The Key Speech

John Key’s speech to parliament today hardly signalled the commitment to reform he has been talking up. Summaries of the speech here and here, with commentary with which I largely agree here.

There’s unlikely to be much in the way of tax reform.  With only the possibility of a 2.5% increase in GST, probably some minor tinkering with depreciation rules, and no indication of spending cuts, there could only be very minor reductions to income and corporate tax rates.  The rejection of the introduction of new taxes, notably on land, is good, though for public choice rather than public finance reasons. There was some empty rhetoric about welfare reform, but major changes to the god-awful Working for Families were ruled out.

One thing really pissed me off though: the suggestion of unspecified reforms to liquor licensing rules to address the Problem of Binge Drinking. This means that beer is likely to get more expensive and less conveniently available so the government seems like they’re doing something. Not cool, John.