“National is parading its indexation of welfare payments while refusing to do the same with tax brackets,” says ACT Leader David Seymour.
“Benefits were adjusted for inflation today. What about the workers? Tax brackets should be adjusted too.
“This fiscal year, a person on the average income will pay another $378 in tax as inflation pushes them into higher brackets, even if they have no increase in real spending power. They have already paid an extra $649 since 2010.
“The average household has already paid an extra $1036 since 2010, and will pay $431 more this year.
Taxpayers are today being asked to fund:
· Government grants for first home buyers of up to $20,000;
· A two-week extension to paid parental leave;
· NZ Superannuation increases, heralded as growing at twice the rate of inflation since 2008.
“If the government wants to fund this by increasing taxes, it should do so openly and honestly, not through stealth taxation."
Delivered by ACT Leader David Seymour. March 19, 2015
Video is available here.
DAVID SEYMOUR (Leader—ACT) to the Minister of Finance: In light of his statement in the House on 11 March that low inflation “makes it more challenging for the Government because higher inflation pushes up the tax base and enables us to collect more tax in a growing economy”, does he agree that this phenomenon of fiscal drag is just another description for an increase in effective tax rates?
Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of the Minister of Finance: As the Minister said at the time, New Zealand is in the unusual situation of having solid economic growth but also historically low levels of inflation. This is, of course, good for households because it means their cost of living is increasing at a very low rate, but it is a challenge for Government revenue.
Hon David Parker: This is just a speech, which doesn’t address the question.
Hon STEVEN JOYCE: Just take your time, Mr Parker.
Hon David Parker: Unless the country goes bankrupt.
Hon STEVEN JOYCE: Shh, take a breath, David. Low inflation—
Mr SPEAKER: Order! Listen. The constant barrage coming from my left is not acceptable—
Hon David Parker: Point of order—
Mr SPEAKER: Order! I am on my feet. If the member wants to take the opportunity to ask a supplementary question, he will have his chance. But to engage with the Minister while he is attempting to answer the question is distracting, certainly to me and to the House, and in itself it is disorderly.
Hon David Parker: I raise a point of order, Mr Speaker. I would ask you to enforce the Standing Orders and to expect Ministers to address questions, rather than—
Mr SPEAKER: Order! The member will resume his seat. He will be having a very early departure from the House if he carries on like that. The answer was being given. It was being interjected on from the member, so that was—[Interruption] Order! If there is one more outburst from the Hon David Parker, he will be leaving the Chamber this question time. If there is constant interjection coming from the left of the House and the Minister is responding to that, that is not helpful, but the initial cause of the problem is the interjections from the Hon David Parker. Steven Joyce, if he could complete his answer.
Hon STEVEN JOYCE: Thank you, Mr Speaker. As I was saying, low inflation reduces Government revenue in part because of less fiscal drag, as the member knows. In times of high inflation—for example, as recently as 2008—fiscal drag was very significantly important and was an effective tax increase. In times of very low inflation, as we are experiencing at the moment, there is, in fact, a lack of fiscal drag that is noted. Despite pressures on its revenues, this Government’s management of expenditure remains disciplined, and we are on track to surplus.
David Seymour: Is a time of low inflation when fiscal drag provides little additional revenue, as the Minister has noted, not the perfect time to introduce greater transparency into the nation’s tax system by indexing tax thresholds for income to inflation?
Hon STEVEN JOYCE: In regard to income tax and indexation reducing tax rates, we have been very clear that that was something we would consider from 1 April 2017 if economic and fiscal conditions allowed. Any tax reduction would be modest and focused on *low and middle income earners. We do have the concern that the member outlines, which is if wages are rising, people can be taxed more. So we are interested in doing that. Would we do it in terms of an indexation? That is something that we would address at the time, once we were confident we had the room to do so.
David Seymour: Given the Minister’s ambivalence about indexation, is he aware that since 2010 the lack of indexation of income tax thresholds to inflation has cost the average earning household $1,036?
