ACT’s radical plan to slash the state
ACT leader David Seymour is promising to radically change the way New Zealand is governed, with a programme of spending cuts and tax cuts that would reduce the size of government.
In Seymour’s alternative budget, he plots a drastic debt reduction path, aiming slash borrowing by $76 billion over the next decade. That would be enough to have net core Crown debt down to 37 per cent of GDP by 2030. The current Government’s debt track sees borrowing hit 53 per cent the same year.
‘‘Every other political party is in a race to spend more money. But every extra dollar government borrows today means higher taxes or fewer services for our kids and grandkids,’’ Seymour said.
KiwiSaver subsidies, the Fees Free study policy, the Winter Energy Payment, the Best Start baby payment, Callaghan Innovation grants, R&D tax credits, R&D growth grants, the Provincial Growth Fund, racing subsidies, the One Billion Trees programme and film subsidies would all be headed for the scrap heap, at a saving of tens of billions of dollars each year.
ACT would also end contributions to the NZ Super Fund, saving billions. Senior leaders in the public service would have their pay cut by 20 per cent, and the public service would have to reduce the money it spends on staffing. Benefits, Working for Families and parts of the Families Package would also be trimmed. That adds up to $11.09b less spending in Seymour’s first budget, $15.35b less in his second and $20.59b less in his third. That would be a massive change in the size of the state. Currently, core government spending is roughly $80b-$90b in normal times – although it is higher now, due to the cost of Covid-19. ACT’s two big tax cuts would reduce the amount of revenue coming into Treasury by $9.6b in the first year and just over $3b each year from that.