Act’s scorched earth proposal

Written By: - Date published: 12:29 pm, May 11th, 2022 - 41 comments
Categories: act, Christopher Luxon, Economy, national, national/act government, privatisation, Public Private Partnerships, public services, same old national, tax, treasury - Tags:

Act has publicly released its proposal to decimate the state should it have a say in the next Government.  Its Real Change Alternative Budget may be wet dream inducing for Ayn Rand acolytes but for the rest of us the proposals should instill a deep sense of dread.

Departments for the chop under its proposal would include:

  • Ministry for Women
  • Ministry of Māori Development
  • Human Rights Commission
  • Office for Crown-Māori Relations
  • Ministry for Pacific Peoples
  • Ministry for Ethnic Communities

Other cuts would include:

  • Climate Change Commission, Energy Efficiency and Conservation Authority, Freshwater and Land Use Programme, Forestry Programme
  • Climate Emergency Response Fund’s operating and capital expenditure
  • Contributions to Superannuation Fund halted, and the age of eligibility increased at a rate of two months per year until it reaches age 67, at which point it would be indexed to life expectancy
  • Human Rights Commission, Office for Crown-Māori Relations abolished
  • Ministries for Women, Māori Development, Pacific Peoples and Ethnic Communities abolished
  • Fees-free programme for university
  • KiwiSaver subsidies removed
  • Winter Energy payment would be restricted to beneficiaries and Community Service Card holders
  • First Home Grants and Progressive Home Ownership schemes
  • R&D Tax Credit, Callaghan Innovation, Covid-19 Horticulture Subsidies, Growth and Development Spending, the Provincial Growth Fund, the Cultural Sector Regeneration Fund, New Market Operations Spending, Cultural Sector Regeneration Fund
  • Domestic and international film subsidies
  • Jobs for Nature, Biodiversity Jobs, Pest Control Jobs, Waterways Jobs, Pine Control Jobs and He Poutama Rangatahi
  • Regional Skills Leadership Groups
  • Workforce Development Councils
  • “Shovel-Ready” infrastructure projects

But that would not be all.  Act proposes that public service numbers are returned to 2017 levels.  Every single new public servant associated with the Covid response would face the chop.  The cuts would not include Police, front-line health and education workers, or the Defence Force.  But if you are in a back room and your job is to make the job of front line workers easier then you are potentially gone.

Privatisation of public assets on a grand scale would happen with National’s mixed ownership model being applied to a number of organisations.

There would be tax cuts, major tax cuts.  Tax brackets would be flattened.  If you earned below $70,000 you would pay 17.5% on your earnings.  Each dollar above $70,000 would be taxed at 28%.

This change would result in tax increases for many taxpayers, particularly the poorest.  Currently if you earn $14,000 or less you pay tax at 10.5%.

To get round this particularly egregious proposal Act have come up with the Low and Middle Income Tax Offset to make sure those on lower incomes would not be stung by the changes.  They could have achieved this by having a third tax bracket matching the existing bracket.  One wonders why they needed an offset to achieve this.

For the rich it would be party time.  Not only would the top two tax brackets go but the bright line test for land would be removed and interest deductibility for residential property investment returned.

So how has National responded to its junior partner providing some pretty terrifying stakes in the ground?

Christopher Luxon was interviewed this morning on Morning Report and was asked about Act’s budget and the suggestion that David Seymour should be a future Minister of Finance.  To these suggestions he managed to come up with such banalities as:

We’re 18 months out from an election. Any talk of a coalition or possible coalition arrangements is very, very premature and very, very hypothetical.”

And

From my perspective … the bottom line is I’m interested in making sure that this Budget actually delivers for the squeezed middle, that’s what I’m focused on.”

And can someone tell me what this mean?

All I’m going to say is we’re going to be focused on what we’re focused on in the National Party right now.

Act could be acting as a stalking horse for the right and laying out potential policies that its rich backers want to see introduced.  The problem is that National has some of the same backers.

This proposal would decimate New Zealand and provides even more reason for progressives to support their parties.  Act is clearly wanting to reduce the state down to the size where it can be drowned in a bath tub.

