Category: ACT Party

Source: ACT Party

This afternoon, the Reserve Bank made another cut to the Official Cash Rate, from 5.25% down to 4.75%. ACT Leader David Seymour responds:

“Today’s rate cut is great news. Lower interest rates mean real relief for Kiwis with mortgages, also relieving pressure on rents, and freeing up spending cash to quench thirsty local businesses.

“However, on the Reserve Bank’s part, a 50 basis-point cut is a multi-billion dollar mea culpa, and the latest twist of a nauseating three-year fiscal and monetary roller coaster.

“Today’s cut bookends a series of excesses. The too-easy money of COVID times spiked house prices and inflation. Then, interest rates shot up, house prices crashed back down. Today, Kiwis are finally getting off a three-year fiscal and monetary rollercoaster, feeling nauseous for their troubles.

“Kiwis have done the responsible thing. Interest rates were also driven up by Labour’s COVID spending blowout. Households responded by making spending sacrifices – and changing the Government.

“Our efforts are paying off. Together, our prudent spending has seen inflation ease back and given the Reserve Bank room to cut interest rates. If we stay the course, we should expect further relief in the coming months.

“However, interest rates are still painfully high compared with pre-COVID times. ACT is determined to speed the path back to lower rates, lower living costs, and real economic growth.

“We must build on our progress in cutting the waste and red tape from Wellington. That is how we honour the efforts of households working to secure a prosperous future for themselves.”

Source: ACT Party

The Haps

Devastation in Dunedin and the loss of HMNZS Manawanui are hurting New Zealanders in different ways. They also underline what Free Press argued last week, that the Government needs to think hard about its capital assets. It holds over half a trillion in assets, but does it own the right things, do core infrastructure and defence need more commitment? Meanwhile we’ve received voluminous praise for David Seymour’s performance Q+A with Jack Tame last week.

Capital Gains Tax… Again

ANZ CEO Antonia Watson revived the unending debate about a capital gains tax for New Zealand. Free Press welcomes business leaders talking about public policy. We’d all benefit if they did it more. Too often we hear business leaders say things privately that we wish they’d say publicly but they’re usually too afraid of criticism.

We just don’t agree with Watson about the capital gains tax. It always seems to be a band-aid for concerns about housing, but it won’t fix that, and what New Zealanders really need is more capital. This week, once more with feeling, Free Press goes through the usual arguments for a capital gains tax and sets out why they’re wrong.

Perhaps the worst argument for a capital gains tax is ‘everyone else has one.’ Practically every other Government imposes a capital gains tax on its citizens, except the Swiss Federal Government. Being like Switzerland can’t be the worst thing for the New Zealand economy.

Even if ours was the only Government not levying a capital gains tax on its citizens, the argument still doesn’t work. Governments do silly things all over the world, and we don’t need to copy every one of them.

Others say the Government needs the money. We’d argue that it needs to spend better, and it is improving, but there is better evidence the Government doesn’t need more money, at least not from a capital gains tax.

The New Zealand Government is the second biggest taxer in the Asia Pacific region (behind Japan) with total revenues of 33.8 per cent of GDP. Every Asia-Pacific Government has a Capital Gains Tax. It’s difficult to argue a Government raising more revenue than dozens of Governments with capital gains taxes needs a capital gains tax for lack of money.

Then there’s the fairness argument. People who make money from capital should pay tax like people who work for their money. Sounds fair, but the reality is capital gains are already caught by income tax.

Anyone who buys a farm, a business, or a property is really buying a stream of income in the future. That income is taxed. A company with future income worth $10 million before tax is not worth $10 million though. It is only worth the after-tax income. You’ll be lucky to get $7 million. You’ll already lose $3 million-odd, that’s the tax that whoever buys it will pay.

Putting a tax on the price of the asset each time it’s sold is just nasty. The argument with housing is that house prices go up regardless of how much rental income they produce.

People even claim a capital gains tax would make housing more affordable. Any realistic capital gains tax would apply to all businesses, but only to houses you don’t live in. Nobody who wants a capital gains tax wants one ‘on the family home.’ On balance it would be more of a tax on businesses than on houses, so much for shifting investment away from housing.

