One Year On - Sexy PR, Ugly Policies

Fri, 26 Oct, 2018

12 months in, the Labour-led government has delivered a combination of slick marketing and some genuinely appalling policies. Here’s the bad, the ugly, and what ACT would do differently, writes ACT Leader David Seymour. 

Taxes and more taxes

Michael Cullen has floated eight new taxes or types of tax and the Government has refused to rule any of them out. The taxpayer-funded Tax Working Group is essentially writing Labour’s 2020 election tax policy. The only silver lining for New Zealanders is that they will have the opportunity to deliver their verdict on this economic vandalism before it can be fully enacted. ACT says taxing to buy votes gives New Zealand the wrong incentives and would introduce a top personal and company tax rate of 25 per cent within the current surplus.

Corporate welfare on steroids

Shane Jones has put Simon Bridges’ corporate welfare machine on steroids with a $3 billion slush fund to buy votes in the provinces. New Zealanders will pay higher taxes in order to subsidise businesses that should – but can’t – stand on their own two feet. ACT would end corporate welfare and deliver meaningful tax cuts.

Middle-class welfare

The $3 billion Fees-Free policy transfers wealth to a group of well-off students while doing nothing to increase tertiary participation. ACT would use the Fees-Free money to invest in teachers so poor kids who don’t even get university entrance have a better chance of reaching the starting line.

A stalling engine room

Small businesses are facing a tsunami of costs and anti-growth policies – a higher minimum wage and the Employment Relations Amendment Bill. The engine room of our economy cannot thrive while it is being suffocated by red tape and higher costs. No wonder business confidence is tanking. ACT would slash red tape and compliance costs for small businesses so they can grow and create jobs.

Environmental madness

The oil and gas exploration ban was delivered via a shocking process, but the results will be even worse: scaring foreign investors, fewer jobs and royalties, and higher emissions as production moves offshore or domestic power generators use coal instead of gas. An own goal if ever there was one. Needless to say, ACT would push for the ban to be reversed. 

The ban on plastic bags – which make up just 0.01 per cent of landfill – will inconvenience Kiwi shoppers and see them move to reusable bags that are actually worse for the environment.

Housing

The Government has done just about everything except enact the policies it needs to – cutting red tape to allow the private sector to build more houses. Banning foreign home buyers – who represent a tiny fraction of buyers – will see fewer apartments built. Higher rental standards will increase housing costs. Kiwibuild will simply crowd out private sector activity. ACT would get on with reforming the Resource Management Act and removing the Metropolitan Urban Limit so Auckland can grow.

Partnership Schools – wasted opportunities

Partnership Schools were a bright speck of innovation in an otherwise monochromatic, state-dominated education system. Disadvantaged Māori and Pasifika kids that had been failed by the state system were engaged and doing well. Teachers unions – a Labour financial backer – couldn’t abide a system that didn’t force teachers to sign up to union contracts, and so the Government scrapped them. A wasted opportunity and a stain on this Government’s record. Educational choice will return under a future government ACT is a part of.

Zero Carbon Bill – massive costs for zero gain

The Zero Carbon Bill will place massive costs on households, but James Shaw doesn’t know how his Bill will affect global greenhouse gas emissions and temperatures. NZIER says average GDP per year between 2017 and 2050 could be $37 billion – or 9.5 per cent – lower. Per household gross national disposable income might fall by $10,000 or 4.3 per cent. For what environment gain? We simply don’t know. ACT says that, in order to have a robust debate about this issue, Kiwis need transparency on the costs and benefits of this bill.

Free-for-all welfare

Metiria Turei’s ghost is haunting the Government as it considers the Greens’ massive new entitlement policies. Working for Families changes alone would cost taxpayers $1 billion a year and would see more people on welfare. The real cost will be hundreds of millions of dollars higher because more generous benefits will lead people to work fewer hours and pay less tax. This Government wants to see an increasing number of people get stuck in long-term benefit dependency. ACT would ensure sanctions remain in place for those that dodge their obligations. We would also tackle welfare fraud through cashless welfare cards that can be used for select purposes only.