Which New Zealanders, Bill?

Bill English can't claim to speak for all New Zealanders on the future of NZ Super, says ACT Leader David Seymour.
"Bill English has accepted that Superannuation costs will balloon by a billion dollars extra each year but says New Zealanders are ok with this.  What he won’t say is, which New Zealanders?
"Surely it can’t be those entering the workforce who just lost their Kiwisaver kickstart in the budget but got no relief on the taxes they’ll pay towards Superannuation for the next 45 years?
"Surely it can’t be those under 35, who’ll retire with the government in debt by 198 per cent of GDP on historic trends?
"Surely it can’t be their grandparents who built this country and would be horrified to know they’ve left it on such a track?
"Australia has announced a plan to gradually raise its retirement age through to 2035. If there’s one thing New Zealanders all have in common it’s the need for such long term perspectives in Wellington."

ACT responds to Key’s RMA backdown

The Prime Minister’s backdown on the RMA is disappointing but not surprising, says ACT leader David Seymour.

“If we’re serious about councils allowing the next generation to build homes, we need to get some guts. We cannot have an act of parliament preoccupied with telling councils that building houses is inappropriate.”

In his Budget speech Mr Seymour pointed out, “The words inappropriate subdivision appear 156 times in the Resource Management Act, three of them in the principles sections.”

“Unfortunately, this backdown is not surprising,” said Mr Seymour today.

“The political class have focused on immigration, foreigners, tax, interest rates, government building programs, basically everything but fixing the RMA’s anti-development bias – the vital thing central government could easily change with a little political will.

“ACT will continue campaigning to free up land supply through essential RMA reform.”

ACT offers Labour a way out of NZ Super gaffe

ACT leader David Seymour today welcomed Labour engaging the debate over NZ Super’s future, but says they need to change tactics.

“Andrew Little appeared in The Herald to endorse means testing for superannuation before distancing himself from the idea within hours.

“He has shown why an issue with such important long term implications might be better handled under ACT’s referendum proposal.

"All parties can put aside their political positions, join together to form a cross party working group – like the flag committee – and appoint an expert group to identify workable options for the long term sustainability of NZ Super.  These options, including no change, could then be put to referendum for the voters to decide.

“It’s to Andrew Little’s credit that he notes these pressures arising from an aging population, calling superannuation ‘a looming issue requiring $30b by 2030’, and highlighting the government’s silence.

“If we don’t address this issue now, New Zealanders will be forced to pay higher taxes or face harsh service cuts in order to fund Super in the decades to come.

“I have confidence in the common sense of voters to support an option which would ensure the fiscal sustainability of NZ Superannuation, an option which is fair across the generations of taxpayers.”

ACT welcomes Budget's focus on poorest families

ACT Leader David Seymour welcomes the moves to focus spending on the poorest families.

“One of the problems with government is the pointless churning of income, taxing middle income families and then returning it to them with government spending,” said Mr Seymour.

“A good example of that is the $1,000 Kiwisaver kick-start, which I am pleased to see axed.

“The move to boost core benefit rates is a welcome move, in combination with the welfare reforms to date and the tougher work tests proposed.

“With superannuation linked via a floor relationship to wage rates, core benefit rates have fallen well behind other income support measures linked to wages.

“Moves to tackle child support debt and encourage parents to pay what they owe for their children are also a welcome move to encourage responsible parenting.”

Four hundred and thirty hectares? How about 27 million

“After all the fuss over property speculation and land banking, it turns out the biggest land banker is the government,” says ACT Leader David Seymour.

“The move to free up Crown land for housing development is sensible and long-overdue. But again, this is only a short term fix – we will soon use up the available 430 hectares.

“The good news is there is approximately another 27 million hectares in New Zealand, and only 0.7% of that is developed.

“We can free up this land by removing the anti-development bias of the Resource Management Act and encouraging councils to ease damaging land supply restrictions.

