Mike Hosking Breakfast

The critical part missed yesterday in the great National tax scandal debate is not whether tax cuts are inflationary; it's the right of people to hold onto their money. You can also add it was a storm in a tea cup, given it's not election year. Until it is, opposition parties shouldn't really be in the business of announcing policy because not all of us are engaged. So, here’s some simple economics on tax. If you cut tax is all that money spent? No. A lot of it is saved. If it's taxed and taken by the Government is it spent? Yes. We know this because the Government has spent every cent it’s got and then billions more it has printed. Is putting money into the economy inflationary to some degree? Yes.   So, if less money goes into the economy because of tax cuts versus more money going into the economy because the Government took it, which action is more inflationary? It's the latter. Then we come to the simple premise on spending. Governme