The Governnment has been rocked by a further advice release suggesting that its fiscal policy is anything but rock solid.
Two days ago I said:
The offshore gambling tax, estimated to be worth $716 million over four years, is looking decidedly unlikely. Labour thought National would be lucky to raise a quarter of that amount.
It appears that the IRD shares Labour’s pessimistic view.
From Thomas Coughlan at the Herald:
IRD has put up its own costings for the Government’s plan to raise revenue from online gambling, which have come in vastly lower than what National envisaged prior to the election.
National planned to raise about $176m a year by closing tax loopholes enjoyed by online gambling, reckoning it could net $716m over the four-year forecast period from the policy change.
IRD is less optimistic. In a Regulatory Impact Statement on the change, which will require offshore gambling operators to pay gaming duty of 12 per cent on gross betting revenue, IRD reckoned the policy would net $35m a year, rising by 5 per cent a year, about $155m over the four year forecast period.
That means that over the four-year forecast period, the gap between National’s pre-election costing and IRD’s works out at more than $500m.
IRD’s Regulatory Impact Statement makes the situation clear. National has hopelessly overcooked its figures by estimating that the amount of online gambling that occurs is way more than is likely. This was a pretty big gamble by National.
It is becoming increasing clear that either National and its puppet parties cuts deep into the public service or it breaks its election promises. Increasing smoking levels will not fix this.
It is no wonder that occasional Standard commenter Matthew Hooton thought that National’s policy was bollocks:
“National’s tax policy was much worse than expected. It reveals a party undeserving of being taken seriously.”
It should not take long for National’s electoral support to be hit. Winding back Labour’s previous offer to the Police while at the same time cutting free school lunches all so that landlords can get big tax cuts and claiming $52,000 for your own personal enrichment when a free alternative is available is not the way to make friends and influence people.