Saturday, May 24, 2008

Bang go the tax cuts - one day after they are announced. No one with a mortgage is better off

Bollard has announced that the Reserve Bank is to delay lowering the OCR until at least after the election because of the tax cuts in the budget. Or was it because the IMF said to. Or was it because he doesn`t want to lose his job for repeatedly exceeding inflation targets.

The economy is now in a pot hole and now no one with a mortgage will be better off as a result of tax cuts purely because Bollard wants to keep his job.

That's because what many homeowners get in one pocket from tax cuts may be cancelled out by a delay in reducing interest rates. So although the Government is spending all the money, we're no better off. Except, of course, if you are a pensioner and you've paid off the mortgage.

Michael Cullen supports the IMF report. He is more concerned about trumping a National tax policy than he is for the struggling average Kiwi bloke trying to stay afloat paying their mortgages, putting food on the table and clothes on their children's backs.




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