ACT backgrounder: Simon Chapple and Jonathan Boston on rolling the dice on a minimum wage increase

“Some advocate raising the minimum wage significantly to reduce child poverty. Unfortunately, lifting minimum wages will do little for child poverty.

This is because most of the extra wages received by parents on low incomes will be clawed back by the Government. The most obvious losses are through income tax and ACC levies.

Further, families partly reliant on welfare benefits and partly on paid employment may lose part of their benefit. In addition, Working for Families payments and housing assistance are reduced as earnings rise.

Consequently, net family income may grow only marginally for many families, even after a considerable rise in minimum wages.

Furthermore, a large hike in the minimum wage can result in job losses. New Zealand’s minimum wage is among the most generous in the OECD relative to average earnings, and the most generous relative to earnings in our history. Going much higher takes us out of our zone of historical experience.

Although past minimum-wage rises have not resulted in large job losses, we know that at some point they will.

Advocating large rises in minimum wages means rolling the dice on the jobs of the least advantaged employed people.”

From “New deal for kids” by Jonathan Boston and Simon Chapple, Listener, 21st June 2014

Boston and Chapple are co-authors of Child Poverty in New Zealand (2014)


Why are we letting a convicted German fraudster and his American polemicists steal our election?

"It is safe to predict that in 12 months time these American polemicists that Mr Dotcom has flown in will be forgotten.

"Next year Mr Dotcom will be in America facing trail and what will be important to New Zealanders will be issues like the economy and jobs,” said Dr Jamie Whyte ACT Leader.

“This why ACT has stayed out of all these so called scandals. 

"I have only talked about our practical solutions to reduce taxes, cut red tape and grow a stronger economy."

Prisoners could earn $90,000: Colin Craig's Incredible Claims Continue

Media Release ACT Party  15 September 2014   Immediate Release

David Seymour:  ACT Candidate for Epsom

Prisoners could earn $90,000: Colin Craig's Incredible Claims Continue

Hot on the heels of a Conservative Party candidate proposing to double the price of a bottle of wine, Colin Craig has come up with an even more fantastic idea to buttress his uncosted tax policy.

He suggests prisoners should work to pay for their prison costs.  Recent figures cite the cost of imprisoning a person at $90,997 (Te Ara

Such an income would put a prisoner in the top ten per cent of earners.  Who knew there was so much untapped productivity in our prisons?

If only Colin Craig had properly costed his tax policy in the first place.  He is now making a mockery of his ‘honest politician’ brand by insulting voters with increasingly thoughtless proposals.

You cannot claim to be a fresh and honest politician when your sums do not add up.

David Seymour:  ACT Candidate for Epsom

Contact    021 678 999

Cost per prisoner:

Income Band:       


ACT Backgrounder: Superannuation

As Leader of the ACT Party, I have on many occasions made it clear that ACT would strongly prefer to see the New Zealand Government led by John Key than by David Cunliffe or any of the other current pretenders to the throne.  And John Key has in turn made it clear that he would again be comfortable working with the ACT Party after the election by urging those who want a National-led Government and who live in Epsom to vote for the ACT candidate, David Seymour.

But I have also been clear that there are many aspects of National’s performance over the last six years which we in ACT find profoundly disappointing.

There has been no serious effort to increase our longer-term growth rate, and as a result wages and salaries continue to lag well behind those in Australia. 

There has been no serious effort to remove the barriers which now restrain the growth of our export industries, with the result that, despite some of the best export prices in a generation, New Zealand continues to spend more overseas each year than we earn overseas. 

There has been no attempt at all to move to a situation where every New Zealander is equal under the law, with the result that more than 130 years after they were due to have expired, we still have Maori electorates and ever more extensive preferences for Maori built into law. 

There have been only tentative measures to reduce criminal offending, so that there are now, for example, some 120,000 burglaries every year according to Treasury. 

And there have been only tentative moves to allow a tiny minority of parents to have choice about how their children are educated.

