Tax cuts: a tool of the past?

There have been two significant items of news this week. General Motors has announced the end of the Holden, the ‘‘retiring’’ of a brand that has played a big role in driving the Kiwi way of life for decades; and National leader Simon Bridges has given an insight into his party’s election-year economic policy, including the tease of tax cuts.

At first glance there seems little to connect the two, but on closer inspection they suggest nostalgia for a past when the faithful Holden would last forever, politics was just two cars racing to get past the post, and the promise of tax cuts a reliable fuel to power the endeavour.

But the Holden is pushing towards a twilight of electric blue, which is maybe where a political party leaning on tax cuts to sway the electorate should also be.

Just as we can no longer be complacent about the impact of petrol cars on the environment, more politically savvy voters will rightly be wary of National’s business-as-usual approach in such rapidly changing times.

The current Government has made much of its work to address neglect of infrastructure by various administrations, including the previous National one. It is investing $12 billion towards improving schools, hospitals and roads, in part to fix what it calls ‘‘nine years of neglect’’.

That extends to the human resource in our schools, hospitals and elsewhere. Bridges and his finance spokesman Paul Goldsmith are promising to at least match that effort.

Also, tackling climate change and building resilience are going to cost a lot of money, the burden of which may be felt most by the vulnerable and less wealthy in society.

It is right to ask how a National government might be able to meet those challenges, and more, while also putting billions of dollars back into our pockets.

Bridges has teased the tax cuts, leaving Goldsmith to hint at what services might be targeted to pay for them.

He might be right that there is trimmable fat in Shane Jones’ Provincial Growth Fund or ‘‘poor quality’’ spending elsewhere, but tucking too much into student fees or KiwiBuild’s budget is likely to be less popular.

That Goldsmith and his colleagues are looking at these and other funds gives credence to what Finance Minister Grant Robertson is saying, that tax cuts always come with a tradeoff.

In the days when the Holden ruled the roads, we cared less for that tradeoff, and possibly more for the illusory boost in our standard of living. Nowadays, however, we are not so swayed by the mirage.

More money in our back pocket has to come from somewhere else, often from people and policies that need it more. And often at the expense of other things we regard as important when we tally up the cost of living.

We also understand that this country is one of the most lightly taxed in the world, meaning taxation is less a burden and more a good way to ease our journey into an uncertain future.

As the petrol-powered Holden and lolly scramble of tax cuts recede in the rear-view mirror . . .

The Holden is pushing towards a twilight of electric blue, which is maybe where a political party leaning on tax cuts to sway the electorate should also be.