“The consequences of these restrictions are dire, as shown by the huge disparity of land prices inside compared with outside the Auckland rural-urban boundary.

“We need strong action in this area if we are to avoid locking an entire generation out of home ownership.”

Budget could have cut company tax

The Budget should have provided a vision of progressively lower taxes for business, says ACT Leader David Seymour.

“The best thing the government can do to create job opportunities is forecast a welcoming environment for business and investment.

“New Zealand has one of the highest company tax rates in the OECD, even compared to famously egalitarian nations like Denmark and Sweden. We need to step up our game if we are to attract job-creating business and investment.

“ACT proposes a long-term programme of cuts in company tax – from 28% to 20% over eight years. This sends a simple message: ‘New Zealand is open for business’.”

Tax burden continues to rise

“The Government missed a golden opportunity to end stealth tax increases by indexing tax brackets,” says ACT Leader David Seymour.

“The average household is $1036 worse off since the tax changes of October 2010 – a figure that’s increasing each year.

“This Budget was the perfect moment to index tax brackets. With inflation bordering on zero, the effect on government fiscal plans would be relatively small.

“Taxes on New Zealand households will increase when inflation resumes. Ending bracket creep now would force governments to be honest about any future tax increases.”

National’s Budget ignores elephant in the room

The Budget’s focus is too short-term and ignores intergenerational issues, says ACT Leader David Seymour.

“National is denying the demographic realities behind rising Superannuation costs,” said Mr Seymour.

“New Zealanders are living longer than ever, a trend which won’t go away any time soon. As life expectancy rises by about a year each decade it would be fair to raise the age of eligibility for Super by about the same.

“Otherwise, today’s young people will be forced to fund NZ Super through higher and higher taxes, with no guarantee of receiving the same benefits when needed.

“The longer we wait the more drastic will be the inevitable adjustment. We must recognise the need for more intergenerational fairness.”

What should be in Budget 2015

Today ACT Leader David Seymour outlined policy changes he would like to see in Budget 2015.

They included:

  •          A referendum deciding the future structure of NZ Superannuation, to achieve a sustainable and fair pension system for NZ through this century.
  •          The indexation of tax brackets to inflation so stealth tax increases don’t unfairly cut into household incomes.
  •          An eight year programme of one percentage point per year reductions in the corporate tax rate, to boost investment, jobs and wages. This could be largely funded by winding down existing programmes of targeted corporate welfare.
  •          Fundamental RMA reform to remove its anti-development bias, freeing up land for affordable housing and boosting investment.
  •          Expanding the Partnership School model by allowing state schools, if their boards choose, to convert to the Partnership School funding model, thereby giving greater options and a wider range of choice for parents and their children.

“New Zealand doesn’t need a policy revolution, but we need much more than National’s tentative incremental change,” said Mr Seymour.

“The government needs to provide a clear sense of its economic direction today for New Zealanders to prosper tomorrow.

“Enacting a future-focused Budget would accelerate growth, allow businesses and entrepreneurs to create more jobs, and encourage investment needed to raise living standards.

“ACT’s proposals on Superannuation, company tax rates, household taxes, RMA reform, and school choice would reduce poverty, create jobs, and foster a thriving, innovative economy.”

Mr Seymour has released a short summary of his proposals, which can be read here.

Scrap provisional tax? Yep

The provisional tax system should be scrapped, says ACT Leader David Seymour.

“Having to estimate volatile incomes is unfair on taxpayers, especially given the penalties that occur if you get it wrong.

“I am pleased to see the government recognised that the use of technology allows provisional tax to be managed much more like PAYE – calculated as you earn income.

“The Government is seeking views on whether provisional tax estimations should be scrapped in favour of simply paying tax as you actually earn it.

“I urge businesses and individuals to take up the invitation by the Government to submit on this issue.”

Go to makingtaxsimpler.ird.govt.nz to have your say.

  • Discussion on Better Digital Services – closes 15 May
  • Discussion on the plan for the Tax Administration – closes 29 May