The Labour party, the ETS and the dairy farm.

It seems John Key has set about trying to destroy Labour's plan to bring farmers into the ETS in 2013.

Key says " the only impact of that will be to make our biggest exporter uncompetitive on a world scale and ultimately make New Zealanders pay more for milk, butter, cheese, meat and all the staples of a New Zealand diet".

Andrew Ferrier, CEO of Fonterra, says that this is not true as the milk and dairy prices are set by the international market.

I have two points to make on this, the first is that last year the average amount of tax paid by a dairy farmer was $1508, the second point is that this year Dairy farmers are set for a record payout of $8-$8.10. So, dairy farmers do not pay their fair share of tax (it is also important to keep in mind the levels of debt they may have and business expenditures because farms are very expensive).

Now here is where we must make some clarifications, so far I have only talked about dairy farms, whereas sheep and beef farms (or any other farm which produces meat) are very different and if Labour gets the chance to introduce this plan they must keep this distinction in mind.

The money raised from this will go to fund a 12.5% tax break for research and development. In order for this to work and gain public support Labour needs to do two things, firstly as the money is coming from an ETS tax it should go to develop technology that will directly benefit New Zealand environmentally, secondly Labour must make sure to explicitly state that dairy farmers cause a lot of harm to our environment (particularly our waterways) and that the R&D tax cuts will go to help alleviate this.

One particular question pops into my mind when I think about National's objection to this. Why are they really opposing this? Farmers are a big part of National's constituency and if they did support this they would very likely lose a lot of votes. It may very well be true that National does support this but because of their financial backing from the rural sector and the possible loss of votes, they just can't say so.

Is this just another case of the corporate interests driving our politicians?

I call him Gamblor, and it's time to snatch NZ back from his neon claws!!!

So it is budget day eve, tomorrow we will see exactly what it is this Government has in store for our economic future.

By all accounts we are going to see English present us with a budget that has many plans which will n0t take effect until after the election. It looks like John Key has said to Bill, "Hey Bill, do you think New Zealand likes me? I want to know but I'm afraid to ask. I know, you could write New Zealand a note and ask if he/she likes me." If New Zealand votes Key back in, we like the budget, if he doesn't get voted in Labour may reverse the budget.

So, what are we going to see tomorrow? Cuts, cuts, cuts is the short answer. For the first time in a very long time we will see a zero budget (no increase in spending), yet at the same time Key has promised us increases to health, education, justice and infrastructure. In order to keep spending the same over all yet increase it in certain areas they have to make big cuts.

Where are the cuts going to come from? Kiwisaver, student loans, working for families and "government departments" are where Key has said there will be cuts but beyond that we have no specifics.

Within the "Government departments" the chief executives are being left up to their own devices as to how they meet their targets. The most likely outcome is the slashing of backroom staff. What we keep hearing from Key and co. is that our Government departments are too big and inefficient, we must put more emphasis on the front line staff. In some cases this may be true though I have seen little evidence of it. In reality, the place where memorable, emotive five word catch phrases don't work, it is the back room staff who do the necessary work so that the front line staff can do theirs.

This Government is currently borrowing over $300 million per week and they plan to get us back in the black by cutting services and leaving it up to the private sector. Hang on a minute, wasn't it the private sector and de-regulation that got us into this mess?

So with Key and English placing their bets, how will it end? Red or black?