Hon STEVEN JOYCE: I do not have those exact figures to hand but, of course, there are a number of other considerations in terms of household incomes. For example, we have had very significant ACC reductions over the period. The income tax reductions in 2010 reduced income tax revenue by around $600 million over 3 years, and that broadly offset the estimated fiscal drag effects. On top of that, of course, households benefit because inflation is lower and that, of course, means that their costs of living increases are lower, which means that most households will be better off under the fiscal arrangements that this Government is progressing than we have seen from previous Governments.
David Seymour: I seek leave to table a document prepared by the Parliamentary Library for the ACT Party, detailing the cost to households from the lack of—
Mr SPEAKER: It has been described. I will put the leave. Leave is sought to table that information. Is there any objection? There is none. It can be tabled.
ACT Leader David Seymour has today called for an end to the stealth increase of tax rates through bracket creep.
“Each year, inflation pushes a larger proportion of New Zealanders’ incomes into higher tax brackets, regardless of whether they’ve had an increase in real earnings,” said Mr Seymour.
“Tax brackets should be adjusted for inflation.
“Even with low inflation this stealth tax of ‘bracket creep’ means that the average household is $1036 worse off since the tax changes of October 2010. An individual taxpayer on the average income is $648 worse off.
Mr Seymour’s focus on bracket creep comes after the Minister of Finance stated low inflation ‘makes it more challenging for the Government because higher inflation pushes up the tax base and enables us to collect more tax in a growing economy’.
“If the government wants to increase taxes, it should do so openly. This is a basic principle of transparency, and honesty in taxation.
“I propose tying tax brackets to the Consumer Price Index, meaning tax brackets would rise with inflation, stopping stealth tax increases and ensuring government revenue collection is open and transparent.
“The best time to act is now – current low inflation means a switch to inflation adjusted tax brackets would have relatively little effect on government forecasts.”
In three days’ time I will be elected along with a number of ACT MPs. I think the media will be surprised and ask how it happened?
Let me tell you.
First, ACT has been rising in all the polls. On the latest Colmar Brunton poll, David Seymour wins Epsom and I am elected.
Second, once a party wins an electorate, the number of votes needed to win a Party seat is very low. Each National list MP will take about 60,000 votes, more than the total votes of any one electorate. By contrast, just 28,000 votes will add me to David Seymour. And 44,000 Party votes will give ACT three MPs.
The electorates won by a party are deducted from its list MPs. That is why Labour may get no list MPs.
The ideal way to game MMP is to have a party that wins only electorates and a partner that wins only list seats. Labour and the Greens are now in that situation and may as a result steal the election from National, who would be recording the biggest win in our history if this were a first-past-the-post election.
I predict that ACT will win a number of seats and that ACT will hold the balance of power on Sunday.
ACT’s Deputy Kenneth Wang is the most popular Chinese politician in New Zealand and on some Chinese website polls ACT is in second place ahead of Labour.
We have used the internet to poll and so we know that the land line polls are wrong. As all the land line polls are different, and the differences are greater than the margins of error, even the journalists who report as news what their pollster predicts must know that the land line polls are not credible.
ACT’s polling shows that 11% of New Zealanders support ACT’s message of low tax, less regulation and more personal responsibility.
We have been told by usually reliable sources that TVNZ’s Vote Compass survey also reveals significant support for ACT’s policies. In a campaign that has been dominated by side issues rather than genuine policy debate, this is a more interesting poll finding than the supposed voting intentions conjured up by landline phone polls.
I have today delivered a request under the Official Information ACT to TVNZ to reveal the Compass Vote survey results that will show that many New Zealanders agree with ACT’s ideas.
We have written to TVNZ demanding that they publish the Vote Compass results before the election. As the survey was paid for in part by the Electoral Commission using Taxpayers money I have also forwarded this demand to the Electoral Commission. Voters need to know this information now before the election.
At the last election up to 100,000 right wing voters stayed at home. They were voters who thought John Key was going to win easily and think National is too much like Labour.