41 comments on “Act’s scorched earth proposal ”

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  1. Tony Veitch (not etc.) 1
    11 May 2022 at 12:42 pm

    Thank you Micky, for your fortitude and sacrifice in looking at Act's appalling proposals.

    You've got a stronger stomach than me.

    Good God, could the Natz ineptitude be viewed by the electorate as 'moderate?'

    • AB 1.1
      11 May 2022 at 3:00 pm

      …could the Natz ineptitude be viewed by the electorate as 'moderate?

      Quite possibly – National's 'responsible austerity' in contrast to ACT's 'extreme austerity', accompanied by numerous and misleading comparisons to household budgets.

    • Just Saying 1.2
      12 May 2022 at 4:48 am

      We need to look at why people have become so cynical about liberalism. I think this is the most important question for the left today, especially with a massive crash looming. The question is what keeps going wrong.

      I am left and Liberal. It seems to me that the two are one and the same thing. But while we fail to address the economic-injustice 'elephant in the room', ironically, so often underlying of many of these very issues, they will continue to successfully be used to divide and distract us. Completely unnecessarily.

      I'm not going to link, but I think Chris Hedges has expressed this brilliantly. His work is easy to find.

  2. riffer 2
    11 May 2022 at 12:50 pm

    Notwithstanding that my job would be on the line, as is the entire place I work for, is it just me that thinks this would be hugely recessionary?

    Seems to me Act hates ethnic minorities, women, environmentalists, innovators, and anyone smarter than them.

    • infused 2.1
      11 May 2022 at 1:13 pm

      You don't need a ministry for every single race / gender.

      If the govt actually focused on industry climate change, I might be interested. The whole 180 (marketed by Shell) to push climate change to the consumer is laughable. Hit industry.

      We're also hitting a recession regardless.

  3. Tiger Mountain 3
    11 May 2022 at 12:51 pm

    ACT is the party of the Chicago Boys, Pinochet, Thatcher, Reagan, Roger Douglas, Ruth Richardson and Tony Blair. It is time to step up and give the Epsom twerker some medicine.

    • PsyclingLeft.Always 3.1
      12 May 2022 at 7:42 am

      Aye ! Labour MUST Highlight their Points of Difference. From the nats as well. No good leaving it till months before the Election. Will be too late……

  4. roy cartland 4
    11 May 2022 at 1:29 pm

    Someone here(?) made the comment that the NZ public can't be 'that stupid' to vote for these, which are so obviously destructive to all of us. But people have in the UK, and not out of stupidity, but maybe despondency, propaganda have a hand in it?

    Also, I think Bomber at TDB has made a good point on this: David Seymour has dropped all pretense at acting in the interests of the people; if he gets even a small number of these through, he'll be richly rewarded when he exits politics to go after a 'real paying' job.

  5. Jenny how to get there 5
    11 May 2022 at 3:24 pm

    How can ACT get it so wrong?
    I get it, ACT are the party of the privileged, that's their constituency. But a lot of these policy proposals will see New Zealand with more inequality, and with both a degraded natural and social environment to everyone's detriment including the rich.

    New Scientist gives us a clue, ACT are in line with their constituents views:

    Privileged people misjudge effects of pro-equality policies on them

    People from societally advantaged groups think equality-promoting policies will affect them negatively, even if they would actually benefit

    Carissa Wong – New Scientist, 6 May 2022

    People from privileged groups may misperceive equality-boosting policies as harmful to them, even if they would actually benefit.

    Previous studies have found that advantaged people often don’t support interventions that redistribute their resources to others who are disadvantaged, in zero-sum scenarios where there are limited resources.

    Now, researchers have explored the degree to which people from advantaged groups think equality-promoting policies would harm their access to resources, in scenarios where the strategies would benefit or have no effect on their group, while bolstering the resources of a disadvantaged group…..

    Read more: https://www.newscientist.com/article/2319115-privileged-people-misjudge-effects-of-pro-equality-policies-on-them/#ixzz7SwfuJsQW

  6. Patricia Bremner 6
    11 May 2022 at 3:35 pm

    I think "Stalking Horse" is right. Floating the ideas and watching fallout. The Act Leader obviously thought he would be offered Treasurer, his face said it all. So dissension in the rightwing Coalition?….. Oh wait Luxon says… "Not decided.. 18 months to go" Wow!!

