A Free and Prosperous New Zealand

Rodney Hide Speech to Kensington Swan, Wellington, 12.30pm, Wednesday 1 June 2005.

The ACT Party stands for Freedom and Prosperity.

Freedom and prosperity go together. The freer we are the more we prosper.

In order to be free and prosperous, we need four things:

Tax cuts

Tighter control of government spending,

Sanctity of private property rights

Freedom to contract.

Tax cuts

To be free and to prosper, Kiwis need to be able to keep more of what they earn.

That’s why ACT is promising a tax cut for every worker.

ACT will drop the top tax rate to 25 cents in the dollar.

ACT will drop the company tax rate to 25 cents in the dollar.

ACT will drop the middle tax rate of 21 cents to 15 cents in the dollar.

Making everybody better off is the key to ensuring tax cuts are well supported.

For someone on the average wage of $41,300 a year, these tax cuts mean an extra $2,000 a year, almost $40 a week.

It is the same as getting a 7% pay rise under the current tax scale.

Unions are striking for 5% wage rises. Their members would be better off with tax cuts, not strikes. And the country would be better off too.

Flattening and reducing the income tax scale were the main recommendations of the McLeod Tax Review the Labour Government commissioned in 2001.

Cullen paid a million dollars for the review, which confirmed the wisdom of a lower, flatter tax structure, but he threw the report in the bin.

The fiscal cost of the package is $5.7 billion a year. That’s $1.7 million less than the forecast surplus.

Michael Cullen has proved a very promising Minister of Finance. He’s been promising tax cuts ever since he got the job.

He told the Asia Society in Hong Kong in April 2000 that the “Government wanted to reduce the 33 per cent company tax rate when it could afford to” (The Press 13 April 2000).

In December 2002 he declared that low to middle income families could look forward to tax cuts in 2004 (New Zealand Herald 20 December 2002).

But in May 2005, Cullen revealed that his “deep, dark, tax secret” was only a weekly packet of chewing gum for hard working New Zealanders and not for another three years!

Cullen has increased taxes at least 30 times since taking office and all he can say about tax cuts is that “We” can’t afford them.

Well, hardworking Kiwis can’t afford to pay more and more tax.

Michael Cullen’s government is rich, yet hardworking Kiwis are poor.

The average family is no better off now than when Labour came to power. Their income is up. But all the gains have been taken in tax and higher prices.

It’s rubbish that tax cuts can’t be afforded.

The Labour Government is getting richer. Its net worth under Cullen is forecast to increase from $35.5 billion to $63.1 billion over the next five years. That’s a yearly increase of 12.2 per cent, $5.5 billion a year.

At the same time, Michael Cullen is increasing total government spending from $53 billion in 2004 to $73 billion by 2009.

That’s a $4 billion a year increase.

There’s plenty of room for wealth-creating, investment-enhancing and growth-promoting tax cuts.

Cullen’s other excuse for not cutting taxes is that tax cuts would push up interest rates!

But tax cuts lower prices – including interest rates. It’s tax hikes that put prices up. We know, we have had plenty of experience under Michael Cullen.

The tax he put on petrol put the price of petrol up, not down.

Under Cullen we have low growth, high interest rates and no tax cuts.

With tax cuts we would have low interest rates, higher growth and more money in out pocket.

Controlling government spending

Government spending has ballooned under Labour.

In the last four years, it has increased by a third and it’s forecast to increase another 38 per cent during the next five years.

Government is set to grow 40 percent faster than our economy.

The result is a Labour Government that is getting bigger but delivering less.

This Government consistently throws your money at problems. They don’t really care about the quality of spending, whether it fixes problems, or even whether it makes problems worse.

The Labour Government wastes your money on hip hop tours, wananga courses and grants to millionaire businessmen.

They find it easy to spend and waste other people’s money.

If they need more money, the Labour Government just invents another tax.

ACT will legislate spending caps to keep real per capita government spending constant. A government will need 75% support of Parliament to exceed the cap.

Spending caps will restore balance and discipline to government spending.

More importantly, spending caps do not mean spending cuts. Each year, spending will increase at the rate of inflation and population growth. But, unlike now, spending won’t shoot above that.

Such discipline would have a dramatic effect.

Keeping the real per capita rate of government spending constant in 2005 terms will mean 2006 spending being $1.3 billion lower, 2007 spending will be $2.7 billion lower; 2008 spending will be $4.8 billion lower and 2009 spending $5.8 billion lower than what Cullen is planning.

Spending caps mean politicians will have to work to a tight budget.

That’s the discipline of the family budget and it’s what we should expect of the government.

Private Property Rights

Legislation and regulations passed by successive National and Labour governments have trampled all over private property rights.

It is difficult to know what the worst abuse is, but the Resource Management Act is near the top of the list.

The Resource Management Act destroys the very concept of private property. Local government plans over-ride private property rights and make the use of land subject to political permission.

The Resource Management Act was conceived by Labour and passed by National.

It destroys our freedom, hinders our ability to prosper and is bad for the environment.

The Resource Management Act turns valuable environmental assets into environmental liabilities. The beautiful bush in your garden is no longer something to care for but something to get rid of because your success at looking after it puts your control of your own land at risk.

Private property owners look after their own resources better than any Government Department.

The worst possible nature conservation policy is to overturn private property rights, pinch environmental amenities and get the state to look after them. That’s what we do now.

ACT will pass a Regulatory Responsibility Act to ensure that politicians and bureaucrats have to answer basic questions before charging off with the regulator’s pen.

Forcing them to ask whether regulation is needed at all will kill off much of the legislation that currently barrels its way through parliament.

ACT will ensure that property rights are never taken without compensation.

Freedom to contract

The Labour Government has made it tough to hire and fire.

The harder you make it to fire someone, the less likely they are to get a job in the first place.

Labour’s Employment Relations Act is a minefield for small business.

I have meet many businesses too afraid to take on extra staff. They are concerned that it won’t work out and they will be stung.

Labour doesn’t care. The Employment Relations Act is designed simply to bolster the Labour party’s union mates.

ACT will pass the Freedom to Contract Act, freeing employers and employees to contract between themselves.

The busy bodies, the unions and the government will be removed from the employment contract.

This move will make New Zealand freer and more prosperous and it will help those struggling to get a job. The risky ones. People with a criminal record, no work history or a background of drug abuse – People who want to turn their lives around. People who want a chance.

Employers will be more likely to give them a chance – a chance they can’t risk giving them under Labour’s employment laws.

The ACT party says New Zealand is a great country.

ACT wants to make it even better. More freer and prosperous.

We have the people and the policies to make this happen.

This election you have two votes. ACT is only asking for one of them. The Party Vote.

ENDS

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