To be frank, they are the voters who under MMP had previously elected an average of seven ACT MPs, and they thought ACT had lost its way.
I think I have shown this election that ACT has a fresh team, that we have gone back to our core policies of lower tax and less regulation and that we are worthy of our supporters’ vote.
The numbers coming to our website show there is interest in our alternative to the tax-and-spend approach of all the other parties.
We believe we will do well because we have addressed the issues that matter.
We see commentators express surprise that John Key and National’s popularity have been unaffected by a determined effort to destroy our Prime Minister.
This just shows that voters are smarter than the media gives them credit for.
Voters know that in 12 months’ time the issues that matter will be jobs, the economy, the cost of a house and whether we feel safe.
Mr Dotcom will have left our shores for America and nobody will even remember what “Dirty Politics” was all about. As Helen Clark might put it, we will have moved on.
What the voters will remember is that the election campaign didn’t quite happen. The serious disagreements between the rival parties went unexamined.
What will improve education: more parental choice or more bureaucratic control?
Who is better at making investment decisions: private investors risking their own money or politicians risking taxpayers’ money?
How will we reduce the number of children born into disadvantage – by transferring parental responsibility to bureaucrats and taxpayers or by increasing incentives to work and opportunities to work?
What will do more to reduce the cost of housing: imposing a capital gains tax on those who build and then sell houses or freeing up the supply of land for residential development?
These and many other important matters have gone unexamined because, with some honorable exceptions, the media seem to believe that politics should be reported as if it were a game of snakes and ladders.
The parties’ policies, what they will do if elected, have been squeezed out by the kind of thing Winston Peters specialises in: feigned outrage at the wickedness of politicians and speculations about who will form coalitions with whom.
Yesterday Radio New Zealand hosted the final debate between the leaders of the minor parties. We discussed only two topics. Kim Dotcom’s “Moment of Truth” event and post-election coalition deals. And Radio New Zealand is supposed to be the most serious and thoughtful broadcaster in the country!
* * * * *
Some parties have not announced policies that are sufficiently well worked out to warrant serious discussion – most notably, New Zealand First, the Conservatives and Internet-Mana. They merely wave their hands in the general direction of a vague idea, and call it a policy.
By contrast, ACT has announced a number of serious policies, fully costed and backed up by academic research.
We started our campaign three months ago by publishing a fully-costed budget.
No commentator or rival party has disputed ACT’s figures.
In that budget, we showed how by cutting corporate welfare – the corrupt practice of giving taxpayers’ money to companies that can win favour with politicians and bureaucrats – we could cut the company tax rate from 28% to 20 percent next year. In a subsequent policy document, we showed how we could cut the company tax rate to 12.5% by 2020.
New Zealand now has one of the highest company rates in the world. Most New Zealanders do not realise how far New Zealand’s company tax rates are out of line because of two factors. Australia’s company tax rates are also high and the USA’s tax rates are the highest in the OECD.
Americans know their tax regime is dysfunctional. Even President Obama wants to cut their company tax rate and get rid of all the loopholes (which, by the way, mean that American companies end up paying a lower rate of tax than New Zealand companies pay).
The Australians also knows their company tax rate is too high. The new Liberal government has announced that it is reviewing the Australian company tax rate company.
If Australia reduces its company tax rate New Zealand will find itself at a serious disadvantage.
In parliament, ACT MPs will be pointing out our company tax rates are unsustainable.
People will ask, “Why was this not an issue in the election?” Well, it was, but the media thought other things were more important. We have explained why cutting the company tax rate from 28% to 12.5% will increase investment, economic growth and wages.
Other parties also seek to increase economic growth and wages. But they are all convinced that the answer is more of them and less of you.
They all say that they can pull off some form of Muldoonism. They can pick winners and replace private investment with politically directed investment. They all claim that investment decisions are made better by politicians risking taxpayers’ money than by private investors risking their own money.
This absurd idea has attracted a fraction of the analysis given to the private emails of a blogger who is not a candidate for any party.