    Watch this like hawks…. is this a distraction?…. while they lay plans in the National Party?

  7. Corey Humm 7
    11 May 2022 at 4:21 pm

    ACT are a disgrace, but more than enough people that the left needs to vote for us are so tired of the lefts obsession with race, sexuality, gender over class and bread and butter issues that they would vote for ACT to dismantle any perceived wokeness from the bureaucracy and the bureaucracy itself.

    A lot know they won't be any better off under labour or national/act economically but are so pissed off at being talked down to by upper middle class to rich intellectual snobs who hide their classist hatred of working class people with faux progressive talking points , lecturing poor people to check their non existent "privlidge" , many pissed off working class people could easily vote for a party promising to eradicate any perceived wokeness, identity politics from the bureaucracy.

    Sure the economic policies of act won't help them but ACT promising to dismantle the power of classist woke snobs is a powerful vote winner and the left condemning it is just giving Act free advertising.

    I have no idea why the left won't attack them by constantly reminding everyone how many times they voted to raise taxes from 2008-2017.

    The left going on about tax cuts for the wealthy doesn't have ant cut through cos people don't care about the rich they care about their costs and the left have lost the room when it comes to identity issues and desperately needs to stop bringing them up.

    Unpopular opinion but one of the reasons a majority of labour voters and a vast majority of voters want tax cuts or tax reform is because of tax creep. Min wage increases are putting min wage workers into a higher tax bracket and it's shameful a Labour govt won't do anything to adjust it.

    Labour should quietly adjust tax brackets for the lower and middle earners and everytime national says tax cuts labour should say gst rises.

    I fear labour doubling down on idpol issues will be the death of this government. They've ruled out the popular or semi popular things they could do and are going full steam ahead with unpopular constitutional reforms, weird idpol reforms under urgency and have this arrogant we know better than you vibe. Helen Clark at this stage in her premiership pivoted and one a third term if this govt can't pivot away from social liberal issues and keeps having ministers like Willie Jackson go on tv and say things akin to democracy being outdated and needing to be reformed and not focusing on working class and middle class bread and butter issues when the opposition will… Badness.

    The left seems to forget that a huge swathe of labours voters are socially conservative and this obsession with social liberalism over economics could screw them not just next election but for a long time.

    Many working class people feel social liberalism and wokeness is just a new acceptable way for rich people to shit on and other poor people.

    Vote labour green get economically shafted and attacked by rich people for your non existent privlidge

    Vote national act get economically shafted but the woke brigade who hate you and scare you will get shafted and have next to know power.

    It's how Trump got in.

    And anytime anyone working class mentions this they get bombarded with abuse from intellectual upper middle class snobs telling them to pretty much sit down and know their place.

    Labour was formed to represent the working class not to represent rich classist snobs who despise the working class….. We have the green party for that….

    • MickeyBoyle 7.1
      11 May 2022 at 8:34 pm

      ''ACT are a disgrace, but more than enough people that the left needs to vote for us are so tired of the lefts obsession with race, sexuality, gender over class and bread and butter issues that they would vote for ACT to dismantle any perceived wokeness from the bureaucracy and the bureaucracy itself.''

      You've nailed it. If Ardern wants a third term she needs to do a couple of things, dump He Puapua, co-governance and three waters. Genuinely address peoples inflationary concerns and then call a snap election. The longer people suffer, the worse it will be for Labour come election day.

      And for gods sake, keep Mallard out of the headlines!

    • Ross 7.2
      12 May 2022 at 8:00 am

      Min wage increases are putting min wage workers into a higher tax bracket and it's shameful a Labour govt won't do anything to adjust it.

      Minimum wage earners aren’t there yet but they could well be in the near future. I would have thought that all voters, even the tribal, would support a policy of increasing the tax brackets which of course National has promised to do. Such a policy would mean more income for all income earners over $14,000 and would assist those on or near the average wage more than it would the wealthy. At times like this, Labour needs to put politics aside and do the right thing.