That’s why ACT is asking for your Party Vote on 20 September.  We know how to increase wages and salaries in New Zealand, by reducing the corporate tax rate and radically reforming or rescinding regulation such as the Resource Management Act and the Employment Contracts Act.

We know how to allow real growth in our export industries, by getting the weight of government off our backs, enabling the Reserve Bank to ease monetary policy without an increase in inflation, thus getting the exchange rate down to a more realistic level.

And we are committed to one country, one law; to putting repeat burglars into gaol for the maximum allowed under current law; and to giving parents choice about where and how their children are educated.

Today I want to talk about one of the areas of policy where National’s performance in government has been most disappointing, namely New Zealand Super.  There are some very good things about New Zealand Super, and the OECD has concluded that it is a major factor in New Zealand’s having a very low rate of poverty among those over 65 – indeed, one of the lowest in the world.

But the reality is that it’s a kind of Ponzi scheme.  The money you pay in in taxation during your working life is not put aside, either in a personal account in your name or even in a pooled government account, to cover the cost of paying you New Zealand Super when you reach 65.  Rather, it is spent on paying a pension to those who have already reached 65. 

This has been viable over the last few decades because we’ve had a large working age population relative to the number of those over 65.  But that is now changing rapidly: the Baby Boomers are reaching 65 in increasingly large numbers.  Whereas in 2010 there were five people of working age for every one person over the age of 65, by 2060 there will be only two people of working age for every one over the age of 65.

What this means is that those who are employed are going to have to pay progressively more and more in taxation to support those in retirement; or government is going to have to spend less on education, health, welfare, defence and so on; or the government is going to have to find ways of cutting back on the cost of New Zealand Super – there aren’t any other options.

Put in the language that economists like to use, New Zealand Super currently absorbs about 4.5% of GDP; this will increase steeply by 42% to 6.4% of GDP in just 16 years and will absorb almost 8% by 2060.  An increase of 3.5% of GDP may not sound like a big increase, but 3.5% of GDP is not much below the total of what government now spends on all primary, secondary and tertiary education.   It’s big number.  And governments will be facing this very large increase in spending at a time when – also as a result of the ageing of the population – they will be facing huge pressure to increase the health budget.

John Key rightly points out that 8% of GDP is a smaller share of GDP than countries like Greece already spend on their taxpayer-funded pension schemes.  But who wants to come close to being in the situation which Greece now finds itself, with unemployment of 27% and the country having to face severe austerity measures imposed by its external creditors!  

Won’t building up funds in the New Zealand Superannuation Fund ease the problem?  Yes and no.  To the extent that government now runs a surplus which it sets aside to meet some of the future costs of New Zealand Super, that will ease the future fiscal pressures to some degree.  But of course there is little or no benefit if the funds going into the New Zealand Super Fund are themselves borrowed, and according to the Treasury’s projections the government is not going to be running a cash surplus for at least the next two or three years.  In other words, the real issue is the willingness of the government to run cash surpluses for years on end; whether those surpluses are used to reduce the now considerable level of government debt or to invest in New York shares, as the New Zealand Super Fund does, is a second order issue.  Political parties campaigning in this election aren’t showing much enthusiasm for running cash surpluses for years on end, and even if they did, the New Zealand Super Fund was never going to provide more than a small part of the future cost of New Zealand Super.

Well, what about KiwiSaver? KiwiSaver is certainly a very attractive scheme for people who are using it – it’s heavily subsidised by the taxpayer and is also highly lucrative for those who manage large KiwiSaver schemes.  But of course it doesn’t ease the future fiscal cost of New Zealand Super unless a future government decides to means test access to New Zealand Super.  There may or may not be good reason to means test New Zealand Super, but the parties which are pushing KiwiSaver don’t even hint that that might be part of their plan.  Perhaps a journalist should ask other parties whether they do plan to means test New Zealand Super, and if not, why are they are using taxpayers’ money to subsidise KiwiSaver so generously.

