“With inflation at a 32 year high, the Government needs to take responsibility for its part in the cost of living crisis, and then take actions proportional to the problem,” says ACT Leader David Seymour.

“ACT called the cost of living crisis in December last year, but denial has stopped the Government from acting. First the Government has said there is no crisis. Then it was only temporary. Then there really was a crisis but don’t worry because other countries have one too. Now this Government is doing what it does best; gesture politics with a fuel tax discount here and a one off payment there that will make no difference to the underlying problem.

“The Government now needs to take three concrete actions to beat the cost of living crisis:

  1. Cut wasteful spending by $6.8 billion, as set out in ACT’s Alternative Budget
  2. Give immediate tax relief, as set out in ACT’s Alternative Budget, for example a nurse on $70,000 would pay $2,300 less tax
  3. Reset the Monetary Policy Remit with real consequences for the Reserve Bank missing its inflation target

“There’s one sector of the economy that is not in recession: government. Thanks to inflation we have a Finance Minister who is raking in record taxes to pay for all of his spending. We’re overtaxed and over-regulated. Grant Robertson needs to take his foot off the throat of taxpayers.

“Altogether, Government spending has risen from $87 billion pre-Covid, to $108 billion mid-Covid, to $128 billion in the year to this June.

“As Treasury Secretary Caralee McLiesh has noted, New Zealand had the second largest fiscal response to Covid in the OECD. First was the United States who, you guessed it, are also experiencing killer inflation.

“The Government will tell you that inflation is worse in the U.S. and U.K. What they do not tell you is that governments in those countries are literally spending trillions. Joe Biden’s $1.9 trillion stimulus, and Boris Johnson’s first ever £1 trillion U.K. Government budget are driving inflation there too.

“It doesn’t have to be this way. Real change is possible. But it requires courage. Avoiding difficult choices has given us the country we have today.

“ACT was the only party to produce a fully-costed alternative budget. We would reduce the tax burden on every earner by simplifying the system to two tax rates, we would reduce wasteful spending by $6.8 billion in 2023, we would pay down debt faster to get us in surplus next year, we would scrap pointless COVID rules that stifle productivity, and we would welcome investment from OECD countries.

“We would then use these reductions in Government spending to give taxpayers real relief from rising taxes. ACT’s alternative budget would give real tax relief to people fighting the cost of living crisis. Here are some examples of the tax cuts people would receive.

“Finally, the Reserve Bank Governor needs to be held accountable. As Treasury has noted "in the first Policy Targets Agreement (PTA), it was expected that any departure of inflation from the target range would trigger a formal process of review of the Governor's performance – in this sense the PTA played a key role as an accountability document."

“That first Policy Targets Agreement, like others around that time, was clear. It required the Bank to get back to 0-2 per cent inflation by the end of 1992.

“Today Labour has replaced the Policy Targets Agreement with a Monetary Policy Committee Remit, that has no consequences for failure. It just says "in the medium term." The Reserve Bank Governor can do anything he likes and argue that he’s on track to perform eventually.

“The next Government will have to deliver real change, ACT is showing the way to do this with practical and well thought out policy that will turn our economy around.”