ACT Releases Alternative Budget To Unleash Potential
- Balancing the books: Back in surplus in four years while delivering $3.1 billion of tax cuts.
- A wealthier country: Less debt, lower taxes, higher growth and incomes.
- Safety from future pandemics: $816 million over three years for border security, research and PPE.
- Getting Kiwis back to work: Fewer barriers to employment with 12-month trial periods and 3-year moratorium on minimum wage increases.
- New, independent Infrastructure Corporation: Responsibility for state highways and rail networks; clear KPIs for traffic speeds and freight movement; and ability to enter into public-private partnerships.
- Ambitious programme of pro-growth reforms: Cuts red tape in housing, primary industries, energy, transport and infrastructure, and overseas investment.
ACT Leader David Seymour has today released an Alternative Budget to unleash New Zealand’s potential in a post-Covid-19 world.
“Even without a lockdown, New Zealand would have faced a recession, with firms going out of business, higher unemployment, lower incomes, deficits and debt”, says Mr Seymour.
“This week, we face a stark choice between two basic strategies. The first path involves the Government taking on more debt, running the rebuild from inside the Beehive, and levying higher taxes to pay for it all. This approach nearly bankrupted us in the 1980s. The second harnesses the energy of the private sector with lower tax and debt, and less red tape, resulting in higher growth and wages.
“ACT’s Alternative Budget shows how we can take the second path, unleash New Zealand’s potential, and come out of Covid-19 as a richer country.
“Our first priority is getting New Zealanders back to work. We would remove barriers to employment by allowing businesses to hire workers on 12-month trial periods, returning the minimum wage to its 2019 level, and placing a three-year moratorium on minimum wage increases.
“Second, we focus government on its core job of protecting New Zealanders. Politicians have spent billions on buying votes while leaving us unprepared for a global pandemic.
“Our Budget would reduce wasteful spending on corporate and middle-class welfare. We can no longer justify nice-to-have spending that was affordable in good economic times. It is irresponsible to further indebt future generations without asking what savings we can make today.
“We would invest $816 million over the next three years to fight the next pandemic with stronger border measures, better research, and more protective personal equipment.
“We will restart the economy, not with wasteful handouts and massive public works, but by cutting taxes and red tape.
“Our Budget would temporarily cut GST to 10 percent until June 2021 to spur consumption. We would permanently cut the 30 percent individual tax rate to 17.5 percent, delivering a $1,300 tax cut to workers on the median wage, and encouraging New Zealanders back to work.
“These fiscal changes would get us back to surplus by 2024 at the latest in each of Treasury’s five scenarios.
“ACT also proposes an ambitious programme of pro-growth reforms by cutting red tape in housing, primary industries, energy, transport and infrastructure, and overseas investment.
“We can create a construction boom and reduce housing costs by replacing the Resource Management Act and amending the Building Act.
“ACT proposes to repeal the Zero Carbon Act and the bans on offshore oil and gas exploration and genetic engineering.
“We would replace fuel taxes with road and railing pricing and take infrastructure decisions away from politicians and give them to a new, independent Infrastructure Corporation.
“We would also welcome greater investment from OECD countries to boost productivity, wages, jobs and growth.
“New Zealand can respond to the current crisis, as we did in the 1970s, with protectionism and bigger government – that is, more debt, higher taxes, politicians picking winners with taxpayer money, and more barriers to employment, trade and investment.
“This would mask the economic pain temporarily, but it will leave us behind in the global economic recovery. Fortress New Zealand took us from being the third richest country in the world to 21st. Think Big proved to be an economic and financial disaster.
“Instead, we can unleash New Zealand’s potential with lower taxes and regulation. We can have a job-rich economic boom in the wake of Covid-19 for the benefit of the next generation.
“Government can create an environment for growth, but it must be the innovators, investors, businesses and workers who drive our response through a bottom-up recovery. History shows that an economic recovery is much stronger when it is led by people on the ground, rather than politicians and bureaucrats.
“Our Alternative Budget puts its trust in New Zealanders and presents a bold vision for a freer, more prosperous country. Economic recovery will come not from the Beehive, but through the hard work and aspiration of millions of New Zealanders.”
ACT's 2020 Alternative Budget can be found here.