tour might matter to people who were there at the time but not to those of us who are younger. Contrary to what a bunch of middle-aged people say, my experience is that the Springbok Tour does matter to people of my generation. We studied it at high school alongside the history of apartheid in South Africa. We grew up hearing of it as Kiwis standing up for justice. Along with the women’s vote and the nuclear ban, we see this as part of a proud tradition of New Zealand leading the world, standing up for what’s right (even if that’s not the reality, it is the myth). The protests are iconic to us and we have always been told the story from the side of the protesters. For me, and I would think many others of my age, when I see Clark stand proud with the actions of the protesters she is standing with that proud tradition, whereas Key’s vacillating pro-tour position seems to be attacking part of the New Zealand national story. Basically, Clark seems patrotic, while Key (as in other areas) seems to be talking New Zealand down. And again, it’s not just the issue of where he stood on the Tour, it’s that he tried to avoid telling us. Again, it comes down to trust.

Trickle-down

A few thoughts from today’s Agenda:

Questioned about why National would introduce another tax rebate, having endlessly criticised Working for Families because of its complexity, English says ‘we do, in the long term, want a simpler tax system’. So, be on notice, Working for Families is under threat from National - they would ‘eventualy, but not yet’ replace these targeted tax rebates with tax cuts (for the wealthy, naturally)

English deseperately trying to defend trickle-down economics without naming it was a little sad. He must miss the 1990s, when he could just say what he believes.

He says National would stand behind the vulnerable. The most vulnerable workers (people on incomes from $14K to $24K, working families where the parents each earn less than $44K, and anyone on Kiwisaver) would be worse off under National. Meanwhile, the most wealthy New Zealanders would get higher tax cuts the higher their income. National would stand behind the vulnerable alright, as they pushed them over the cliff.

Rawdon, ‘the top 20 countries getting together and coming up with a unilateral solution’. Saying unilateral rather than universial or multilateral once sounds like a slip up. Doing it twice in a row suggests you don’t know what you are talking about.

I’ve read everything David Skilling’s New Zealand Institute has published. Universally, the work is poorly researched and provides threadbare arguments, usually lacking any empirical evidence, that lead to a radical, neo-liberal pro-rich ’solution’. Look at his ’solutions’ to the credit crisis - tax cuts for business, selling off public assets, tax cuts for rich expats coming back. Basically, tax cuts for the rich masked as an economic package. No evidence that these would do anything for growth and nothing for most Kiwis. But ‘radical economic package’ sounds impressive, eh?

Nats letting the facade drop

We’ve been receiving reports of some appalling statements by National MPs on the campaign trail. They mesh with the arrogance and heartlessness that shines through in the secret agenda tapes.

A writer reports on David Bennet’s performance at a forum on mental health policy in Hamilton:

Mr Bennett came absolutely unprepared. he had no knowledge of the subject area, had obviously not even taken the trouble to contact the national party research unit nor the national party health spokespersons to get any insight into the area…he talked about the current economic downturn and international crisis, and used this to say that social services would not be so well funded in the future because of this. Unfortunately, I don’t have a recording, but if that is the policy, it’s appalling. When times are tough, they’re going to take it out on the vulnerable by cutting or capping funding? it sure didn’t go down too well at the meeting.

An outraged resident of Mapua wrote to us about Chris Auchinvole’s racist comments at a candidate’s meeting there:

When questioned on his view on GE he said he woudn’t want it in NZ but in tropical climates where workers won’t work hard it could be very useful.

These comments from Nats are really disturbing. If you hear a Nat revealing their secret agenda, let us know. It really is worth getting stuff on tape if you can, too. It is the only way the media will pick it up.

Even your Granny doesn’t believe you anymore

The Herald editorial this morning lambastes National’s crime policy as “simply a more extreme version of a policy that has failed this country and others” but Granny Herald consoles herself:

In all likelihood, this is not something that Mr Key will pursue if National wins the election. It is a policy calculated to strike a chord with those who despair of violent crime and particularly horrific murders. As such, it may capture the public’s attention. It can then be put quietly to one side as a more cogent, more flexible approach to sentencing and parole is adopted.

Even the Herald editorial no longer believes that National’s promises would be matched by action in government (incredibly, though, it doesn’t seem to care). As more evidence emerges daily that National’s promises are just a facade hiding their secret agenda, who would believe anything they say? 