At this stage, there is little or no evidence that KiwiSaver is increasing aggregate New Zealand savings – most of the private sector savings going into KiwiSaver is being diverted from other forms of saving by the lure of the subsidies, and to the extent that private sector savings is increasing, it is being largely or fully offset by the increased government borrowing to fund the subsidies.

Then why not make KiwiSaver compulsory, as Labour is proposing?  Making contributions to KiwiSaver compulsory is a seriously bad idea.  People normally do not want to save the same proportion of their income at every stage of their life: when they are at an early stage of their career, possibly with the cost of raising young children and paying off a mortgage, they are less able to put money aside into a pension scheme, and forcing them to do so either puts them under enormous financial pressure or prompts them to undertake more borrowing.  (I have not yet met a fund manager anywhere who can consistently offer a rate of return on KiwiSaver which compares favourably with the rate of return achieved by paying off a mortgage.) 

Moreover, having a compulsory savings scheme doesn’t seem to solve any problem.  Australia has had a compulsory savings scheme for two decades and now has one of the highest rates of poverty for those aged over 65 among OECD countries – much higher than in New Zealand – and many observers doubt that the Australian scheme has done anything to raise Australia’s saving rate.[1]   And of course even having a compulsory KiwiSaver scheme doesn’t ease the problem of the future cost of New Zealand Super unless access to New Zealand Super is means tested.

So ACT does not favour compulsory KiwiSaver, and is opposed to the subsidies now going to KiwiSaver.  We are opposed to the New Zealand Superannuation Fund as it brings no benefit and reduces the ability of taxpayers to contribute to their own retirement fund.

The best way to constrain the future growth in the cost of New Zealand Super is to gradually increase the age at which people become eligible to receive it, and to index the level of the benefit to preserve its real value rather than to have it rising relentlessly with the rise in wages.  When the Old Age Pension was first introduced in 1898 the average life expectancy of a person at birth in New Zealand was a very long way below the present level.  Few people reached the age of eligibility at that time – as now, 65 – and the pension at that time was a very low amount (equivalent to about $3,200 per annum in today’s dollars), was strictly means tested on both income and assets, was available only to those of good moral character who had lived in New Zealand for 25 years, and was to our shame denied to Chinese residents.  As a result, only a small minority of adults received the pension at that time. 

In 1950, the average life expectancy of a person aged 65 in New Zealand was a further 12.9 years; by 2004, somebody aged 65 could expect to live another 20 years; and in 2014, that  expectation of further life at the age of 65 is even longer.  Life expectancy at age 65 continues to increase and can reasonably be expected to continue doing so.

It would be outrageous to change the parameters of New Zealand Super for those who have already reached 65, or indeed for people within a few years of that age.  They have planned their financial affairs on the assumption that New Zealand Super would be there for them.  But ACT favours a very gradual increase in the age of eligibility to 67, starting in 2017.  Many other countries are already increasing the age at which their citizens become eligible for a taxpayer-funded pension, with Australia proposing to move to 70 and other countries proposing 67 or 68, but thereafter indexing the age to average life expectancy, so that as average life expectancy continues to increase the age of eligibility would also gradually increase further.

If New Zealand Super’s real (inflation-adjusted) value was maintained thereafter, rather than increased with wages year after year, the fiscal cost of the scheme would over time become a much more realistic burden on future taxpayers.

Some people, no doubt cheered on my Winston Populist, will argue that they have “earned” New Zealand Super in its present form.  Actually, they haven’t.  The taxes paid by the average taxpayer have covered part of the cost of that taxpayer’s education and healthcare, and the cost of New Zealand Super for the past crop of superannuitants, few of whom will live as long as those retiring over the next two decades.  The reality is that those retiring over the next two decades would on average be deriving benefits from taxpayers far exceeding what they themselves have paid in tax to support previous superannuitants if there were to be no change in the parameters of New Zealand Super.

