Monday, 17 May 2021

Free Press, 17 May 2021 Budget Week


The Haps

It is only six days until ACT’s Annual Rally Honest Conversations. Get your tickets here to see David Seymour, Des Gorman, and the ACT MPs at the ASB Waterfront Theatre.

This week the Government brings down a budget to spend over a third of New Zealanders’ income. The risk is that increasingly racialized government policy will overshadow it. The Churchman decision, awarding customary title over an area of foreshore and seabed in the eastern Bay of to six hapu, relied on tikanga as much as common law. It shows New Zealand’s constitutional underpinnings are not just being transformed by one political party, or even Parliament. ACT’s Nicole McKee has been widely praised for pointing out she’s living proof not all Māori want debate censored, no matter what the Māori Party say. In education, students are being made to apologise for their ‘white privilege.’ Others are told to keep their lunches in their bag in the hope they’ll eat the Government’s free ones that are being dumped by the hundred. We are not making this up.

ACT’s Alternative Budget

There is a short prayer, attributed to St Francis of Assisi that reads “Lord grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference.”

If Grant Robertson had been around in Assisi’s time, it would read differently. “Lord grant me the credit for the things I cannot change, the courage to ignore the things I could, and someone good at marketing to hide the difference.”

We go into this budget with record low interest rates, rising public debt, very strong terms of trade, and a Finance Minister who believes he’s doing a great job. For these reasons ACT has produced an Alternative Budget, showing what a party committed to tackling New Zealand’s challenges head on would do.

ACT’s alternative budget saves $11.2 billion in spending, takes on $23 billion less debt and delivers $3.8 billion per year in tax cuts. It cuts the 30 percent marginal tax rate to 17.5 percent, and reverses the 39 percent tax rate as well as the Government’s interest deductibility change.

What does it mean in practice? Average earners will get between $1,286 and $2,107 in their pocket a year from tax cuts. Under Labour civil servants’ wages are being be frozen, under ACT all earners will benefit from tax cuts.

The net result is that our budget would get the Government’s accounts back into surplus by 2025. Some people think repaying debt is silly because money will be practically free forever. We think sometimes you just have to say something out loud to realise how silly it is.

But the budget is not just the time to focus on fiscal issues, but all economic policy settings. The Finance Minister gave a pre-budget speech where he mentioned business only twice, and both times in the passive. We think business is a) essential and b) beautiful.

It’s the nexus of skills, investment, entrepreneurs, and customers. Business people come together voluntarily, to achieve what they could not do alone. It is human action, and Government policy should be making it as easy as possible.

That’s why ACT’s alternative budget starts by reversing many of Labour’s most anti-business initiatives, and brings in new pro-business policies. It reverses the Government’s recent workplace relations changes, including the Matariki public holiday, new sick leave entitlements, and 90-day trial changes. It also reinstates 90-day trials for all businesses and pauses minimum wage increases for three years.

We are a resource-rich country that makes it nearly impossible to mine. We need a streamlined consenting process for resource projects and land access so we don’t have to import coal and even aggregates from Australia.

For similar reasons, ACT’s Budget reverses the ban on new offshore oil and gas exploration permits. It repeals the Zero Carbon Act and rejects the Climate Change Commission’s recommendations because central planning failed for the Russians and won’t work for fighting climate change in New Zealand either.

At some point, the luck this Government mistakes for bad management will run out. We will sooner or later face less favourable terms of trade, more expensive credit, and a more complex COVID situation that we can’t just isolate ourselves from. That’s when we’re going to need a Government that drops the self-congratulation and stops squeezing New Zealand’s middle class.

ACT’s plan to do that, our Alternative Budget, can be read here.