Maybe it would at least stop ‘speculators’ from pushing up house prices by buying ‘more houses than they need to live in’? Unlikely when the new tax has gone on every other kind of investment, too.

Just like L.A., London, Sydney, Hong Kong, and Vancouver have all had outrageous house prices with a capital gains tax, a capital gains tax won’t make housing affordable in Auckland. Prices are set by supply and demand, and so long as supply doesn’t keep up with demand, prices will rise.

A capital gains tax really just makes the Government a silent partner in property investment, it doesn’t change the underlying fundamentals of the housing market. It certainly doesn’t comfort a first home buyer to know that the Government took a share of their eye-watering purchase price.

We hope these arguments are helpful for repelling demands for a capital gains tax. They’re technical though. The real question is whether the goal is to grow the pie, or divide the pie?

If you think New Zealand can’t get any richer, and it’s just a matter of pulling the ‘rich’ down a peg or two and dividing up the wealth, maybe it’s time to talk about a new tax. On the other hand, maybe it’s time to shelve the distraction, acknowledge our lack of a CGT is a strength, and get back to making New Zealand wealthier overall.

Not Subscribed? Sign up >here<

Source: ACT Party

The following is a statement from ACT MP Simon Court.

Today we mark one year since the massacre of Israelis on October 7, 2023. ACT joins the families of those killed, including members of the Jewish community in New Zealand, in a moment of grief for the innocent lives lost.

October 7 was not a legitimate act of war, but an act of terrorism targeting peaceful civilians. Peaceful people have the right to live free from fear and violence, and everyone has the right to call a part of the world home.

New Zealand must stand with Israel, demand the release of the hostages, and condemn those who use their people as human shields for their medieval behaviours and beliefs.

Hamas in Gaza, their allies Hezbollah in Lebanon and others in Yemen, Syria, and Iraq have fired thousands of rockets and drones toward Israel in the past year. These terror organisations are supported and funded by the Islamic Republic of Iran through their vicious fundamentalist Iranian Revolutionary Guards Corp which has also fired hundreds of rockets and drones at Israel.

As Israel seeks to defend the rights of its citizens with military action, there has understandably been intense international scrutiny and grief over loss of life. However, we must remember what is at stake for Israel’s people. To deny Israel the right to defend itself would be to support a campaign of extermination against Jewish people in the Middle East.

In New Zealand we have seen activists and politicians make excuses for the atrocities of October 7. We have seen a Green Party MP promote a ‘glory to the martyrs’ event marking today’s anniversary. Jewish New Zealanders fear for their place in a society that mainstreams a propaganda campaign with the end goal of the destruction of Israel.

As the sun rises in Tel Aviv, ACT calls on all parties to condemn terrorism and share in the mourning with Jewish communities in New Zealand, Israel, and around the world on this day.

Source: ACT Party

Responding to Google’s claim that it will stop linking to New Zealand news sites if the Fair Digital News Bargaining Bill passes, ACT Leader David Seymour says:

“The Government is now playing chicken with Google, and New Zealanders stand to lose. ACT has always said this Labour Government Bill wouldn’t work, that’s why we agreed to disagree with our partners on it. We renew our call on National and New Zealand First to dump the Fair News Digital Bargaining Bill.

“If Google make good on their threat, New Zealand audiences and media companies will be worse off. Smaller media outlets in particular would suffer as they would be denied the opportunity to connect with new audiences via search results.

“It is not any government’s job to protect businesses from customers making different choices. The internet has made it easier than ever to report news, and certain outlets need to stop blaming the internet and start looking at their product.

“It is not accurate to describe the bill as any kind of ‘bargaining’. Instead, politicians would decide who gets what. This undermines the separation between government and media which is fundamental to democracy.”

Source: ACT Party

Responding to Iran’s missile attack on Israel, ACT MP Simon Court says:

“Israel is under fire from three directions. The precarious position of Jewish people in the Middle East should have been clear before Hamas invaded Israel and massacred its civilians. Then Hezbollah started firing rockets at Israel, and today Iran has joined in with ballistic missiles.