So ACT favours a very gradual increase in the age of eligibility for New Zealand Super to 67, and indexing the amount of that benefit to the CPI so that its real value is maintained.  This will cause hardship for people of low life expectancy and who do hard manual labour. For these people we propose introducing a means tested pension at the same rate as universal super for people aged 65 and over. We want New Zealanders to talk about the merits of providing pensions in a means tested basis and with the introduction of this new pension for people aged over 65 but under the rising age of entitlement to universal super ACT believes it will demonstrate the advantage of providing welfare assistance to people on the basis of need, not age.

We do not favour government subsidies for KiwiSaver – and certainly do not favour its being made compulsory.  We are very much opposed to the current Government’s policy of sticking our head in the sand and pretending that there is no problem. There is no problem for this government or even the next, but the problems facing future governments and the people of New Zealand will be sheeted home to the Government we have now which is constrained by a rash promise that is not in the interest of New Zealand for it to keep. The people of New Zealand want New Zealand Super to remain universal and for the sake of its long-term sustainability the Government needs to act responsibly and raise the entitlement age.

[1] A recent study of the effect of the Australian compulsory superannuation scheme on Australian saving, undertaken by the global accounting body CPA Australia and reported in the New Zealand Herald on 18 July 2013, found that there has been an alarming “tendency by those approaching retirement age – especially over the last decade – to incur greater debt, to spend more, and to view their superannuation lump sum payments as windfalls to be used to extinguish debt or to fund greater consumption.”  Indeed, the study concluded that “nothing has been saved during the 20 years of compulsory superannuation contributions.”


Why you must tick ACT twice!

Reproduced with permission from National Business Review.

Authorised by Garry Mallett, 809 River Road, Hamilton.

The National Business Review2.74 MB

The efforts of New Zealand small businesses are being destroyed by the Law of Unintended Consequences Act (1925)

“I keep seeing reports that many small business people, the backbone of the country’s economy, are being put at risk of failure by well intended legislation that is having the effect of putting their businesses at peril,” said Dr Jamie Whyte, Leader of the ACT Party.

"For instance it is reported in the press that the owner of a guided fishing business in the Coromandel will no longer take tourists out on the water because of the high cost of new safety audits.

"Industry insiders report that the changes will put the highly experienced small operators out of business and could leave the tourists at more risk than before.

"It appears the Government's labour service thinks regulations should not cover equipment hireage or non-guided services, because customers do not have the same level of expectation over their care as they would when being guided by professionals. The seasoned operators are concerned that experience and common sense is being lost in favour of report writing.

"What are the tourists' expectations? Can that be part of regulations? Why should tourists be put at risk of drowning because of this senseless “expectations” approach to regulating the industry?

"Another experienced operator reports “This whole process seems to me like it is going to promote unsafe practices instead of getting rid of them.”

“Red tape and regulations that have the opposite effect of what was intended by the changes should never be allowed to trump common sense and the hard won experience of the experts in the field,” said Dr Whyte.


ACT’s five point plan to grow the economy

Tauranga, 15 September 2014
Extract from speech

ACT has a five point plan to double the rate of economic growth. The Treasury long term forecast for growth is 2% a year. We can lift it to 4%.

Two percentage points may not seem like much. But it is. Over just 15 years, it will make the difference between the economy growing by 35% and growing by 80%. That is a huge difference.

ACT’s plan is based on sound economics. It will deliver more than any plan of any other party.

While National can take credit for getting us through the Global Financial Crisis, the pre-election forecast shows the economy is slowing.

Labour has no answer. They simply want to return to the old Muldoonist policy of picking winners – giving taxpayers’ money to industries that David Parker thinks are the future.

So do the Greens. Although, of course, they disagree with Labour about which industries are the future. Which goes to show what’s wrong with the policy of picking winners.

Who is likely to make better investment decisions: private investors risking their own money in search of profits or politicians risking taxpayers’ money in search of votes?

ACT is the only party that understands that wealth is created by the enterprise of the population, not the self-supposed genius of politicians. We are the only party that understand that our economic progress requires less political interference, not more.

Our carefully costed five point plan for economic growth will set enterprising New Zealanders free to get on with their business. 

