Thursday, 30 May 2019

Budget 2019: Tax, spend, and hope

“For all the fanfare, the Wellbeing Budget continues a tired approach of tax, spend, and hope”, ACT Leader David Seymour says.

“For decades, governments have persisted with progressive taxes and more spending expecting to get different results. This isn’t a recipe for an aspirational country or a successful economy. It hasn’t even produced a more equal society.

“The total tax take has risen to $90 billion – that’s nearly $50,000 for each and every household in New Zealand.

“Government spends an eye-watering $34 billion on social security and welfare.

“Superannuation payments now account for $14.5 billion. ACT has long advocated for increasing the age of eligibility to reflect the fact that people are living and working longer, to ensure fiscal sustainability and intergenerational fairness.

“Taxpayers are forking out $4.5 billion to the 300,000 people on a main benefit and $2.7 billion in family tax credits. With one in nine working-age New Zealanders on a main benefit and hundreds of thousands of others receiving welfare, we are becoming a nation of takers rather than makers.

“Government now spends $2.6 billion on topping up rents through accommodation supplements. This is an indictment on the inability of both Labour and National to meaningfully reform the Resource Management Act. RMA reform would allow more homes to be built, bringing down house prices. 

“Labour will fork out another $350 million for the failing Fees-Free scheme which represents a transfer of wealth to middle and upper-income families. The Provincial Growth Fund delivers $1.1 billion to marginal projects in provincial seats in order to boost NZ First’s electoral prospects.

“Incredibly, Labour has actually ramped up National’s corporate welfare efforts with $300 million for a new venture capital fund and $50 million for a Green Investment Fund. The idea that government can do a better job of picking winners than the private sector is deeply misguided. This will end badly for taxpayers.

“The Government’s R&D tax credit will cost taxpayers $158 million. Although New Zealand has 530,000 firms, the vast bulk of tax credits will be hoovered up by just 330 firms, and the scheme is unlikely to increase the overall levels of R&D.

“If we want to build an aspirational and achieving society, the Government would do better to tighten its belt when it comes to wasteful spending and allow taxpayers to keep more of what they earn.”