Wednesday, July 4, 2007

ZenTiger Its too late to turn back

We've all been so worried about peak oil, it is not surprising we were caught unawares. But it's too late. We are adrift on a Cruel Sea, and it's too late to turn back. Scientists stand befuddled, their calculations awry. To be fair, no-one really saw it coming. Well, no-one in New Zealand. Well, bugger all.

We've hit Peak Tax. Cullen was so busy collecting it, he forgot to check the reservoirs. From here, it’s all downhill. Sure, Labour might bring in some heavy duty extraction equipment for another term, but it will be their last. Tax will go the way of the Moa.

In response, Cullen will push the extraction rates up, but the BOC (barrels of cash) per day will dry up as businesses downsize or move off-shore.

The problem has really been one of conservation. There was plenty to go around, but it was guzzled by big government. Another 6,000 fat bureaucrat salaries in Wellington slurped up Dunedin's worthy contribution. Renting prime office space and buying computers for these new bureaucrats did away with the cash pumped from the hard working folks in Christchurch. Westport reserves paid for training courses and staff parties. Wellington tax went to Wananga and Auckland’s taxes have recently helped repay government debt. Jonathon Hunt’s taxi bill was finally settled.

Government consumption of our resources was at 32 billion BOC in 1999, now it looks to top 60 billion in 2005.

"This kind of consumption is not sustainable" said Dr ZenTiger, opening speaker at a conference to discuss the problem of Peak Tax. "We've seen it happen recently in Ireland. They peaked several years ago. They had pumped the top tax rate to 80%. Company tax was at 40%. They were spending like it grew on trees. Of course, we know it doesn't."

What was the solution? It might surprise you. Dr Zen explains:

"Ireland knew they had to manage supply. They cut the extraction rates dramatically. Company tax from 40% down to 12.5%. The top rate down to 42%. A flatter structure. 20% tax on the first NZ$50,000. No GST on food. That sort of thing."

Did it work? "Well put it this way. There's a damn sight more Leprechauns and Rainbows than 10 years ago".

"And what for NZ?"

"Well, essentially, it's doing more with less. It's all about responsible management and removing demand in a way that will not affect our social environment. It might mean cutting out the weird government schemes – hip-hop, job jolt, showing toilets in Vienna, sing-along radio, that sort of thing. Cutting expensive TV advertising, canceling the subscription to Kyoto Monthly. The government simply has to tighten its belt and focus on its core functions.

For many years the government has acted like it needs a v8 to blast across the Canterbury Plains at 180kph. There is no rush. If you miss one boat, you just get the next. A Toyota Hybrid would have got to the next plane flight and used a fraction of our tax resources. Without breaking reasonable limits. That really is the message to the government – stop breaking the limits.”

There is only one party with the environmental sensitivity to manage Peak Tax - ACT. You can give your party vote to ACT or you can watch the last of it being sucked out of the wallets with the best equipment IRD has to offer, and those clever buggers have done a good job, you got to give them that.

Party Vote ACT. The Greens want to use the last of our tax on Peak Oil. Labour want to use it on Peak Government. NZ First on Peak Immigration. United Future on Peak a-boo. National have shown some hope, but unless they show commitment to tax conservation, and work with the experts in the field, it will be too little too late. If you don’t believe me, check your letterbox. You’ll find your rates bill (up), your power bill (up) and your bank statement (nearly dry). Peak Tax is not a myth. ACT now.

Note: ZenTiger does not work for ACT, nor is he a member of ACT. He's just going to vote that way this time around. [Reprint post from Sir Humphreys 15 Aug 2005]

5 comment(s):

ZenTiger said...

Yet another extract from Sir Humphreys that I thought I may as well preserve here.

It was also one in a series of many posts where the post title relates to a song tile, and the group or singer was woven into the post.

And why not?

Unknown said...

The total number of new state sector employees across the country is 24,000. Almost double the number under National. It is painfully evident we are not getting any value for money however. (e.g. hospital waiting list has doubled, police are a shambles, no defence force left etc etc.)

It can only be said that Labour was wasted the best economic conditions in living memory. The bloggers began to be aware of this about 2004/2005. I suspect that come the election the situation will be so bad that many economists will realise it too, and perhaps (though I'm not holding my breath) even the media.

Anonymous said...

I personally believe this a deliberate Labour tactic. They know at some stage in the next 5 years or so they will be kicked out. They know the numbers of public service appointments they made are untenable.

The new government will have to cut them and lo and behold watch the Labour opposition scream.

Anonymous said...

Peak tax? Which side of the laffer curve peak are we on?

ZenTiger said...

I'll tell you after the next election :-)

Post a Comment

Please be respectful. Foul language and personal attacks may get your comment deleted without warning. Contact us if your comment doesn't appear - the spam filter may have grabbed it.