Wednesday 3 Jul 2002
Speech by ACT Finance Spokesman MP Rodney Hide, 4:30pm, Canterbury Employers Chamber of Commerce, WestpacTrust Room, 57
Kilmore Street, Christchurch:
Finance Minister Michael Cullen has run out of ideas after less than three years in the job. And he is supposed to be
the brainy one.
The story runs that Helen Clark passed a memo to all Ministers asking for policy ideas for another term of office.
Michael Cullen's note came back blank. I now believe it. The only new economic idea in Helen Clark's campaign launch was
a promise to double the number of apprenticeships!
Doubling the number of apprenticeships does not an economic policy make.
And yet that is the best that Helen Clark and Michael Cullen can do.
So proud are they of their one economic policy that they have made it Pledge Number Five on Labour's credit card
manifesto. Their only other economic-related promise is Pledge Number Seven, where they tell us they will not raise
income tax or GST any more. That's it. Their big pledge on taxes is to leave us where we are - taxed hard and taxed
harder than Australia.
We have a rising dollar, a hike in interest rates, falling business confidence - and all that Labour can do is call an
early election before it gets worse - and double the number of apprenticeships as their economic strategy.
It's no surprise that Helen Clark has taken to faking tax statistics to make her government look good. She has taken to
declaring that New Zealand has tax rates 'lower than anywhere in the western world, in fact lower than anywhere in the
whole OECD except Mexico'. A Helen Clark original has more credibility than her tax claim.
Helen Clark is right that the Mexican government has a fairer approach to taxes than her own. But so too do the
governments of the United States, Australia, Japan, Korea, Ireland, Switzerland, Spain, Poland, Turkey, Portugal and
even the Slovak Republic!
It's easy to see why Helen Clark has taken to making it up. Sixteen developed nations have cut their company tax rates
while Labour has been in Government. None have increased them. Against the world-wide trend, Helen Clark boosted the top
rate of tax on coming to office.
Our company tax rate is 33 percent. Australia has dropped its company tax rates by 6 per cent in two years. Australia's
companies tax is now below ours at 30 percent. That gives Australian businesses a considerable advantage over ours.
We are a high tax country. Our aim must not be to match the tax rates of our competitors but to go below them. We must
compete for skills and for capital by making New Zealand the most friendly place in the developed world in which to do
business - not one of the more unattractive.
ACT is campaigning to get our company rate of tax below that of Australia, and we are campaigning for a tax cut for
every worker. We have shown how that can be done immediately. Just imagine how much more prosperous we could all be if
we dropped our company and top rate of tax immediately to 28 cents with a timetable to reduce income tax to a flat rate
of 18 cents over five years.
It can and it should be done. Michael Cullen spent one million dollars of taxpayers' money on the McLeod Tax review
proving ACT's tax policy. Michael Cullen has thrown the McLeod review out the window and only ACT is saying that it
should be implemented.
Helen Clark's promise to business meanwhile is simply not to increase taxes further - and to double the number of
apprenticeships.
Helen Clark is vulnerable on the economy - and she knows it. She and her Ministers do not understand or care for the
economy or for business. Their great policy of "Hands On" government is in tatters.
The Kiwibank is proving a flop, as predicted. New Zealand Post has taken to terminating franchisees who don't want the
financial burden of Kiwibank in their business. Only Jim Anderton could spend $80 million of taxpayers money with the
net result of mowing down successful small businesses.
The other great flagship achievement of Helen Clark's "Hands On" policy was facilitating Sovereign Yachts onto
Hobsonville airbase for 40 jobs. The deal saw a ten million dollar property sold for half a million, at a cost to the
government of a million. Even Helen Clark - the Mistress of Spin - no longer defends that deal.
The results of Labour's disastrous economic management are plain to see. Last year - with the best economic conditions
for a generation - we managed only 2.3 percent growth.
We averaged three percent a year growth through the 1990s - which Helen Clark writes off as the decade when the economy
simply "marked time". By her own definition, we are now not even "marking time".
Finance Minister Michael Cullen set a target of four percent growth - it is nowhere on the horizon. The Reserve Bank
has confirmed that New Zealand on present policy has at best a two point five percent economy.
ACT New Zealand stands for individual freedom and personal responsibility.
We support and promote policies that increase individual freedom and choice. We oppose those that don't.
We support freedom because people should be free and because freedom allows people to prosper. The freer a country, the
more prosperous it is.
ACT'S economic policy is designed to give New Zealanders greater freedom. It will allow Kiwis to keep more of the money
they work hard to earn. ACT believes that the money that Kiwis earn is better for Kiwis in their own pockets, not in
government coffers.
ACT's immediate two aims are to put New Zealand's company rate of tax below that of Australia's and to give every
worker in New Zealand a tax cut. These two aims can be achieved immediately.
ACT's five-year aim is to reduce the income tax rate in New Zealand to 18 cents flat for business and personal. We
believe that a government focussed on its core priorities and core functions instead of funding an electoral lolly
scramble can do that.
ACT's aim is also to reduce the cost and risk of doing business in New Zealand. ACT's commitment to individual freedom
sees us constantly and vigilantly opposing the encroachment of the state into the rights of private property owners and
the freedom to contract. The costs of political interference into private decision-making is known as "red tape", and it
is hobbling New Zealand's growth potential. ACT is promising a bonfire of regulations.
ACT's goal is to boost New Zealand's growth potential by increasing the returns of doing business in New Zealand while
reducing the risks and costs that heavy-handed and unnecessary government regulation imposes.
The party vote for ACT is a vote for freedom and prosperity.
Ends