Friday 3 May

The latest OECD report on New Zealand validates ACT's criticisms of the government's economic direction, and endorses ACT's positive solutions, ACT leader Richard Prebble says.

"The OECD report is severely critical of taxpayer fund-wasting proposals such as Kiwibank and the Air New Zealand bailout. ACT has led the criticism of this kind of social welfare for business," Mr Prebble said.

"The ACT Party, which has been setting out the case for a fundamental re-write of the Resource Management Act, finds our position endorsed by the OECD.

"The OECD has also agreed with ACT's criticism of school zoning, as being the wrong way to improve education standards.

"The report even endorses ACT's call for the government to adopt the McLeod Tax Review's recommendation to reduce the top rate of personal income tax.

"The OECD, which New Zealand has belonged to for 30 years, has a detailed knowledge of our economy. Its previous reports on New Zealand have time and again been proved correct. It is regrettable that the present Labour government, buoyed by a rural boom which it did nothing to create, will no doubt reject out-of-hand the OECD's advice.

"It is worth noting that Treasury officials from New Zealand are seconded to the OECD, and the Treasury uses the OECD report to set out what it really thinks. So these reports can't be dismissed as some sort of academic musings. They represent the considered views of experts who are knowledgeable not only with regard to the New Zealand economy but also the leading thinkers on economics in the First World.

"ACT's only significant difference of opinion with the OECD is that organisation's continued support for a capital gains tax. This is a blind spot of European economists, raised in societies where everyone rents, who don't appreciate the social advantages of a home-owning democracy.

"ACT believes a capital gains tax is, in effect, taxing people twice. In a country like New Zealand, that is short of capital, such as tax makes no sense," Mr Prebble said.

ENDS

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