1.  Cut the company tax rate from 28% to 12.5%

Economic research shows that high company taxes raise little revenue but inhibit investment, growth, job creation and real wages. New Zealand now has one of the highest real company tax rates in the OECD. Cutting the company tax rate will grow the economy. It can be funded mainly by eliminating “corporate welfare”, the corrupt practice of giving taxpayers’ money to who can win favour from politicians and bureaucrats.

Economists reckon that cutting the company tax rate by this much would, on its own, increase the long term economic growth rate by at least one percentage point.

2. Cut the top rates of incomes tax from 33% and 30% to 24%

In our Alternative Budget published in May, we showed how cutting middle-class welfare would allow us to reduce the top rates of tax significantly. By middle-class welfare we mean the transfer of taxpayers’ money to people who are not hard up. The most obvious examples are interest free student loans and Working for Families for people on incomes above the 30% income tax threshold of $48,000.

High marginal tax rates are a serious deterrent to work, risk-taking and investment in education. Lowering them will not only encourage enterprise. It will encourage enterprising foreigners to come here and enterprising Kiwis to stay here.  

3.  Cut red tape

Before New Zealand had the Resource Management Act, housing was affordable.  The RMA has allowed Councils to drive up the cost of land and development.

The RMA has had a similar effect on business.  The cost of a new business proposal has risen enormously.  Many entrepreneurs faced with significant RMA costs and delays simply give up.

Reforming the RMA will not only make housing affordable again, it will make many business proposals viable.

But the RMA is only part of the problem.

National has generated more red tape than Labour.  Having a “one size fits all” new earthquake code will put billions of dollars of costs on home owners and businesses.

Last Saturday’s newspaper reported that the developer of an adventure boating experience says the new safety code is so over the top he will go out of business. Bob Jones wrote last week about spending $4,500 on a resource consent to alter a building’s window.

ACT has proposed that a cost-benefit test be applied to all government regulations.  This will remove billions of dollars of cost and waste.

4.  Welfare Reform

Welfare reform is an important part of ACT’s economic plan. New Zealand has 200,000 able bodied adults on welfare. 

Moving adults from benefits to work does not merely reduce government spending and increase taxes. It increases the incomes of those who move into work. It is the best way to lift the incomes of New Zealand’s poorest households.

We applaud the measures taken by National. But more can be done to incentivise the able-bodied to move from welfare to work.

In the 1990s, President Clinton introduced time limits on the receipt of federal welfare assistance to families. No one could receive federally financed welfare assistance for the equivalent of the sole parent benefit for more than 5 years over their lifetime.

These time limits on reduced single parent welfare cut caseloads by two thirds over all, and by 90% in some states.

The subsequent declines in welfare participation rates and gains in employment were largest among the single mothers previously thought to be most disadvantaged: the young (aged 18-29), mothers with children aged under seven, high school drop-outs, and black and Hispanic mothers. These low-skilled single mothers were thought to face the greatest barriers to employment.

Employment of never-married mothers increased by 50%; employment of single mothers with education less than a high school graduation increased by two thirds; child poverty fell dramatically.

Rebecca Blank is the leading economist working in the field of welfare reform, and she has been the Acting Secretary of the Department of Commerce in the Obama administration. In 2002 she said that “nobody of any political persuasion predicted or would have believed possible the magnitude of change that occurred in the behaviour of low-income single-parent families”. 

ACT believes that we should follow the Americans and introduce time limits here. It will help tens of thousands of unemployed people back into work. Nothing will do more to reduce youth unemployment.

5. Increase the number of Partnership Schools

20% of pupils leave school with so little learning they are unemployable. They can barely read or do arithmetic.

ACT has shown Partnership Schools (or charter schools as they are called overseas) work for disadvantaged pupils. We would allow all state school boards to choose to opt out of Ministry of Education control and become Partnership Schools.

The improved education of the pupils attending them will bring huge benefits not just to the pupils but the whole economy.


