24 June 2005

Vote ACT for lower taxes and a welfare system for the truly needy

Dr Muriel Newman Friday, Speeches - Social Welfare

Extract from speech to Helensville public meeting, Thursday 23 June 2005

Tax is shaping up to be the big political issue of this election and the only party to have consistently called for tax cuts is ACT.

ACT would reduce taxes in New Zealand to 15 cents in the dollar for income up to $38,000 and 25 cents for income over that for individuals and companies.

According to Treasury, these tax cuts would increase our growth rate by 1.5 per cent, putting New Zealand on a path to a first world standard of living. By starting to close the 30 percent standard of living gap with Australia, the 600 Kiwis who are crossing the Tasman each week would be stopped.

We have a record $7.4 billion surplus to pay for tax cuts this year, with a low tax rate contributing to increased taxes in the long run, it is also imperative that we tackle the problems in the welfare system to make lower taxes sustainable in the long term.

The welfare system used to be a safety net providing security for those who are unable to support themselves and a hand-up to work for the able bodied. Poor management of the welfare system has meant that there are now thousands of people receiving welfare who could and should be working. These able bodied people who are on benefits, in spite of the abundance of jobs available, are essentially abusing the welfare system. Cutting out the fraud and abuse that is endemic in welfare will enable taxes to stay low in the long term.

ACT’s five step plan to reform welfare has as a first priority the introduction of an annual reapplication process. Many of the people who are ripping off the system will fail to show for their interview and benefit numbers will plunge.

By requiring all the people who are capable of working to engage in a full time forty-hour week of work experience, beneficiaries who are already working will sign off the system.

These initiatives would significantly reduce welfare costs up to one third in the first two years. If 100,000 people get off welfare that would save around $2 billion a year.

For those of you who want lower taxes and a welfare system for the truly needy, your party vote for ACT will help achieve that goal.

ENDS

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