Other parties’ solution to low real wages is to have the government make low wages illegal. But wages do not depend on the will of legislators. They depend on the productivity of workers – which depend on their education, the amount of capital they work with and their degree to which they can specialise.
Legislating higher wages in the absence of improvements in these factors will simply cause unemployment. In the presence of such improvements, on the other hand, wages will increase without any need for legislation.
You cannot make people rich by decree. If you could, we would all be billionaires. The only route to wealth is productivity.
Legislate any minimum wage you like. It won’t increase productivity. And it won’t, therefore, help us close the wage gap with Australia.
ACT predicts that in 12 months’ time, when the Australian economy has recovered, the gap between New Zealand and Australia will be an issue again and the planes will again be carrying our best and brightest across the Tasman, and to the US and the United Kingdom too (if the United Kingdom still exists).
ACT MPs in parliament will be asking the government: “What is the plan to close the gap with Australia?” and the public will be asking why was that not an issue at this election?
Well, if you examine ACT’s press statements, it is an issue.
We have put forward a five point plan to catch Australia.
ACT has identified a major reason for housing unaffordability, which is also a significant reason for the country’s slow growth – red tape and, in particular, the Resource Management Act.
The RMA has proved to be a license for local government planners to undermine private property rights in favour of kind of soft socialism. The costs in administration, compliance, delays and uncertainty are huge.
In 1990 the average New Zealand family could afford a house.
ACT predicts in 12 months’ time housing will still be unaffordable because the RMA is fundamentally flawed. ACT’s policy is to admit the RMA experiment has failed, repeal the law and start again.
In parliament we will be telling National that their RMA amendments do not go far enough.
One issue that has had a little air time during the campaign has been poverty and, especially, child poverty.
Claims for increase in child poverty have been uncritically reported. Claims that 20% of New Zealand children live in poverty are derived from a perverse definition of poverty. A child is said to live in poverty if she lives in a household with an income less than 60% of the national median household income.
On this definition, no increase of income would suffice to lift children from poverty if all other households’ incomes increases by more. It is a ridiculous measure of poverty which grossly exaggerates the amount of poverty in New Zealand.
Nevertheless, ACT believes that many children are indeed born into serious disadvantage. We believe kids at the economic bottom of New Zealand need a better deal. And we have a plan to help them. It is based on job creation and wage increases caused by lower taxes and lighter regulation, on welfare reform, and on parental choice in education.
We also acknowledge that many of those households in poverty are there because the adults in the house put their addictions ahead of feeding their children. A fact the Greens and Labour deny. ACT MPs will be supporting moves by Paula Bennett to require drug testing and to provide assistance to addicts to come of drugs.
In 12 months’ time, when Mr Dotcom is just a sour memory, our state schools will still be failing to provide 20% of their pupils with an education sufficient to find work in a globalised economy of growing automation.
ACT has a solution: Partnership Schools (or charter schools, as they are known overseas). The media print the Education Union’s attacks. But they put no effort into discovering and reporting the great progress being made by Partnership School pupils who were failing in state schools.
That is why ACT MPs will be pressing to allow every school to have the advantages of being a Partnership School.
The 20th century American journalist, H L Mencken, said that all elections “soon become and advance auction sale of stolen goods”. This election is a vivid illustration of the fact.
All the other parties simply compete to offer people goodies paid for from money confiscated from other people and, often, from themselves. The racket has become so absurd that the Greens have now announced a plan to give everyone who has a child a flax basket full of goodies. Even the Greens are willing to destroy plants if they believe it will buy them some votes.
The Taxpayers Union has their bribe-o-meter, which reveals the gruesome facts about how much extra tax all parties except ACT will be imposing on us after the election. But the media is generally uninterested in the issue.
Would New Zealand First have its support if the media reported that Mr Peters has promised more spending than the Greens, Labour and the Conservatives combined? His claim that he can fund it all by cracking down on tax evasion is laughable. New Zealand has one of the toughest tax regimes and lowest rates of tax evasion in the world.