*  *  *  *  *

ACT has set out its fresh new policy ideas and the research to support them.

No other party has any practical policies to grow the economy.

Why not vote for the party with solutions?

On Saturday, Party vote ACT.

ACT is Holding the Balance of Power

Dr Jamie Whyte, ACT Leader
11am Sunday 14 September
Tasca Café, Newmarket, Auckland

ACT will hold the balance of power after the election on Saturday.

In every poll taken last week, ACT has gone up. Not in every poll published last week mind you but in every poll that was taken last week.

In the latest Colmar Brunton poll – the most reliable of the pollsters – ACT is on 1.2%.

Our messages are getting through. We are winning support. 1.2% (28,000 votes) means I will be elected as a list MP, giving ACT two MPs and allowing John Key to be Prime Minister again without the “help” of Winston Peters.

In a week’s time ACT will be in a position to give the country three more years of stable Centre/right government.

The MMP system and its ramifications remain unclear to many voters. It is worth going through them yet again.

To elect Party List MPs, a party must receive 5% of the Party vote or hold an electorate. 5% is a high threshold. No Conservative-type party has managed it in 18 years of MMP. The Christian Democrats were well funded and they failed. The Conservatives, with their confused and uncosted policies, will also fall short in this election.

The parties that will break the threshold are National, Labour, the Greens and, probably, New Zealand First.

The only other parties that will be in parliament are parties that can win electorates: the Maori Party, United Future’s Peter Dunne, Internet-Mana and ACT.

Of these, only two parties have enough electoral appeal to elect Party List MPs: Internet-Mana and ACT.

Hone Harawira now regrets his deal with Dotcom and is struggling to hold his seat from Labour’s Kelvin Davis. And Internet-Mana is falling in the polls. If Hone loses they will sink without trace.

It is a huge electoral advantage to hold an electorate.

The people of Epsom are doing their bit. Left wing commentators and desperate talk-back callers claiming to be Epsom voters say the electorate does not like being in a position to choose the next government.

I have been campaigning in Epsom. I am yet to meet an Epsom voter who objects to the role. 

This week National released their Epsom poll. It puts ACT’s David Seymour over 50%.

ACT’s winning Epsom is important not just because it means all ACT Party votes then count but because it increases centre-right representation in parliament – a fact that even political science professors fail to recognise.

MMP stands for Mixed Member Proportional. “Mixed Member” refers to the fact that there are electorate and list MPs. “Proportional” refers to the fact that the number of MPs a party has is roughly proportional to their Party vote.

Electorate seats that a party wins are deducted from the seats it wins on the list to make the total representation in parliament proportional. So if National had won Epsom last election, the party would have lost its last list MP and the total number of centre-right MPs would have been the same.

ACT winning Epsom meant an increase of one seat for the centre-right and turned out to be the vote John Key needed to be Prime Minister.

The other effect of the electorate seats being deducted is that, at the last election, National needed 63,000 party votes per list MP. At this election, about 28,000 party votes (or 1.2%) will bring me in as a list MP and 44,000 will bring in me and Kenneth Wang – at an average of 22,000 party votes per list MP.

We are currently polling 1.2% – enough for David Seymour plus me. But I think things are actually better than that.

ACT has always been under-recorded in the polls. The famous Republican pollster, Gen Ulm, tells us that telephone polls no longer work for a party like ACT. Our supporters have smart phones and polls based on landlines are over recording parties like New Zealand First.

ACT may already be on 3 or 4 MPs.

*  *  *  *  *

ACT has never failed to elect an MP in the history of MMP.

That is because of our real electoral advantage. 

Many New Zealanders want to be free to make the decisions about their lives and they are willing to accept the consequences of those decisions. 

Anyone who wants lower taxes and less nanny state has only two options on election day. They can either stay at home or they can vote for ACT.

We may be a minority, but those who favour personal freedom do so passionately.

I support free market capitalism because it has produced remarkable wealth for humans. Over the last 200 years, free markets have lifted humans out of the grinding poverty that was taken for granted for all previous human history.