      As for ACT’s policy to increase the superannuation age of eligibility to 67, I seem to recall that was Labour’s policy not so long ago. 🙂 Again, lets put politics aside and do the right thing.

      https://www.rnz.co.nz/news/political/274322/super-for-working-over-65s-unfair-little

      • KJT 7.2.1
        12 May 2022 at 8:17 am

        Increasing the super age is not "the right thing". Unniversiality is the only reason why we still have super. Why blether about the unfairness of getting super while still working, without mentioning the equal unfairness of those who were able to save for retirement, still getting super. Simpler just to keep it universal and tax higher incomes/wealth more.
        If you think ACT want to stop at simply increasing the super age, I have a bridge to sell you.
        ACT’s ultimate aim is to have “useless mouths” AKA anyone who is not priviledged, including the elderly, starving on the streets, so they can pay less taxes, and scare employees into working for slave wages.

        Cutting taxes, to allow employers to get away with continued low wages, by hiding it with tax cuts, is also not “the right thing to do.
        We’ve just had a graphic illustration of the disastrous effects of starving State services of funding.

        If you are really concerned about tax creep, lack of progessivity and fairness you would be advacating for a tax free bracket at the bottom, higher taxes at the top end, wealth taxes instead of workers paying almost all tax, and removing the, strongly regressive, GST.

        The neo-liberals in Labour wanting right wing welfare reductions, doesn't make it the "right thing to do".

        • SPC 7.2.1.1
          12 May 2022 at 10:41 am

          A low income earner rebate is a lot less costly than an income tax free threshold – because it would only go to those below say the median income.

          Doing that would allow more money for moves to other tax brackets, say from the MW up to the median wage and from the median to 2 * the MW.

          Such as

          10 cents up to $15,000 (10.5c to 14,000 now)

          20 cents up to $40,000 (17.5c to 48,000 now) – MW

          25 cents up to $60,000 – median wage

          Note a c5 cents rebate for low income earners up to $60,000 (the detail would be as to the fade out rate to zero by $80,000 so that no one is worse off than now).

          30 cents up to $80,000 (30.0c to $70,000 now) – c2*MW

          (by $ 80,000 there would be little change to current tax paid)(a bit lower below $60,000)

          33 cents up to $180,000

          39 cents over $180,000 as is.

          • KJT 7.2.1.1.1
            12 May 2022 at 11:29 am

            Or.

            Simply have a tax free threshold and adjust the top rates so that anyone over the median pays the same as before.

            Less complex.

            It doesn't change the fact we hate those who work so much, that we tax them the most. Middle income PAYE payers pay the bulk of all tax.

            And, not those who gain money without working. Such as speculators and rentiers. Adam Smith would be disgusted.

      • SPC 7.2.2
        12 May 2022 at 10:53 am

        A policy to raise the age of super has to take into account those not employed and in poor health.

        IMO anyone over age 60 (we neglected this when raising the age from 60 to 65 in the 1990's) (and all those with disability that prevents work and not covered by ACC) not in work should get the Super rate of income. That might because of poor health or while on work tested unemployment.

        With that exception I see no problem with raising the age (albeit we might move to UI and different work arrangements in future). I would suspect we will see a 2030-2050 schedule (3 months a year – age 65 to age 70 – over 20 years).

    • SPC 7.3
      12 May 2022 at 11:17 am

      A lot of people say stuff based on their preconceptions, without regard to fact.

      The Green Party want wealth taxes, better quality rentals and a rent increase freeze, the RB to consider employment when setting policy,

      Support legislation to ensure redundancy and also the end of the stand-down for benefits between jobs. And support for unions/awards.

      https://www.greens.org.nz/workforce_policy

      A range of sustainable non-market and market housing solutions is needed

      • Housing NZ should be resourced to build more state homes, as well as upgrade existing state homes. This should be linked to local employment and apprenticeship schemes.
      • Government should enable community groups to contribute to housing supply.
      • Affordable housing should be created through progressive home-ownership rent-to-buy schemes.
      • Government should reduce barriers to housing developments on Maori land and insure finance is available for papakainga and other iwi and hapu-led housing developments.

      https://www.greens.org.nz/housing_policy

  8. Hunter Thompson II 8
    11 May 2022 at 4:30 pm

    I'm not an ACT supporter, but they may be onto something by advocating for the dumping of film subsidies (Kiwiblog states Hollywood has scored $600 million from the taxpayer over 2010-2018).

