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ACT leader David Seymour vows to radically change the way New Zealand is governed, with a program of spending cuts and tax cuts that would reduce the size of government.
In Seymour’s alternative budget, given to Stuff, he charts a drastic path of debt reduction, with the goal of cutting loans by $ 76 billion over the next decade.
That would be enough to reduce the central crown’s net debt to 37% of GDP by 2030. The current government’s debt trajectory would see loans reaching 53% in the same year.
“All the other political parties are in a race to spend more money. But every extra dollar the government borrows today means higher taxes or fewer services for our children and grandchildren, ”Seymour said.
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“It is totally irresponsible to burden children with a mountain of debt when they have no voice on the issue,” he said.
But the loan comes at a cost: kiwisaver subsidies, free fees, winter energy payment, best down payment, Callaghan innovation subsidies, R&D tax credits, R&D growth subsidies, the growth fund provincial, career grants, the billion tree program, and film grants would go to waste, saving tens of billions of dollars each year.
ACT would also end contributions to the New Zealand Super Fund, which would also save billions.
Senior leaders in the public service would have their pay reduced by 20 percent, and the public service would also have to reduce the money it spends on personnel. Benefits, work for families and parts of the family package would also be cut.
ROBERT KITCHEN / Things
ACT party leader David Seymour has proposed a radical plan to reduce government debt levels.
That means up to $ 11.09 billion less spending in Seymour’s first budget, $ 15.35 billion less in the second, and $ 20.59 billion less in the third.
That would be a massive change in the size of the state. Currently, central government spending is about $ 80- $ 90 billion in normal times, although it is now higher due to the cost of Covid-19.
But there are some increases in spending. The two big ACT tax cuts would reduce the amount of revenue that goes into the Treasury by $ 9.6 billion in the first year and just over $ 3 billion each year thereafter.
The cost comes from a one-time annual reduction in the GST rate to 10 percent and from a permanent change in the income tax rate from 30 percent to 17.5 percent.
The party would also increase spending, with increases scheduled for public health and the border. ACT’s unemployment insurance plan would cost $ 181 million in its first year, and would increase to $ 200 million in its fourth year.
Spending increases come to just under $ 500 million each year.
The sweeping changes would see the government running a small surplus in 2028. Currently, the government is expected to run a deficit until at least the mid-2030s.
Seymour said his budget would improve the shape of the books.
“ACT would reduce the income tax rate from 30 percent to 17.5 percent, and cut the GST to 10 percent for 12 months, to put more money in the pocket of Kiwis and boost the economy,” he said. Seymour.
“New Zealand’s historic debt levels call for serious political leadership. Our current tax track is totally unsustainable. Party leaders must face plans to overcome out-of-control spending and debt, ”he said.
“It is not enough for us to kick the can down the road. We need an honest conversation now about our out-of-control spending and debt, ”Seymour said.
