Free Press

ACT’s regular bulletin

Taxes Up
National’s colonisation of Labour territory is complete. We thought Helen Clark knew how to straddle the centre of politics but John Key has taken the art to a whole new leech-like level. The confirmation came last week after National boasted they had made the tax system more progressive.

You Heard That Right
With Bill English safely overseas, poor old Steven Joyce was left to announce that the top 10 per cent of households now pay 37.2 per cent of taxes, compared with 35.5 per cent when the socialist Labour/Green/NZ First parties were last in power.

Why Bother?
Meanwhile 42 per cent of households pay less than they receive back in cash transfers, and the lowest 30 per cent of income earners receive $10.6 billion in income support in return for $1.7 billion paid in taxes. What is even the point of electing a National Government? It is not obvious that a moderate Labour Government would be worse.

From the Horse’s Mouth
Most of this week’s Free Press is straight out of a National press release. They are boasting that they’ve increased wealth redistribution. The Government Budget is 80 billion reasons to vote for ACT.

Housing is the Underlying Driver
Also last week the Ministry of Social Development released its update of household income inequality from 1982-2015. It measures income inequality before housing costs and after housing costs. The verdict? Inequality is a housing story, it has not changed for over two decades, unless you count housing costs.

Specifically
Dr Bryce Wilkinson of the New Zealand Initiative says there has been no significant change in income inequality over the last 10, 15, 20 or even 25 years depending on the measure used, before housing costs. However the bottom 20 per cent of households (by income) spent 29 per cent of their income on housing in the 1980s compared with 54 per cent now.

Conclusions
The National Party is taxing top earners hard, then shovelling the money at low income earners who pay more for housing. Free Press suspects that it is mostly top earners who benefit from rising house prices, so completing the money-go-round. This is nuts.

What ACT Would Do
It is time to give taxpayers relief. As ACT has said before, the best way to do this is to index tax brackets to inflation (this would have saved the average household $2,500 in tax since 2010 by ending bracket creep). Ideally we should cut the top rates, clearly the ‘rich’ (read hard working PAYE earners) are paying their share. At the same time, there needs to be serious land use and infrastructure funding reform to get the housing market functioning again, but Free Press readers have heard it all before.

There is a Santa
Grant Robertson told parliament there is no Santa and the free market doesn’t work. Here is David Seymour at his best, reassuring the nation’s children that Robertson is wrong on both counts.

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