Tuesday, 4 June 2019

Free Press, 4 June 2019

Finally, An Admission

The Prime Minister has finally admitted that the Labour Party ended Partnership Schools because its financial backers, the teachers’ unions, demanded it. Jacinda Ardern said on TVNZ’s Breakfast this morning: “The [teachers’ unions] were worried about charter schools, so we got rid of that.” An innovative education model that was engaging disadvantaged children underserved by state schools was scrapped to appease middle-class unionists in Wellington. Cynical realpolitik won out over the Prime Minister’s trademark “kindness”. ACT asked the Government to consider the evidence. It did not. It didn’t even bother waiting for the final, independent MartinJenkins report. This was a wasted opportunity to improve our education system.

The Nat-Lab Budget

For all intents and purposes, New Zealanders have had the same government for the last twenty years. Clark, Key, English and now Ardern have all played a game of taxing successful and productive New Zealanders to buy votes with their money. Five per cent of taxpayers now pay a third of all tax – $12 billion. We spend $34 billion on welfare. That’s not a recipe for an aspirational country or a successful economy. High taxes and more handouts haven’t even produced a more equal society. Our results over the past twenty years have been predictably mediocre.


Despite the fanfare over the “world’s first Wellbeing Budget”, and the glossy cover complete with a photogenic family (who have since moved to Australia), this was a Budget that could have been delivered by Bill English or Steven Joyce. Free Press challenges readers to find anything in last week’s Budget that it would have been inconceivable to find in a National Government Budget. There was nothing. National, having no other point of difference with the Labour Party, spent the entire week attacking the Treasury website instead of the Government’s Budget. It fell to ACT once again to provide the opposition.

Nothing for Teachers

It’s was disappointing the Government couldn’t find more money for teachers given the significant challenges in our education system. The OECD tells us that 17 per cent of children don’t meet basic literacy standards. Student results are declining in international assessments like PISA. There is massive inequality in outcomes, with Māori and Pasifika falling behind other groups. Teachers are the most important in-school influence on students but the Government can’t pay them more because it has blown billions on Fees-Free and the Provincial Growth Fund. The Education Minister has also taken on 300 additional education bureaucrats to run his 13 working groups and is paying the 2,900 staff at the Ministry of Education $2000 more on average.

No Tax Relief

The total tax take has risen to $90 billion. That’s nearly $50,000 for each and every household in New Zealand. By 2023, that will rise to $111 billion. We have a serious problem with high company tax rates and high marginal income tax rates which can take a third of the next dollar a person earns. The Government is telling young, ambitious New Zealanders: “If you get a good education, a good job with a decent salary, we will take more and more of the next dollar you earn.” Why should young people invest in education? Why should workers take overtime? Why should entrepreneurs take a risk? There was nothing in the Budget which said: “Economic growth is important, and this is how we will improve it.” In fact, with its new wellbeing focus – which began under the last government – Labour has dismissed economic growth as a primitive concept.

Economic Growth Matters

Just as Jacinda Ardern and Grant Robertson were rubbishing economic growth as old-fashioned, one of their left-wing colleagues across the ditch was tweeting about just how much economic growth matters. Andrew Leigh, a Labor MP and former economics professor at Australian National University, posted new research which asked: What is the main driver of life expectancy? It looked at the relationship between income and life expectancy in 197 countries over 213 years. It found that, by itself, GDP per capita explains more than 64 per cent of the variation in life expectancy and concluded that if policymakers want to prolong people's lives, economic growth is the most effective way to do it.

We Need Fundamental Change

If the Government wants wellbeing, it needs to promote economic growth. Labour and National don’t know how to do it or are simply ignoring the issue. The Greens dismiss the idea of growth because they believe it must come at the expense of the environment. NZ First are hostile to free markets which are necessary for growth. This is why we need an ACT Party in New Zealand. Our job is to articulate an alternative vision for New Zealand.

ReACT is Selling Fast

ReACT – on Sunday, 16 June 2019 – will unveil ACT’s plan for a prosperous, thriving economy, a high-performing education system, and an aspirational, achieving society. It will explain how we can achieve greater opportunities for all New Zealanders through more personal freedom. There are only about 25 tickets to ReACT remaining. If you would like to be there in person, please sign up here.