Johnnie’s choice

With the second English secret agenda tape out, John Key was asked whether he was worried about whether he had been caught on a tape. His answer: “oh, look, who knows”

That’s a weak answer. A strong answer would be along the lines of ‘I’m not worried if there is a tape of me because I say the same things in private as I say to the people of New Zealand’. That was his line when the first English tape came out, before National knew there were more. Now, Key can’t be sure there isn’t a tape of him.

But, given that he has to err on the side of assuming there is a tape of him, Key could still have chosen a strong rather than a weak response if, and it’s a big ‘if’, he knew that he hadn’t been voicing National’s secret agenda in private. Only if there was no possibility of a Key tape emerging could Key run the strong line. If he has been talking about a secret agenda in private, he must run the weak line in case a tape emerges and he is shown to be a liar.

The fact that Key chose to run the weak line is telling. He must know that he has been talking about the secret agenda too.

Small change

That was going to be the title of my first post on National’s tax-cut plan but then it turned out National’s plan would actually make about 1 million taxpayers worse off compared to Labour’s cuts (all figures derived from the Budget and National’s tax policy). That 1 million comprises approx 650,000, including nearly all super-annuitants, on incomes between $14,000 and $24,000 and approx 350,000 on incomes between $24,000 and $44,000 who get Working for Families, Super, or a benefit. They would miss out on Labour’s threshold rises and National’s Independent Earner Rebate. Someone living on a trust or investment income does count as an Independent Earner for National.

Leaving aside, for now, the 1 million Kiwis and their families National would make poorer (and the 1.1 million on less than $14K who get the same amount from both parties), let’s look at what those who do get something get. If you are one of the 400,000 who earn between $24K and $50K and work or live off investment or trust income, and you remember to apply for the rebate, you would pay $7-$14 a week less tax by 2011 with National. Then there’s the 700,000 on high incomes, $50K to $100K. In this range, you’d pay $6-$14 less a week. After that, the sky is the limit: the 50,000 on $150K plus get at least $33 a week, at quarter of a million, you’re pocketing $72 a week. If you’re one of the thousand or fewer with an income over a million a year, you would get $360 and more a week from National.

It’s all small change at every level. The 1.1 million who would get an additional tax cut from National would see their after-tax incomes increase by 1-2% (the 600,000 on $14-24K would see theirs fall 1-3%). Nearly all of them would get $14 or less more than they would from Labour. About 300,000 of them would have to offset that against lost Kiwisaver contributions of $20 plus a week. 

Fewer than a quarter of taxpayers would get a net benefit from National’s cuts, with nearly all of the money going to the small number on more than $80K. Everyone else either gets nothing, gets less, or loses more in Kiwisaver contributions.

Key promised his tax cuts would lift the economy, close the wage gap, lower emigration, lift productivity, prevent doctors’ strikes… The idea that these cuts would lead to any of those promises being fulfilled is, of course, laughable. Key has had his big shot and he blew it. Now we know that, for all his hype, Key can only deliver small change.

Power to attack Nats’ new prison policy?

If he stands true to his principles, National justice spokesman Simon Power will soon be criticising the cost of their proposed new prison.

You’ll note in this story that National proposes to build a prison (for their new reactionary justice policy) at a cost of $314 million. That is $548,951 per bed. Or not far off the $650,000 cost per bed Power criticised Labour for spending on a bed at the new Milburn Prison in Otago and the $585,000 per bed at Springhill he moaned about. Undoubtedly, National’s prison would also come in over budget.

Oops. Will we hear a retraction? Or has National just switched from beating one populist drum to another, not caring whether they’re still playing the same tune?

Note to self - Mr Key will say what you want to hear

Mr Key will tell you what you want to hear. That’s the message that Pita Sharples has taken from his encounter with Mr Key over the future of the Maori seats:

Dr Sharples told Sky TV on Sunday night Mr Key had assured him the seven Maori seats would not be abolished till Maori agreed they should be abolished. However, Mr Key disagreed, saying no such deal had been done…

Dr Sharples, however, said National was saying one thing in public and another in meetings with the Maori Party.

Back in April Mr Key said:

John Key: our policy is to abolish the Maori seats, tied to completion of the historical Treaty settlement process, we anticipate that being around about 2014, at that point we would start the constitutional process. We’re up front and clear about that. (TV One, Marae, 5 Apr 2008)

Guess it’s not so up front and clear after all.