ACT produced a plan to fully fund all our proposals. It has been galling to go to the trouble to use Treasury figures, to have our policies professionally costed and then see commenters just make up figures with regard to ACT. The same commentators then print no commentary on the absurd promises of the Greens, New Zealand First and the Conservatives.
In 12 months’ time, when the taxpayer has to pay, people will ask why this was not an issue in the election. Well, it was, but it was not covered.
Let me make another prediction.
Next year there will be over 100,000 burglaries. Those burglaries will affect around 250,000 people who will ask, “why was this not an issue in the election”?
That is why in parliament, ACT will be presenting legislation to send professional burglars to jail.
I am confident ACT will get its 3 strikes for burglary through and the law will dramatically reduce the number of burglaries in New Zealand, just as our 3 strikes policy has reduced violent crime.
* * * * *
When voters go to the polling booth on Saturday, many will ask: “Who will always vote for less tax, less nanny state and more personal responsibility?”
There is only one answer.
That is why I predict many will Party Vote ACT.
It will be ACT, not New Zealand First, holding the balance of power for the next three years.
We will support John Key and a stable centre-right government. And we will make it a more principled and reforming government
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.
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
"ACT believes Jose Pagani is right on the money when she said in the NZ Herald: “The left has won the contest of ideas a long time ago, and National has completely capitulated,”" said Robin Grieve.
"ACT has not changed its view that the role of government is to protect our rights but not assume our responsibilities. State dependency and control has devastated the poorer people in our economy and now middle income New Zealanders are starting to be captured in the same way.
"It is ACT’s vision that the level of lifestyle we enjoy should depend on our efforts, not the social policy of the Government. A safety net is one thing, but nets make devastating traps if the settings are wrong.
"With low taxes the economy grows more strongly, and people can use their own money to make better choices for themselves and their family. Under the left’s policies our ability to fund our own choices is diminished for most, and completely removed for some, by high taxation. We are then left to take what the State decides is best for our family.
"This is not the dream for New Zealand that ACT has. It was not National’s either once.
"ACT is confident that National will win next Saturday, but just how centre right the next National led government is will depend on how many National supporters decide that a vote for ACT is a better way to get the National Government they really want.
"ACT is the only party in this election arguing for lower taxes and reducing the nanny state," said Robin Grieve.
"The Conservative Party has a tax policy with no tax rate. Christine Rankin announced to a crowd of over 100 that she would pay for a $20,000 tax free threshold by raising $4 billion by taxing alcohol," said ACT leader Jamie Whyte.
"Confronted with the facts that this would be a 600 per cent increase in alcohol taxes, doubling the price of an average bottle of wine, her leader now denies this was the policy.
"Who is correct? The leader or the candidate?
"Mr Craig now says that the tax free threshold would be phased in over time, starting at $5,000. Is this a new announcement? Where are the costings for this? Treasury figures show it would require $2 billion in spending reductions, without allowing for increased avoidance behaviour (http://www.treasury.govt.nz/government/revenue/estimatesrevenueeffects/personal)
"Mr Craig says that he would save money by reducing the number of MPs and public servants.
"If every Member of Parliament costs one million dollars per year, reducing the size of parliament to 99 MPs would save $21 million.
"Where will the rest come from? What will Mr Craig make up next?
"He can run but he can’t hide. Political parties require more than money, they must have actual costed policies.
"Craig must explain how he would fund a $20,000 tax free threshold or abandon the policy," said Jamie Whyte.
During this election campaign, there has been much discussion of child poverty.
The discussion is confused by a definition of poverty unrelated to real, dollar incomes. A child is said to live in poverty if she lives in a household whose income is less than 60% of the median household income. On this measure, doubling everyone’s income would make no difference to the number of people living in poverty.
Even on this wonky definition of poverty, the common allegation that poverty is increasing is false. Child poverty rates (so measured) have fallen from about 34% 20 years ago to 16% today.
Nevertheless, no one can deny that the opportunities of many children are reduced by the relatively low incomes of the households they live in.
Like the other parties, ACT wants to see those at the economic bottom of New Zealand doing better. And we want their children to have better prospects in life.
