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COVID-19: Government Must First Do No Harm

  • Government should reduce anti-growth impacts of regulation and tax.
  • Pause introduction of new regulations, cut taxes and redirect wasteful spending.
  • COVID-19 measures must be time-limited. A crisis should not be used to hide permanent reforms.

“The Government’s response to the economic impacts of COVID-19 must be to ‘first, do no harm’”, says ACT Leader David Seymour.

“It is inevitable that the Government will spend more to stimulate the economy, but its first step should be to avoid the anti-growth impacts of regulation and tax.

“Instead of keeping taxes at current levels only to give it back to New Zealanders, the Government should allow workers and businesses to keep more of what they earn, with lower tax rates across the board for the next 12 months. ACT proposes the following tax rates:

  • 10 percent on income under $14,000
  • 15 percent on income between $14,000 and $48,000
  • 25 percent on income above $48,000
  • 25 percent company tax rate.

“Cutting taxes for the next 12 months will preserve jobs and promote economic activity at a time of massive uncertainty.

“The Government should also delay by 12 months the introduction of any non-coronavirus-related regulations to avoid adding to the cost and uncertainty of doing business.

“This includes next month’s minimum wage increase and proposals such as new tenancy laws and freshwater regulations.

“ACT and a chorus of economists have said for almost two weeks that the minimum wage increase must be delayed to preserve as many jobs as possible.

“Corporate and middle-class welfare should be redirected to help struggling businesses and workers. Spending $5.6 billion on Fees-Free and the Provincial Growth Fund was bad enough in good economic times. That money must instead be redirected towards preserving jobs. This will have the effect of reducing the amount the Government needs to borrow.

“We accept that government expenditure will rise during this crisis, but it must return to pre-crisis levels as soon as possible.

“COVID-19 must not be used as an excuse to permanently expand the size and scope of government.”

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