    MPs are too often attracted to those 'cos there is a strong feel-good factor – they usually mean a glitzy film premiere to attend a year or two later.

    You don't get to do that if the money is used to conserve some rare species of bird on an offshore island, or to give nurses a pay rise.

    • Muttonbird 8.1
      11 May 2022 at 8:37 pm

      A simplistic, conspiratorial view, particularly about MPs backing $600M to foreign studios so they can get on the red carpet.

      What you nor ACT never account for is the wider benefit (this is a problem with all his cuts). Not just the direct $6000M paid into the economy by those studios, but the added tourism.

      Tourism lifting to challenge agriculture as NZ's highest export earner is no accident. The NZ film industry had an important part to play in that.

      Rimmer's plan would kill almost the entire industry overnight and that's a direct attack on me because that's where I work.

      • Hunter Thompson II 8.1.1
        12 May 2022 at 1:59 pm

        Are there any independent studies proving the existence of "wider benefit" you refer to?

    • Tricledrown 8.2
      11 May 2022 at 10:55 pm

      The Film industry has grown from a backyard industry to billions Thousands of high paid jobs the tourism and tech industries created many thousands more jobs.To make money to create jobs you have to invest. Hunter Avatar , LOR, Narnia many many more productions are putting Billions back into NZ.Seymour is a myopic fool a scycophant of the Chicago school Argentina adopted ACT type policies in 1996 18 months later their economy went from the frying pan to the fire ,from 6% unemployment to 38% unemployment. the World Bank stopped its draconian policy and has never used it again

    • dv 8.3
      12 May 2022 at 7:43 am

      And I thought I read that there was a 6$ return for every Dollar spent
      That’s quite good!!!

  9. Binders full of women 9
    11 May 2022 at 5:36 pm

    I believe there are some merit in some of the ideas. Eg restrict winter energy payment to community card holders. Kinda by accident I live in a street which is mainly multi-millionairre boomers. I am gobsmacked that what Mickey believes is the "Empire Strikes back" (the petrol discount and super boost) is giving all my neighbours $80 a fortnight more.(None of them need it). I think that works out to about 7-8%.. I hope I get that kind of rise later in the year so as to avoid striking.

    Also get rid of film subsidies and 1/2 million a year in boozy lunches for Callahan slush fund. And we're still living with the stupidity of Shane's daft picks for PGF.

    Keep the pest free jobs. How can you index Super to life expectancy??- presumably they mean the WHOLE population and not the Maori Party idea?

    • SPC 9.1
      12 May 2022 at 9:59 am

      CSC holders would include those with little other income apart from super – the near third of those on super who are working do not need the power income supplement.

      • Craig H 9.1.1
        12 May 2022 at 10:42 am

        The difference between CSC thresholds and super allows for some work – around 5 hours per week at minimum wage for a single superannuitant or 7 hours between them for a couple. It's also a back door to means testing of super.

        • SPC 9.1.1.1
          12 May 2022 at 10:57 am

          Not really, the power income supplement is not super. And they have not increased the rates rebate for those on super for some years now … .

          • Craig H 9.1.1.1.1
            12 May 2022 at 11:42 am

            Making it available to all beneficiaries except superannuitants above a particular income level doesn't leave much plausible deniability around means testing.

            CSCs are also available to low income workers – would the proposal be to extend WEP to them as well?

            • SPC 9.1.1.1.1.1
              12 May 2022 at 12:25 pm

              They are not proposing a means testing of Super, only of the WEP.

              ACT would restrict the WEP to only those on super who would qualify for a CSC and all of those on benefits.

    • Craig H 9.2
      12 May 2022 at 10:35 am

      The reason the policy was universal rather than excluding those who weren't eligible for CSC-holders was that it was a lot of work for not many exclusions. Stats NZ income figures for those aged 65+ bears that out – the most recent income figures have median income of $415/wk and average income $628/wk. These figures include super, i.e. mostly they aren't earning much on average outside of super.

