Rinky Dink Flip Flopping Flip Floppers
Yes Christopher Luxon is now Liz Truss in drag after the massive flip flop yesterday by National as it finally saw what everyone else had seen a year ago – that transferring hundreds of millions of dollars of tax payers money to the most wealthy 3% of income earners was a bad, stupid, inflationary idea in the current volatile economic conditions around the world.
We’re all coming out of a global pandemic at the same time and Grant Robertson knew he had to get us through with a careful balance between fiscal policy and the monetary policy of the Reserve Bank. That’s why at the beginning of the year Grant established declining budget allowances in the years ahead…and ensured Government Spending tracked down to the long run average of 30% of GDP.
Nevertheless the flip flopping opposition decided that it would announce tax cuts at the peak of Omicron in early March 2022 and promise to repeal all of Labour’s taxes along with a tax cut for all earning over $180,000. These were fiscally irresponsible election bribes and so rinky dink that the flip flopping National Party never even bothered to cost it all.
Christopher Luxon stood before a green screen and tried to sound like he would get things done.
Truly a wizard of Oz moment in all its clumsy fake marketing and rehearsal.
At the exact same moment Jessica MuckInMyEye at TVNZ 1 News salivated over a new Kantar Poll that was underway – a poll that would see if Christopher’s election bribes would give National a big push up towards Labour.
The election bribery at a time of great mental stress under the hammer of Covid worked and there were huge celebrations amongst the Press Gallery that Luxon had “steadied the ship”.
“Well, well, well, take a bow Mr Luxon” – was the headline at the NZHerald and Claire Trevett rejoiced at the marvel of Christopher’s first 100 days after the great reset.
During these months Christopher Luxon successfully sold a message of blame on “Government Spending” as the biggest driver of inflation on uncontested media platforms.
“Grant Roberston is addicted to spending” repeated Luxon on NewsCrap ZB, on Newshub AM, on TVNZ 1 News, ON TVNZ Breakfast and even on RNZ ( if he could avoid Susie ) while media sat blinking like really dumb wombats.
Luxon argued that international factors had a small bit to do with all things inflation and that international factors were all just excuses from a desperate government who had utterly mismanaged the economy.
Of course the truth is that today the inflationary impulse from the wage subsidy and business resurgence payments is actually negative and actually has a drag on inflation – a point Luxon avoids talking about.
Further – the Reserve Bank has made it abundantly clear that Government spending was small beer compared to the international shocks – like the unforeseen war in Ukraine and supply shocks in China. Plus nobody could see the future – with Americas Federal Reserve arguing inflation was only transitory.
It was not until Jack Tame confronted Luxon in late April 2022 that it became clear Luxon could not back up his factually incorrect spin with examples of Government Spending that could explain the effects.
The examples were all far too small – so the Flip Flopping National Party stopped calling “Government Spending” the biggest driver of domestic inflation – and subtly modified it – to “government spending only pours more fuel on the inflationary fire.”
Boris was in trouble by the time flip flopping Luxon arrived in the UK only to be stood up by every Tory MP he had counted on for a photo opportunity – and Liz Truss would soon step in with her legendary Tax cuts.
New Zealand media ( Jenée, Thomas, etc ) all paddled hard for National to try and illustrate why Luxon’s tax cuts for the most wealthy were not the same as Liz Truss’s tax cuts for the most wealthy.
But they were pretty much identical in their stupidity and poor timing.
Brad from the flat was inserted in the way by Nat loving media – saying no comparisons could ever be made between Luxon and Truss and their tax cuts …to try and shield National from the embarrassing reality that it had better back down on pure insanity.
On 4 August 2022 the flip flopping National Party flip flopped and then flip flopped back again in one day – and the Tax Payers Union ran down the streets of social media screaming that talk of a flip flop on tax were greatly exaggerated.
“We will be providing permanent tax reduction that adjusts the tax thresholds as we presented in January as a minimum,” the flip flopping National finance spokesperson said.
Nicola Willis tried to separate out the earlier “election bribes” and gradually over time step away from these vote catching bribes – using whatever excuses worked in a culture of excuses amongst National voters.