Despite what the parties of the left say – and especially grumpy old Winston – there has never been a better time to be a New Zealander.

But even if socialism did work, even if David Parker and Russel Norman really could run a planned economy, I would still reject it in favour of freedom of choice and taking responsibility for my choices.

I know that at least 10% of New Zealand shares my values. They and I know that ACT is the only party of freedom.

I have demonstrated in this campaign and in the debates that I am a person who genuinely believes in personal responsibility. I can be trusted to go to parliament and be true to the values of freedom and responsibility.

We have selected a new team who can also be trusted to reflect our values. David Seymour is leading in Epsom not simply because he has door knocked on thousands of doors. He is leading because when the Epsom voters met him they like what they see. Kenneth Wang came to this country with nothing and has founded and run his own successful company.

ACT’s support will continue to climb this week.

Victoria University has run an interesting study about how voters decide who to vote for and when they decide. ACT voters are late deciders. ACT people are busy. Many of our voters will make up their minds over the coming week.

And they will do that in part by visiting our website. Victoria University says potential ACT voters are the most likely to check out all the party websites.

Here is what they will find. National has the slickest site but it focuses on John Key. It is the John Key party. If you have the most popular politician, why not?

It does not take long on the Labour website to realise this is a party that has lost its way. On the Greens’ site you rapidly discover that this is a party of watermelons: green on the outside and red in the middle.

But the websites get worse after that. New Zealand First is a leadership cult. The Taxpayers' Union says New Zealand First promises are more than Labour and the Greens combined, but none of it is properly explained or costed. There are no serious policy papers on the New Zealand First site.

The Conservative website is even more superficial. It is a hodgepodge of inconsistent policies stolen from different parties. No attempt is made to cost their promises. Even their core policy of binding referendums seems to be slipping into something not quite binding.

Potential ACT voters will not bother with the other sites so neither will I.

ACT does not have the flashiest website but we do have the most substantive – fully-costed policies with carefully researched background papers that cite our sources.

The Taxpayers’ Union’s independent economist says that ACT has costed its policies and that ACT alone is not trying to bribe voters with their own money.

Spend time on the ACT website and you will find ACT is the only party with a plan that distinguished economists agree will return New Zealand to full employment.

The other parties talk about poverty. On our website, we have a practical five point plan to reduce poverty: economic growth from tax reform, reduced housing costs from regulatory reform, improved incentives to work from welfare reform, better education through Partnership schools and less addiction by supporting National’s policy of making treatment a condition for welfare.

20% of New Zealand children leave school unable to read or do arithmetic well enough to be employable. Only ACT has a plan to give our youth an education suitable for the world of robots and global competition.

Spend time on ACT’s website and you discover that ACT has practical policies to combat crime. We have credibility here because our three strikes policy has already reduced violent crime. Three strikes for burglary will reduce our appalling burglary statistics. 

Getting tough on home invasion will tackle what is one of the worst crimes. And we are is going allow shop keepers to defend themselves from violent criminals.

I challenge every voter to take the tour of the websites. ACT is the party of fresh ideas and practical solutions.

*  *  *  *  *

I also ask voters to look at the leadership I offer and compare it with what is on offer.

Before entering politics I wrote two books about the shoddy arguments that politicians commonly use. So I entered with low expectations about what I would encounter.

But I am afraid my expectations have turned out to be not quite low enough.

The most astonishing thing has been the willingness of my rivals to simply make things up.

Winston Peters, for example, claims that he can come up with $7 billion in annual revenue to fund his wild promises by cracking down on tax evasion.

Some journalists have asked how he knows there is this much tax evasion and how he can possibly stop it. He simply replies that he knows what he is talking about because he was involved in exposing a famous tax evasion scam many years ago.

It’s like arguing that you can bench-press 200 kilos because you once picked up a kitten.

Even worse: if he knows of this $7 billion of tax evasion, why has he not already informed the IRD? What’s he waiting for? The baubles of office?