  10. Christopher Randal 10
    11 May 2022 at 5:48 pm

    I notice that he hasn't proposed reducing the size of Parliament, cutting staff in Parliamentary Services or reducing the staff of parliamentary research units.

    • Tricledrown 10.1
      12 May 2022 at 7:38 am

      He shopuld be advocating for getting rid of if you win an electorate seat you can drag in all the flotsom that is ACT.ACT are a Party built on the Tax Payers Welfare thanks to National allowing them to pick up the Politicians welfare Cheque! Parliamentry bluddgers who are dog whistling divisiveness,Racism playing up to the far right alah Trump,Le Pen,Bolsinaro,Marcos.Seymour is a rotten apple scraping the bottom of the barrel.

  11. Peter 11
    11 May 2022 at 9:10 pm

    All they have to do is say "Three Waters" and "He Puapua" the right number of times in the right places and the braindead policies will be on the way.

    It is very clear we have the numbers that dumb. It's just a matter of where they're going to coagulate.

  12. newsense 12
    11 May 2022 at 9:25 pm

    So when do Maori or at least perhaps various Maori re-evaluate the value they get and have got from their deal with their suzerain, and start to shop around?
    150 years of legal nullity, and their status in NZ continues to be a political football.

    As well as looking at Trump, Biden, Starmer and Johnson and the health of the Queen, they might think that Britain and its commonwealth are no longer able to bring the economic heft a more ascendant power might.

    New Zealand should perhaps ask the other way around- why should Maori still be happy with their half-baked, post-imperial government and Anglosphere? Why should it demand their loyalty as of right?

    Irrespective of the principles of the treaty which nobody seems to know or be interested in finding out, it doesn’t seem like there’s much good faith there. Perhaps that’s what we should be asking Seymour and those mad weirdos who pretended to be Maori to post threatening public notices. Why should Maori not look for a better deal?

    I mean China was in Vietnam a thousand years I believe. Colonial arrangements come and go with the tide. What makes us think NZ, such a young country, is immune to that?

  13. Mike the Lefty 13
    12 May 2022 at 6:22 am

    ACT is essentially a party of wealthy white yuppies, whose concern starts and finishes at how much money is in their wallets.

    You can't reasonably expect such people to have any regard for people who are disadvantaged and their goal is to make a government that is in effect a non-government that does not interfere with their one aim in life which is to make money.

  14. PsyclingLeft.Always 14
    12 May 2022 at 7:32 am

    David Seymour weaponised his Maori (Ngapuhi) descent (as have others of that ilk) …..as : Look I can criticise Maari's because I have skin in the game. (I bet he hid it during his career)

    https://en.wikipedia.org/wiki/David_Seymour_(New_Zealand_politician)#Early_life

    All act/neoliberals are shameful…but the twerkist especially.

    Willie Jackson called him well.

  15. Ad 15
    12 May 2022 at 8:17 am

    They are still good for 8-9% of the next Parliament.

    What I particularly dislike about them is behind their List Number 2 is a bunch of silly nobodies sucking up taxpayer cash doing nothing. That gets on my nerves.

    • KJT 15.1
      12 May 2022 at 8:41 am

      Ironic.

      The "taxation is theft" party, depending on taxes.

      In Seymours ideal world, someone as silly as the ACT MP's, would be living on cardboard boxes on the street.

      A “downside” of Socialism? We help total idiots to survive to adulthood, to claim it “doesn’t work”.

  16. SPC 16
    12 May 2022 at 10:06 am

    The silence of ACT on welfare spending/cost policy is deafening. It possibly indicates an agenda for this to be the post election coalition deal (after National distances itself from ACT policies more widely publicised).

  17. Drowsy M. Kram 17
    12 May 2022 at 6:15 pm

    "From my perspective … the bottom line is I’m interested in making sure that this Budget actually delivers for the squeezed middle, that’s what I’m focused on.”

    Very well making a play for "the squeezed middle", but what about the pinched 'bottom'?

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