ACT exists to propose positive practical solutions to urgent problems, and one of the most urgent problems we face right now is the cost of living crisis.
“ACT has today announced a simple and practical policy that will give the average family a $749 dividend without reducing a cent from any public service. It is designed to help ease the burden of skyrocketing prices,” says ACT Leader David Seymour.
“The Government is planning to take $4.37 billion from consumers by selling carbon credits to businesses over the next four years. It has announced this ETS revenue will go exclusively into a $4.5 billion climate slush fund, that will pay for James Shaw’s yet-to-be-determined pet projects.
“ACT says, at a time like this, we should return carbon tax revenue to those struggling with high prices.
“ACT knows Kiwis are struggling, not just with a cost of living crisis, but a tax crisis too. That's why we would return the tax revenue collected from the Emissions Trading Scheme (ETS) to them in the form of a Carbon Tax Refund. Based on Treasury's latest forecasts, that would mean a $749 payment in the next fiscal year to a family of four ($187 per person).
“The Carbon Tax Refund would take each year’s revenue from ETS auctions and divide it by the population. Every adult would receive a reduction in their tax bill by that amount, plus their dependent children’s share. For people whose tax bill was lower than this credit, any remaining amount would be paid directly to them by Inland Revenue.
“Since Jacinda Ardern became Prime Minister, the tax on a litre of 91 petrol has increased by 41.6 cents – that’s a 44 per cent increase. If you fill up your car every two weeks with 50 litres of 91, you’re paying an extra $541 a year in tax.
“ACT is proposing to give the $1 billion a year collected through the ETS back to Kiwi families to help with the rising cost of living.
“This plan will not touch a cent going to health, education, police, or any other public service. All of the ETS revenue has already been directed exclusively to James Shaw’s climate slush fund.
”If you ever wondered why the Greens get more support in Herne Bay than Manurewa, here it is. They’d rather give billions in green corporate welfare than give relief to those struggling to pay for their policies.
“James Shaw's climate slush fund will not reduce emissions one gram because the amount of allowable emissions in New Zealand is already capped by the ETS. ACT’s plan will guide people towards lowering their emissions because if they spend money on carbon-heavy things, their money goes back into the ETS; if they take low carbon options, they avoid ETS charges.
“In fact, this policy would be good for New Zealand’s long term commitment to climate change. If the ETS gives people a carbon dividend, it is far more likely to be politically sustained over the decades as carbon prices inevitably rise, but the best way to benefit is to take the money and use less carbon.
“ACT’s Carbon Tax Refund would offset much of the impact on the cost of living due to the ETS. But it would retain the incentive to reduce emissions, because, for instance, the ETS tax would remain on every litre of petrol purchased.
“The benefits of this policy would be felt most strongly by those on low and middle incomes. $749 makes a much bigger difference to someone on $30,000 than $180,000.
“This is yet another positive proposal from ACT to help Kiwis who are being squeezed from every direction.
“ACT released a plan to deal with the cost of living crisis back in December. We would also:
Deliver a middle-income tax cut:
- Reduce the middle-income tax rate from 30% to 17.5%. Our plan will allow the average full-time worker to keep $2,000 more a year to help deal with the rising cost of living. That’s almost $40 more a week in the pockets of hardworking taxpayers to help them with the cost of life.
Cut wasteful spending:
- Zero base the public service by going back to zero and ask ourselves, if the departments and bureaucracies we have now didn’t exist, would we establish them today.
“ACT’s package of solutions will make life more affordable for middle New Zealand. Parents shouldn’t have to choose between swimming lessons for their kids and tank of petrol. We will keep listening to the concerns of New Zealanders and pushing for better solutions to make life more affordable for Kiwi families.”