The Mendacities of Mr Key #3: tax cuts



john key lying


3. Tax cuts


19 May 2008

In the bitterly contested lead-up to the 2008 general election, National promised three tax cuts, to be spread over three years.

These were  prompted by the nine consecutive Budget surpluses that Labour’s Finance Minister, Michael Cullen, had posted between 2000 and 2008. The public perceived that the government had too much of our money and demanded tax cuts.

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Cullen resisted, as his main priority was continuing to pay down billions in debt that Labour had inherited in late 1990s.



Key  and  National Party strategists heard the insistent  calls for tax cuts, and duly obliged – even though by November 2008, the global financial crisis had plunged the world into a recession, with only Australia and China escaping the worst effects.

In May 2008, Key promised voters tax cuts ‘‘North of $50‘‘.

April 2009

On 1 April 2009, National delivered the first of two rounds of tax cuts (a third round had been scrapped, as by then the recession had blown a hole in the government’s revenue).

This is what the 2009 tax cuts delivered.




Anyone earning under $40,000 received nothing. Not even close to “north of $50”.

October 2010

The following year, the second round of tax cuts was implemented,


Tax rates October 2010


Susie Nordqvist wrote in the Herald on 20 May 2010,

* Average income household – $24.71c per week better off

* Average wage worker – $15.91c per week better off

* Couple receiving New Zealand superannuation – $10.77c per week better off

* Professional property investor with 25 properties – $288.18c per week worse off

* Couple saving for their first home – $40.38c per week better off

* Domestic purposes beneficiary – $2.45c per week better off

* Minimum wage worker – $6.36c per week better off

* Student – $2.66c per week better off

* Business owner structuring income to claim for Working for Families – $153.03c per week worse off.

As the reader can easily determine, very few in the above group were receiving “north of $50”. When the rise in GST was taken into account, the actual real cut in  taxes for average workers’ and families was reduced even further.

The only tax bracket that received a tax cut “north of $50” were those earning around $80,000 or more. Such as government ministers. And John Key.

When you factor in the rise in GST from 12.5%  to 15% – even fewer got the much promised “north of $50”, except the wealthiest.


Key defends tax cuts for wealthy



  1. Key had no choice but to cancel the third round of tax cuts (scheduled for 2011), and to reduce the amount on offer. The GFC and recession were biting into our economy so badly, that National was borrowing $450 million a week by the end of 2009. Adding the 2010 tax cuts into the mix eventually left this country with a $60 billion fiscal hole.
  2. Key knew that the tax cuts were unaffordable during the 2008 election campaign. The world was deeply mired in the global financial crisis and recessionary effects were beginning to hit economies around the world. To pursue the promised tax cuts was the height of irresponsibility.
  3. Key bought the election with unaffordable promises.
  4. Our debt will have to be re-paid. (Foreign creditors insist.)

Beware of politicians bearing promises and gifts. We will be the ones paying for it.

Verdict: mis-information/half-truth/deflection/broken promise/lie:

Broken promise.

Outright lie.





NZ Herald: Cullen – Tax cuts but strict conditions

Trading Economics:  New Zealand Government Debt To GDP

Dominion Post: Nats set for $50 tax cut trump

Otago Daily Times: Key says donate tax cuts to charity

NZ Herald: Budget 2010: What the tax cuts mean for you

NZ herald: Key defends tax cuts for wealthy

Parliament:  Tax System Changes—Impact on Operating Balance

Otago Daily Times: Government now borrowing $450 million a week – claim

Radio NZ:  English confirms national debt set to rise

Previous related blogposts

Labour: the Economic Record 2000 – 2008




Vote these traitors out

Above image acknowledgment: Francis Owen



= fs =


  1. Frank Macskasy:
    Thank you for so thoroughly documenting, complete with references, what many of us remember to have been an outright ‘Key lie’. I admire your commitment to truth, to honesty, and to the value of accurate and well-documented research.

    I find it just unbelievable that so many of the public swallow, uncritically, hook-line-and-sinker, without question, what they are told (i.e. sold) by our current government.

    Has perhaps politics, and more importantly, the discernment of “political honesty and integrity” simply become beyond the comprehension the “average person”?

    I’m referring to the latest poll. . . . . depressing, to say the least.
    It seems that the more a politician lies to the public, the more his/her party goes up in the polls.

    Very depressing, indeed. (But then again, thank heavens, there’s only ONE poll that really counts!)

    Oh well, TOMORROW: Another poll,and another set of political lies from our duly-elected professional liars to go along with it . . . .

  2. Frank – the spin is always about ‘the loony left’ and ‘the magic money tree’ and how scary the Greens are. To this moment I can’t see any evidence, nor any track record.

    For me, National has always been the party with toes in the muck and head in the trough, spattering largesse over the unsqueamish. Tax, borrow and hope is actually their mantra and track record – and I’m amazed that people can forget such smack in the eye evidence as GST and repeated petrol tax hikes.

    Yet, the nagging is all around urging Labour to ditch the scary Greens. It’s not evidence-based: it’s about beliefs and emotions, and they’re the hardest to turn around.

    What’s the ethical counter-story here? Who’s going to stay on message for the months and years to come?

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