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ACT Declares May 3 Tax Freedom Day

The ACT Party has declared Thursday May 3 Tax Freedom Day.

“It’s the day we stop working for the government and start working for ourselves and our families,” ACT leader Richard Prebble said.

“The government takes 34 percent of all we produce. That means out of 365 days this year, we’re working 123 days for the government.

“In Australia, it’s just 100 days,” Mr Prebble said.

The Labour/Alliance coalition government has budgeted to spend a record $38 billion this year. It works out at about $200 a week for every man, woman and child.

“To calculate what politicians spend on behalf of your household just multiply the number at home by $200 a week. If there are two of you, your share is $400 a week. If there are five, it’s $1000.”

ACT has provided a breakdown of how the government spends your $200 a week. - $3.35 goes to the police to keep us safe - $3.18 on courts and jails - $6.05 is spent defending the country - $5.26 is the cost of roading - $9 for the civil service.

“So for about $27 we can have the criminals chased, convicted and locked up, roads to drive on, an army, navy and air force to defend our shores, and core services,” Mr Prebble said.

“So what do we get for the other $173? That’s where we get into the big spending.”

$76.48 a week is the cost of social welfare per person - health costs $34.74 for each man, woman and child (about $139 for a family of four) - education costs $32.60 - servicing debt run up by past governments costs $15 a week - $3.60 goes on business development and job-creation schemes - culture, heritage and sport take $1.76 Other assorted expenditure takes the total up to $200.

“Social welfare is the government’s number one priority and takes 26 days of your work this year,” Mr Prebble said.

“Police is the government’s 10th priority and takes just two days.

“If New Zealanders were asked to rank their spending priorities, would they put beneficiaries number one and police number eight? I suspect we would get a different result if households were asked how much they wanted politicians to spend.

“The answer may well prove something near $100 a week. This is the amount of tax and government expenditure that Inland Revenue studies show is the most congenial to job creation, high wage growth and tax compliance.”

Mr Prebble said ACT was doing a survey of 95,000 households, asking how much they thought they should pay in tax and where it should go.

“ACT intends presenting the results to Parliament – before the Budget – to help the government get its priorities right,” he said.

In the 1920, the government took just 12 percent of all we produced. The politicians grabbed a third more in the 1930s to increase the tax take to 16 percent. By the 1940s the state was taking one dollar in four.

Through the 1950s and 60s the tax take was relatively stable at about 25 percent. The 1970s saw a jump to 27 percent. In the 1980s it rose to 31 percent. In the first half of the 1990s we saw another jump to 35 percent.

Mr Prebble said if local body rates and government charges were added, the total taken by government would be about 41 percent of GDP.

The percentage would be much higher again if only working households were included in the calculation.

“Many people are not really taxpayers. The income tax on benefits is nominal and it’s all taxpayer money anyway. So taxpaying households work for the government most of the year,” he said.

ACT intends to also calculate Tax Freedom Day for a working family.

“For households paying 33 percent income tax, when you add GST and fuel taxes, it’s got to be in July and for those on 39 cents, probably August,” Mr Prebble said.

ENDS


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