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Budget

Libertarianz Budget 2007

The Libertarianz Party is pleased to present it's 2007 Budget as an alternative to the tax-and-spend budget that Labour will present at 2 pm today.

In essence, this Budget plans the implementation of major LIbertarianz policies over five years.  These include removing all compulsory taxation, selling off health assets, privatising schools, tapering off welfare, and restricting state activities to the legitimate arenas of defence, policing, law and justice.

Summary

Income tax, company tax and withholding tax are set at a flat 25% in year 1, decreasing 5% per year thereafter; the first $50k/annum income is made tax-free immediately. All other taxes, levies and fines are set at zero immediately. In addition to the flat income tax, a voluntary donation fund is set up from year 1. The donation fund expands over the first five years and plays an important part in paying off the government's liabilities, but from year 6 onwards, the fund is expected to cover only the government's legitimate ongoing activities.

A program of asset sales is undertaken commencing from year 1. Only assets relating to the government's legitimate activities in law & order and the military are retained. An excess cash balance is accumulated that collects some interest that is put toward the ongoing costs of the government's legitimate activities. All liabilities including overseas debt are paid off by the fifth year. Asset sales and additional defence expenditure are completed by the fifth year.

Newly recognised liabilities for pensions, DPB, and disabled & invalid benefits are funded up front over the first four years. Superannuation is paid until death for all people currently aged 56+ (excluding politicians). Anyone aged 55 or under is responsible for their own retirement. For the Government Superannuation Fund, only those already receiving the GSF pension and those in police, law, or defence will be eligible. Bureaucrats and MPs will not be funded.

DPB handouts continue for each existing child aged 0-3 until the age of 3.  Most benefits will cease in 2011. Invalid and disability handouts will continue to be paid to all existing recipients for 10 years. However fraudulent cases will be weeded out.

All health assets are sold off over first four years and expenditure reduced to zero in year 1.  The exception is that private health insurance premiums will be paid for anyone aged 56+ (except politicians) for their remaining life. Anyone aged 55 or under is responsible for their own healthcare.

Schools will be made into private companies in year 1, with ownership transferred to parents and teachers in the form of shares.

Urgently required expenditure in new defence equipment costing $10.3bn is spread over the first five years and the total annual defence budget rises by 60% over 5 years. The Police budget will be reduced by removing resources currently deployed against victimless crimes such as drug offences.  All departments with legal and property rights aspects, including Justice, Courts, Communications, Fisheries, Transport, Patent Office, Insolvency, etc. are to be brought under a single Department of Justice, Contracts and Property Rights.

Commentary

With the Libertarianz budget, the ridiculous churning of money through the government's sticky fingers will generally be eliminated by the first-$50k-income-tax-free. The $50k threshold merely reflects the current $10k-tax-free threshold implemented in 1986, adjusted for inflation using house prices from that era.   A flat tax on income over $50,000 of 25%, reducing 5% per year for 5 years, will fund a smooth transition.  After 5 years, no more revenue will collected from the citizenry by coercion or force.  Taxes will be voluntary. 

This will wind back the government's intrusion into the economy from the current 35% to a more sensible 1.5%.  It is well worth noting that under Labour the large economic expansion of the state has been concurrent with New Zealand's plummeting productivity statistic.

Unshackling the productive capacity of New Zealand's innovative, resourceful minds will lead to economic growth rates rising to around 10% in 4 or 5 years time. Libertarianz will see NZ growing in concert with other vibrant Pacific rim countries before Labour and National have a chance to drag NZ off the the bottom of the OECD table and into the third world. Letting go of Cullen's stodgy, tired old socialist ideals will unleash a wave of growth that NZ should have experienced 20 years ago. Roads, telecommunications and energy supply industries and infrastructure will grow quickly and naturally once the market incentives are in place free of state interference.

Welfare handouts that have grown inexorably since their introduction as a temporary measure in the 1970's will be rolled back. It is worth noting that many of New Zealand's social ills including generational welfare dependency, violent criminal gangs and DPB-encouraged births have arisen in conjunction with rising welfare spending. Compulsory charity will be replaced by allowing natural charity to grow quickly with charities made tax exempt immediately.

Libertarianz will give schools back to their communities - literally - with ownership in existing schools transferred to parents and teachers in the form of shares.  Indoctrination of impressionable young minds by 'politically correct' social engineers will be ended as a matter of urgency.

State health assets will be disposed of and private medical facilities will be encouraged to grow quickly by being made tax-exempt immediately.  The ineptitude of the state to provide quality healthcare is recognised and the sclerotic wasting of the state health system, in spite of evermore funding, is put to an end.

New Zealand's run-down military will be supplied with modern equipment and built up into a credible defence force for a country of our size and isolation.  The legitimate activities of the state in defence, policing, law and justice are recognised with a gradual funding increase over a period of 5 years.

ENDS

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