Blaming Treasury not credible

It seems few people are falling for Helen Clark’s line that Treasury is to blame for no tax cuts in the last eight years.

First of all I know a fair few Treasury staff.  Yet to meet one who doesn’t think it is a good idea to cut taxes.  In fact they usually only disagree on whether a top rate of 25% or 20% is best.  Blaming Treasury for not being able to cut taxes is like blaming the Greens for the lack of a carbon tax.

The NZ Herald editorial accuses the PM of rewriting history.  She is.

The Government has been treating the surplus as structural for at least five years. It would not have set up the “Cullen fund” for superannuation if it believed surpluses could not be sustained. It was the Government’s choice to save or spend its annual excess revenue rather than permanently lower taxation. It always had the latter option and it is a bit rich now to blame advisers for the choices it made.

They also warn that the tax cuts must be genuine:

This time even Dr Cullen sounds resigned to finding “something for everybody”, though that means, he warns, not much for anybody. No matter, as long as the cut is not a selective “credit” like the family rebate a few years ago that only added to public liabilities. A genuine tax cutter does not differentiate between the overtaxed, he simply ceases to take more than he needs. Next year we might get it back.

Exactly the overtaxation should be refunded.

Brian Fallow writes on the same issue:

The Prime Minister’s attempt to blame the Treasury for the fact that we have not had personal income tax cuts already is hard to swallow.

Yes Treasury has been too conservative with their forecasts, but there has still been a surplus of surpluses from which tax cuts could be funded.