Unlike the parties of the left, however, we do not believe that the answer is yet more welfare and yet higher taxes. We believe that the poor will benefit most from a dynamic, job-creating economy and from better education.
More specifically, we have a 5-point plan to reduce relative poverty and raise incomes:
1. Cut the company tax rate. There are almost no households in poverty where the adults have jobs. Cutting the company tax rate will create jobs and opportunities for those who are now unemployed.
New Zealand has one of the highest Company Tax rates in the OECD. It raises little income and is stopping investment, growth, jobs and real wages. By lowering the company tax rate to 12.5%, funded mainly by ending tax hand-outs to selected companies (“corporate welfare”), we can restore full employment and increase real wages. This single measure will do more to create jobs and lift incomes than all the other parties’ spending plans put together.
2. Cut red tape. Government red tape as measured by statutes and regulations has increased under National, stifling economic growth and making housing unaffordable. ACT wants regulation generally reduced and the Resource Management Act replaced with planning laws based around the Common Law. This will make housing affordable again.
3. Reform welfare. Virtually everyone in poverty is on a benefit. Welfare must become a hand up not a hand out. In America the use of lifetime limits has transformed welfare. A lifetime limit for able-bodied adults (with those who exceed it receiving strictly controlled payment cards instead of cash) will motivate long term beneficiaries to return to work. We can then be more generous with those who really need our support.
4. Improve education for poor children. Too many New Zealanders leave school with no employable skills. Many cannot read or do arithmetic. New Zealand’s real inequality is in education; the best in the world for 80% and awful for 20%. President Obama supports Charter schools because allowing communities to set a program that suits the community works. The 5 pilot schools in New Zealand have seen dramatic improvements in pupils who were failing in state schools now. ACT wants all schools to be able, where the board and parents wish, to become Partnership Schools.
5. Deal with addiction. There is not enough money, even in the deep pockets of Treasury, to fund drug and alcohol addictions. ACT supports moves by the present government to require those on the unemployment benefit to pass drug testing and to assist addicts to become drug free.
Those at the economic bottom of New Zealand need the opportunities provided by a vibrant economy and a good education. And they need incentives to pursue these opportunities.
They do not need more generous welfare, as the political left are promising. That will only undermine incentives to study and work. And, through the deadweight cost of the increased taxes required, it will reduce economic growth, wages and the job opportunities available.
The other parties make a great display of their concern for the poor. But concern is not enough. Their policies will increase the number of people who are stuck at the bottom.
Only ACT’s policies offer the poor a real chance of getting ahead in life.
Conservative Epsom candidate Christine Rankin today revealed a secret tax plan to radically increase excise tax on alcohol in order to fund their $20,000 income tax-free threshold while at the Epsom Candidates debate, held Wednesday night at Kings School in Remuera.
ACT candidate Stephen Berry challenged Ms Rankin during the audience Q&A session asking, “can you please reveal what level of income tax the Conservative Party intends to charge above the $20,000 threshold and if not, why not?”
Ms Rankin was unable to give specifics on the policy, stating that the rate charged would be between 20 and 25%. She then revealed, out of frustration, the Conservative Party intends to raise an additional $4 billion in tax revenue by increasing taxes levelled on alcohol.
Mr Berry says, “I was quite frankly flabbergasted by this response as I had not seen this policy in any Conservative party literature, nor have they previously mentioned it publically. Has Ms Rankin inadvertedly revealed a secret tax agenda?”
An analysis of current income received by the Government shows less than $1 billion of tax revenue is currently raised from alcohol excise tax. In order to raise an extra $4 billion, it would require the Government to increase taxes on alcohol by 400%.
“Colin Craig has tried to differentiate himself from National by not being involved in the dirty politics saga,” Mr Berry says. “Trying to conceal a plan for a massive tax increase from the New Zealand public is perhaps the dirtiest political trick of them all.”
Contact : Stephen Berry
Upper Harbour ACT Candidate
No 6 on ACT List