More austerity: New Zealand

[Hannah Bell]

The New Zealand government’s 2010 budget, announced on May 20, has instituted a new round of attacks on public services and living standards, while engineering a tax windfall for the wealthy. The budget, which parallels the austerity measures being carried out in Europe and elsewhere, is further evidence that in every country working people are being forced to pay for the bailouts of the banks and financial institutions...

Figures released with the budget reveal the annual deficit is running at $8.6 billion, or 4.2 percent of gross domestic product (GDP). Despite government boasts that the figure is lower than many other countries, it is well above the maximum of 3 percent of GDP that eurozone countries and Britain have imposed to meet European Union “stability” criteria...

The International Monetary Fund (IMF) recently issued a blunt message to the government to cut spending on welfare, student loans and doctors’ visits in order to get its books back into surplus. The IMF noted that the sharp increase in forecast public spending between now and 2015 was a “structural” issue of major concern. The agency demanded a return to budget surpluses by 2014, saying this was necessary to respond to any future crisis.

The budget accommodated these instructions, starting with a savage increase in the goods and services tax (GST) from 12.5 to 15 percent. This is one of the highest consumption tax rates among OECD countries and, because it provides for no exemptions, among the most onerous...Income tax cuts of $14.3 billion over four years, which were promoted as offsetting the GST increase, are massively weighted in favour of the rich. The top income tax rate will be cut from 38 to 33 percents, giving the wealthiest 1 percent of income earners 12 times the reduction of the average earner... Company tax is cut from 30 to 28 percent, costing $1.1 billion over 4 years, and is timed to come into effect a year before similar reductions planned in Australia...In a pre-budget announcement, Key shamelessly defended the budget, provocatively telling ordinary people not to be “envious” of the tax breaks for higher earners. He declared that the wealthy were essential for “the core and critical categories of our economy”...

http://www.wsws.org/articles/2010/may2010/nzbu-m31.shtml


Other measures:

-- cuts in health care
-- cuts in education (new zealand is further along on the privatized ed road than we are, btw)
-- cuts in welfare/families spending
-- more cuts & privatizations of state assets coming

[Lorien]

1. The IMF is one of the most destructive forces on the planet

and it's been very clear who they are serving:

"In a pre-budget announcement, Key shamelessly defended the budget, provocatively telling ordinary people not to be “envious” of the tax breaks for higher earners. He declared that the wealthy were essential for “the core and critical categories of our economy”

This is the lie they'll continue to champion until we truly start to fight back. Move your money, buy local, used, handmade, barter, grow your own, work outside of their system. It's time for more organization and more action across the globe!

[leftstreet]

2. Jeez! It's like aliens have landed on the planet!

This 'austerity' shit is happening everywhere, and it's coming faster and getting waaaaay underreported.

This is really scary stuff

K&R

[wickerwoman]

3. National's going out on its ass in next year's election.

They've already pissed everyone off proposing mining in protected areas and the Auckland supercity debacle.

This would be another nail in the coffin, but there's nowhere left to drive a new one.

[Greyhound]

4. How does the IMF have any authority to tell NZ anything?

[Hannah Bell]

6. good question. i'd guess because nz either got a loan or wants one.

but i still fail to see how that gives imf power to dictate policy.

sure does say something about who's running the world, though.

[TheKentuckian]

5. Nowhere to run to baby, nowhere to hide. Time for the global uprising