National wanted to backtrack on their tax bracket shift settings, promised so confidently back in March 2022 because they had finally seen they could not afford them down the track – while two days later on 6th August 2022 Liz Truss announced “she would use tax cuts to tackle the cost of living crisis”
Only a few days later again – at the National party Conference in early August 2022 the flip flopping National Party were still doubling down on tax cuts and flip flopping flapper himself Chris Bishop told media that his flip flopping party was still committed to the 39% tax rate cut for the most wealthy income earners – come hell or high water out on the flip flopping economic mud flats.
At the same time the RBNZ released another OCR hike of 50 basis points and made a projection ( its best foot forward at the time ) that there would be bugger all GDP growth in 2023.
Everyone knew for months that we have a contraction in aggregate GDP growth coming up for a sustained period of months in 2023 and everyone also knew that the OCR would continue to rise next year.
There was some doubt about whether we had passed peak inflation but in general everyone wanted that to be true.
National calculated that if people did not know much about these matters – it could exploit these facts in more deceptive spin – and media was not “onto it enough” to call them to account.
Everyone knew it was a bugger of a time for making accurate predictions – and National were stagnating in the polls as they now hesitated and tried to unsay what they had previously said.
Every single economist in New Zealand was duped into thinking inflation in the June Quarter would decline to 6.4% so when it came in at 7.2% – media ran round like Judge and Jury lashing out at Adrian Orr ( Jenée, Fran, Steven Joyce, Duplicity etc ) – until it was made clear by Paul Conway that – even if the RBNZ had acted earlier in 2021 to raise the OCR – the difference would be only 1% in CPI Headline Inflation now.
Despite knowing inflation was sticking around, knowing that GDP growth was bugger all next year and knowing that the OCR would continue to rise to do it’s job next year – Flip Flopping National still determined that they would stick with the 39% top tax rate cut despite the well signalled projections.
Luxon doubled down against a barrage of media attacks when the CTU published figures showing the flip flopping Nat tax cuts would cost $11 Billion over three years.
$2.15 a week for a minimum wage worker in a cost of living crisis said it all – while Luxon would scoop up tens of thousands in undeserved tax relief that helped nobody in a cost of living crisis.
Soon Truss was resigning after sacking her finance minister and everyone shook their head at how stupid the Tory tax cuts were.
The Nats saw the fallout as Joe Biden called Truss’ tax cuts a mistake.
The flip flopping U-Turn for the Nat’s had to be staggered and spread out so nobody much noticed if possible.
The Nat’s had planned to flip flop on Tax yesterday as could be seen by the way Luxon suddenly shifted his rhetoric in an interview with Thomas Coughlan at Midday ( two hours before the announcement ).
Luxon spoke about how he’d always said the economic conditions would determine what National would do – ha ha ha.
Straight after the 75 point rise in the OCR announcement yesterday – Luxon was before cameras spinning the flip flop.
Kim Hill cornered Nicola Willis this morning – forcing her to admit – it was only after seeing the OCR rise yesterday that National were dropping the 39% tax cut.
Kim also pressed home that there was not much of a surprise about yesterday’s announcement.
Every economist predicted it – every bank thought it would happen…but truth was Luxon had to drop the election bribe that had become a thorn in his side.
Today Luxon is making out that there was a huge shock yesterday because – who knew GDP might be slightly negative ( 1% ) next year – and who knew we may not have passed peak inflation and who knew the OCR would still go up.
“We are where we are because this Labour Government has totally and utterly mismanaged our economy and failed to have a plan to tackle inflation”, said Luxon to his cellphone last night.
In summary Luxon had bribed the electorate far too early in 2022 with unrealistic tax cuts that were unaffordable and not targeted, not tailored and not temporary.
Luxon would have mismanaged the economy and he was the last to learn that – backing down slowly to soften the fallout.
Just like Liz Truss, Luxon wore the criticism now for his political expedience earlier.
Claire Trevett was no longer clapping over on the wallflower seats at the NZ Herald.
So it was that people laughed and said you can’t Truss Luxon as Luxon applied his lipstick and smacked his lips before a mirror, dressed in only a tuxedo, his sandals and shorts – and he strode to his seat before the green screen.
“Only National can save us with sound economic management…”, said the painted bald clown, reading off the cue cards, that flip flopped around what would gain more votes for the clown …not what was best for you or me.
Rinky Dink Flip Flopping Flip Floppers