The Haps

ACT’s annual rally, Real Change Now, is selling fast. With just under two weeks to go, please get your tickets here. Meanwhile ACT has stood out as the only party giving a clear alternative to Grant Robertson’s insane budget blow out. More on that to come.

The Blowout Budget

Grant Robertson had a howler. The amount of unexpected borrowing and spending will make inflation higher than previously expected. That means mortgage interest rates will be higher than previously expected. Government debt will be higher than previously expected.

‘Previously expected’ was pretty recent. Just six months ago, in December, Treasury forecast a deficit of under $4 billion this year, falling to half a billion next year and returning to surplus in 2025. Generous people thought maybe Grant Robertson really did want to get spending under control.

Now the forecast is for 7 billion dollars of borrowing this year, and 7.5 billion next year. In other words, the Government is going to borrow $14.5 billion this year and next, $10 billion more than forecast in December.

It’s hard to visualize those numbers. If it helps, we are told it takes 33 years to count to one billion. Did that help? Probably not. Another way is to put it in per person terms. The Government will borrow $2,825 per person over this year and next.

If you get more than a few prescriptions a year, have a kid that catches the bus, or you really hit the jackpot with a 2 year old in the house (20 hours free daycare), then you’re one of the lucky ones in this budget. The truth is those benefits won’t match inflation, interest rates, and that Government debt your two-year-old will one day have to pay.

Of course, most people got none of those benefits. If you don’t get many prescriptions, live in a place where public transport isn’t really a thing, or don’t have a two year old, you are most of us. We just get inflation, interest rate hikes, and Government debt to pay off from this reckless howler that Labour like to call a Budget.

The question is how on earth do they waste so much money? The free prescription policy is a good example. Fact one, you only have to pay for 20 scripts per year. Your annual cost is capped at $100. Fact two, the Aussie pharmacy chains were already eating this cost as a loss leader, so people could get free prescriptions. Fact three, only 3.3 per cent of prescriptions are not picked up. Our unscientific survey of the ACT office has already found one of those people, who admit they just forgot.

Altogether, paying $5 for prescriptions is not a major problem for New Zealanders, and if it was they could get them for free at an Aussie chain. Now those Aussie chains will effectively get a tax cut because they don’t need to eat the $5 as part of their strategy. Chemist Warehouse claims it has eaten $42 million over the past five years. No more.

The cost is over $150 million per year. That money could have been used to increase funding for family doctors. Free Press suspects more people miss out on medicine because they don’t get a diagnosis and prescription in the first place, than not affording the $5.

That money could have been used to increase the Pharmac budget so more pharmaceuticals could be funded. You can now get free prescriptions in New Zealand, but the range of medicines actually available is among the worst in the developed world.

Or, here’s another idea. The Government could have cut taxes. We are overtaxed in New Zealand. We know we’re overtaxed because the Government wastes so much. Less Government waste would see us paying the correct level of tax.

A similar argument can be made about the Early Childhood for 2-year-olds. Everyone knows childcare is expensive, but nobody asks why. Humans have been caring for each other’s children for thousands of years, how has it become unaffordable just lately?

The only answer could be that childcare as we know it exists in a bureaucratic straitjacket. Free Press regularly hears of absurdities. Centres told off by Ministy staff because toddlers climbing on tables is a breach of tikanga. Centres with named tubes of nappy cream, because applying one that belongs to the centre would be medication, requiring explicit parental permission for each application.

No matter, Labour (and National, to be fair) are pouring more money into the same model without asking, ‘how could this be more efficient?’

That about sums up the difference with ACT. The others are happy to carry on hosing money at things that don’t work. Their definition of ‘works’ is that they get good press, and the newspapers, they all went along for the ride.

ACT on the other hand is campaigning for Real Change, to zero base Government. For any expenditure or regulation, Government should regularly ask ‘if we didn’t do this already,’ would we start it up today? If the answer is no, then stop. Free Press believes that’s the kind of thinking New Zealand needs. If you agree, we need you on board.

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