New Zealand is in competition with the world and particularly Australia for investment, jobs, and workers. Whether we win this competition, or at least hold our own, is one of the most important questions facing our future. Australians earn some 40 per cent more than New Zealanders and pay lower taxes on average. In the ten years to 2010 we lost 260,000 people to Australia, even allowing for those who came back. The New Zealand Institute of Economic Research predicts that, if we don’t change course, we will lose a further 412,000 people by 2025.
All of this creates a downward spiral effect. As we lose citizens overseas, they take their skills and education with them. If we are to maintain first world services, then those who remain must be taxed harder still. In turn, the incentive to leave grows stronger. New Zealand must take decisive action to stem this tide, or gradually become a backwater over the coming generation.
Governments cannot create economic growth. What they can do is create the right conditions for people to grow the economy. ACT believes that lower taxes and lighter regulations make the country more attractive to workers and investors alike.
In the last parliamentary term, with ACT’s pressure and support, the Government:
• Established the 2025 Taskforce, which provided practical suggestions for improving New Zealand’s economic performance;
• Established the Productivity Commission. It recommends ways to remove barriers to investment and entrepreneurship so that New Zealand workers can produce more wealth per hour worked;
• Reviewed the Resource Management Act, aimed at streamlining resource consents;
• Extended the 90-day trial period from firms with fewer than 20 workers to all firms;
• Agreed to open up ACC to competition;
• Repealed 31 redundant acts of parliament and 206 unnecessary regulations.
ACT will keep working for a stronger economy. A Party Vote for ACT is a vote to:
• Push the next government to reduce wasteful spending. In 2005, Labour was spending 29 per cent of the national income. Today, the same figure is 35 per cent. ACT would push the next government to return spending to the level it was at in 2005 by repealing the “election bribe” spending of the past two elections with a view toward getting the top personal tax rate down to 25% and the company tax rate to 12.5%;
• Push the next government to lock in lower taxes by passing ACT’s Spending Cap Bill into law. The Bill would require government spending to increase only by the level of inflation and population growth. By reducing government spending and taxes, it would increase the rewards for wealth creation;
• Push the next government to pass ACT’s Regulatory Standards Bill. The Bill would test all new regulations for unnecessary red tape, making it easier to do business;
• Sell state assets such as power generation companies; the overwhelming evidence is that such valuable assets produce more wealth when managed privately;
• Allow more mining when the economic benefits outweigh the environmental costs.