Colin Craig, the man who would be Winston, seems to be learning from the master.

His tax policy has become a farcical farrago of invention.

Initially, Mr Craig claimed that he would create a $20,000 tax-free threshold and impose a flat rate above $20,000. This flat rate remained a mystery both to the voters and, apparently, to Mr Craig.

Mr Craig had announced no cuts in government spending. So the tax rate imposed above $20,000 would have to suffice to maintain the current total revenue from income tax.

We calculated that this meant the rate would need to be 34%. That’s higher than the current 33% top rate but would kick in at just $20,000. Imposing a 34% marginal tax rate on people earning just $20,000 is economically crazy.

No no no, said Christine Rankin at a candidates meeting in Epsom. The rate would be between 20% and 25% with the shortfall made up by a $4 billion new excise duty on alcohol.

Excise duty on alcohol – at for example $2 a bottle of wine – now raises about $670 million. The Conservatives plan to increase this to $4 billion or, in other words, by a factor of 7. The duty on a bottle of wine would rise from $2 to $14. A bottle of wine that now costs $18 would cost $30!

We pointed this out.

Then Mr Craig announced that he would only phase in his $20,000 tax-free threshold, starting with $5,000.

Well, even this will entail a revenue loss of $1.6 billion. What spending will be cut?

Answer: he will cut some unspecified wellington bureaucrats and reduce the number of MPs.

Suppose that the total cost of an MP is $1 million annually, including office staff and all the attendant costs. If parliament were reduced from 120 MPs to 100, that would save $20 million, which is 1% of the $1.6 billion required. The remaining 99% of savings required are, of course, left unspecified.

He is just making it all up as he goes along, coming up with a new mistake as soon as the previous one is exposed.

The unabashed left, on the other hand, have succumbed to self-aggrandising fantasy.

Their every policy involves a transfer of decision-making from private citizens to politicians and bureaucrats.

How will Labour increase economic growth? By shifting responsibility for making investment decisions from private investors risking their own money to David Parker risking taxpayers’ money.

What extraordinary economic insight Mr Parker must be possessed of! With no skin in the game and only a fraction of the information available to private investors, he can make better decisions than they can.

How will Labour, the Greens and Internet-Mana increase the incomes of those on low pay?

They will simply force employers to pay their staff more. Never mind all the complexities of the labour market, the ever-shifting demand for various kinds of labour and the supply of them. Never mind the great variation in living costs around the country. Never mind the effects of high minimum wages on employers’ plans to hire new staff or on the non-monetary conditions they offer their employees.

Meteria Turei, Hone Harawira and David Parker can do a better job of setting pay than can millions of voluntary contracts between employers and employees.

What god-like insight these people must believe themselves to possess.

*  *  *  *  *

When I make such points, my rivals and some commentators dismiss me as a philosopher.

They hope to make a political virtue of their inability or refusal to reason properly.

It isn’t a virtue.

This country faces problems that call for some straight thinking.

We need some MPs in parliament who are willing and able to think.

And many voters know it.

That’s why ACT is going to do well on Saturday. 

That’s why we will be holding the balance of power in the next parliament.

Meet the Real Colin Craig: Dishonest Vanity Politician

Watching Conservative Party leader Colin Craig struggling to explain his tax policy on The Nation this morning finally revealed that he is making dishonest promises.

Craig claimed that a $20,000 tax free threshold would reduce government revenues by $4 billion. 

Confronted with two expert opinions that the cost would be $7 billion he admitted that his policies are ‘uncosted.’

He believes that such savings can be made by reducing the number of MPs to 99.

Even if every MP, their offices, and their two-to-four staff and travel added up to one million dollars each, that would only save $21 million per year, only $6.979 billion to go.

Craig seems to believe that policies such as tax are merely a prop to his self-funded bid for political power.

Craig is either making it up or mucking it up.

His dishonest policies are a betrayal of those who support him. 

He should properly cost his tax policy or abandon it.

ACT Candidate for Epsom:   David Seymour.

Contact:   021 678 999