Changing the subject

Former National advisor Richard Long has let the cat out of the bag. The day before National’s much-hyped, cure-all tax cut package is to be announced, he is desperately trying to change the subject. National has nothing but tax cuts to offer, it has been their one consistent answer for every problem but, now, tax cuts are a liability. National’s tax package will disappoint on all fronts - it will certainly need more borrowing, it will be too small to affect the economy, and most people will be offered very little, certainly much less than the $50 people have been led to expect. A disaster of unmet expectations looms. So, National is suddenly, for the first time in nine years, keen to talk about something other than tax cuts.

The debates have become absolutely crucial. Long reveals this by making only cursory mention of tax cuts before devoting most of his column to the debates. National is now putting big resources into getting Key ready. Exceeding expectations in the debates will be all important. The Key we see will not be the bumbler - he will appear well-informed and give the impression he has solutions (which will be kept suitably vague). And he will be aggressive. Since he has no answers, he will have to be to shift the focus from whether or not he has anything better to offer to creating dissatisfaction with the incumbent. That is already evident in the wider campaign. Key has stopped even bothering to tell us he is ‘positive and upbeat’. Now, he doesn’t even pretend he is not being uniformly negative as he seeks to blame everything, including the largest meltdown in the international finance system since the 1930s on Labour. The debate will be the same.

The gambler’s great punt on tax cuts will come up a dud tomorrow, so Key will have to put all his remaining chips on outshining, even rattling, Clark during the debates. If he can’t, all bets on a National victory will be off.

Key still hopping on Hobsonville

At the first Helensville candidates’ debate last night, John Key reversed his position on state housing once again.

Despite using the years he lived in a state house as “a great marketing ploy”, Key called the plan to build state houses along with more up-market homes on the site of Hobsonville airbase “economic vandalism”.  Then he flip-flopped on that saying he supported the Government’s plans for Hobsonville. Last night, he reportedly flip-flopped again, saying that there would be no state housing at Hobsonville under National.

Once again, it seems he’ll say whatever his audience wants to hear.

With further economic turmoil coming, state housing is needed as much as ever. Building more houses will help charge the economy. Key wants mansions to be built, rather than state houses. But there won’t be the demand for such houses whereas there will be more unemployed families who can’t afford private rents. A Hobsonville with some state housing will do much more good in coming years than Key’s elitist plan.

I don’t know if such weighty considerations enter Key’s thinking, however. I think he just wants more votes.

[My friends were unable to make a recording of the debate but the Herald was there, so they'll report the details. It's also worth remembering that Key wasn't the only MP to grow up in a State house - in 1940s working class London, Cullen's family could only dream of such quality of housing]

Spray and hope

This is so funny.

Click on image for full zoom.

 

 

 

 

 

 

 

 

 

 

 

Great expectations

John Key is being pretty evasive on his tax cut plan. He won’t say whether the famous ‘$50 a week for the average worker’ (note that’s not every worker, your income has to be $47K plus) is additional to Labour’s cuts, the first round of which came into effect today. Given the evasiveness, it’s safe to assume that it won’t be. In fact, Key now refuses to even confirm that $50 range.

The other question is how the tax cuts will be funded. There’s little or no money in the kitty, so it’s got to be borrowing or spending cuts. Part will be borrowing. National says it woud borrow for infrastructure but that’s money it doesn’t have to fund through tax, the borrowing allows tax cuts. Cryptically, Key said this morning that National’s tax cuts would be bigger than Labour’s but the same on ‘a net basis’ because they would change ‘two things’.

So, what can these ‘two things’ be? One will be Kiwisaver. It is one of the few large areas of government spending that National has not guaranteed. National clearly intends to slash spending on Kiwisaver, presumably by changing the employer contribution.  The only other large area of government spending that they have not guaranteed is education but they can’t slash that. They need those middle-class mums to get them over the line. No, the second thing will have to be a change to Labour’s tax package. Specifically, they could remove the increases in the 21 cent threshold - currently set to rise from $14K to $20K in 2011. That would free up around a $1billion that coud be re-directed to cuts at higher incomes. Of course, that would mean smaller tax cuts for most people; most of the money would go to the well-off.

Whatever the package turns out to be, it had better be good. National has generated enormous expectations around tax cuts. They have promised a package that will be a panacea, solving everything from the recession, to doctors’ strikes, to emigration, to pain at the petrol pump. National has spent 9 years building expectations of the tax cuts it will offer.  Next week, they will finally have to deliver.

Take on Key

Greeenwoman has done it again, another brilliant video on Key using a classic music video: