Speech in reply to the Budget 2007
Rodney Hide
Thursday, 17 May 2007
Press Release - Economy
The feeble growth outlook is evidence of failed policies.
Michael Cullen famously said his polices would be judged on whether they
produced four percent real growth. They should be his famous last words.
The outlook for the next five years is a paltry 2.3 percent. It's less
than two percent for the next three years!
That compares to the performance of Australia with projected growth at
close to 4%. The gap between New Zealand and Australia is set to widen
further.
There's no plan, or direction, in the Budget to give any New Zealander
confidence in the New Zealand economy.
The only thing this Budget guarantees is increased government spending,
high interest rates, and paltry economic growth.
In 2000, Cullen was spending close to $9000 per man woman and child Today
- well over $13,000. In 2011 it will be $15,000. Core Government spending
up $20 billion since 2000. That's a 32% real increase. This Budget sets it
to grow another $9 billion over the next three years.
Treasury says it can't see any improvement in government service despite
the big spend up. They know what every kiwi knows. In fact government
service has deteriorated. More money is going in, but less is coming out.
The way to achieve more savings and more investment is to put more money
in people's pockets, to achieve higher economic growth, and that means
across the board comprehensive tax cuts. That would mean more savings,
more investment and a more prosperous future.
Michael Cullen spends money to win votes, not to produce a better economy
or country. It's politics that drives this government's spending. ACT will
put an end to that. We will stop politicians bribing New Zealanders with
their own money.
ACT's Taxpayer Rights Bill will put politicians on a budget, just like
every well-managed company and home in the country.
ACT would cap government spending at the per person level it is today.
It's easy, add up how much Government spends today, divide it by the
number of people in the country and that's it. Not a cent more.
ACT would inflation-proof that figure and take population growth into
account - so not a single dollar would be cut from essential services like
health care or education.
But if politicians wanted to increase spending, they would have to either
cut ineffective spending in other areas, or ask Kiwi taxpayers for their
permission to increase taxes through a binding referendum.
A Taxpayer Rights Bill that will make political spending transparent and
accountable - with taxpayers given the right to veto expensive plans.
ACT's Taxpayer Bill of Rights will make New Zealand more democratic. It
will give Kiwis government 'of the people, by the people, and for the
people'.
An ACT budget based on such a Taxpayer Rights Bill would change the
relationship between the Government and the people.
A Government forever required to live within its budget, and having to
seek the permission of Kiwis, through a referendum, if they want to take
more of what we earn in tax.
It's government spending and taxation that matter most, not changes in the
operating balance which is Cullen's obsession.
Once again this is a budget for tax accountants to get fat on. The tax
package is incoherent - cutting company tax independently of personal
rates makes no sense, and the complicated tax credits for investing in
government schemes just adds to the complexity of the tax system.
The nonsense of Cullen's view - give them tax cuts and they'll only spend
it! It's taxpayers' money Dr Cullen. It's monetary policy that determines
inflation over the long haul, not people spending their own money - money
they work hard for and Dr Cullen spends without a care.
Given the size of the surplus it's time to behave like a grown up economy.
A package of tax cuts over a number of years.
Here's what a real Budget giving New Zealand a direction and confidence
would do:
Drop income tax to 20%
Hold government spending in real terms
Deal to red tape through a Regulatory Responsibility Bill
Demand transparency and accountability for all government departments
through Service Level Agreements that would see Department Heads fired for
failure to deliver
Distributing shares in the SOEs to everyone
Dismantle Cullen fund with a dividend into everyone's Kiwi Saver or an
Education endowment
We saw more spending on Health; but where's the result?
Figures on people treated, operations conducted so damning the Government
has ordered Treasury to stop publishing them.
The Ministry of Health once issued a detailed analysis of the elective
surgery booking system. A blow-by-blow account of success and failure. No
longer are we told how many people have died waiting.
ACT would introduce Service Level Contracts to ensure Government
departments review their performance and publish the results.
The government needs to listen to New Zealanders - it's well past time for
substantial tax cuts, red tape needs to be dealt to, and we need government
to rendered transparent and accountable.
Dr Cullen's Budget is just more of the same: tax, tax, tax, spend, spend
and spend and complicate the tax system so that he gets what he wants. The
result will be the same: slow growth, high interest rates, and New Zealand
slipping further behind the rest of the world.
ENDS