“It should now be obvious that the last 12 months of attacks on Israel were always an Iranian proxy war to drive Jewish people out of the Middle East.

“Far too many New Zealanders have naively supported this proxy war by participating in Iran’s international propaganda campaign. Demonising the people of Israel has softened up the international community for an all-out assault on the only functional democracy in the Middle East.

“Iran and its allies are actively hostile to our values of democracy, freedom, and religious tolerance. Their goal is not justice, it is extermination. It is time for New Zealand politicians and activists to put down the keffiyeh scarves, condemn Iran and its proxies, and start doing right by Jewish people who deserve a place to call home.”

Source: ACT Party

The Haps

Yet again half of the Government’s quarterly plan comes from ACT. If you gave ACT your party vote you are getting great value. If not, there is always next time.

Charter schools are back, in law. The legislation to make charters legal passed last week, while the Government has provided a serious school attendance strategy with actions and obligations for schools, parents, students and government departments.

We have received widespread praise of David Seymour’s performance taming Jack Tame on Q+A on Sunday.

The Mystery of Capital

This week Free Press dives into a neglected area that’s at the centre of the country’s political problems. It’s not the money raised and spent this year, but managing capital that’s the problem.

Most of the political attention on Government finance may be misplaced, being on annual expenses instead of long-term capital. Dunedin Hospital, military planes and ships, new ferries, new medical schools, roads, classrooms and water treatment plants for new subdivisions… They’re all capital investments that the Government could make, but it’s already got nearly $180 billion in debt.

Operating expenditure gets the attention, because the Public Finance Act was set up to stop governments running deficits. The headline is nearly always whether the government takes in more than it pays out this year, or OBEGAL. There’s some sense in that, but look what’s been happening with capital.

Next year government debt is forecast to hit $178 billion, and it will pay over $8 billion in interest. Ratings agencies can raise a government’s interest rates at the stroke of a pen if they downgrade its credit rating, and some have been murmuring about New Zealand’s rating in the last year.

Every year the government taxes less than it spends, the debt grows. In fact, even if it runs a surplus the debt can still grow if the surplus doesn’t cover the interest. Debt is scheduled to keep growing until 2031, peaking at $215 billion.

Obviously it would be good to pay it down faster, but there’s no scenario where the government doesn’t have major debt for the foreseeable future. So, how hard is the debt working for the taxpayers who are staking it?

It’s a good time for the government to do a capital review. For each thing that it owns, a taxpayer is entitled to ask, what does this do? Also, does it need to be done? Could or would someone else do it if the government didn’t do it? Is this asset helping economic growth, so the government can earn more in the future?

Once you start asking these questions, you get to some interesting places. Why does the Government own three competing power companies, a TV station, and a radio station? They’re all things that someone else could do, and many others actually do. They’re not making great returns for the Government, so it’s not really obvious at all.

The Government owns about 60,000 houses. Is that a good use of capital? If they’re worth half a million dollars each, that’s $30 billion. Imagine spending $30 billion on infrastructure that nobody else will build, opening up land so more homes could be built.

What about schools? Oh no, you say. Free Press has gone completely nuts this time. But wait, the last Government effectively privatised many school properties by giving them to iwi as Treaty settlements and leasing them back. It was privatisation that didn’t actually get any cash back.

The same goes for new spending. There is a perfectly good ferry business operating on Cook Strait, without a cent of taxpayer money. Since that proves others can do it, does the Government need to lose even more money trying to operate its own?

New Zealand spends 0.9 per cent of GDP on defence, our only ally spends 2.0, and they’re increasing it. Is that sustainable? Can anyone but the government run a Defence Force? Defence is one area where the government needs more capital.

We could go on, but you get the picture. The Government holds massive debt and yet it’s not really obvious what we’re getting for it. It’s certainly not obvious what we got for the $100 billion in extra debt Grant Robertson took on.

Sooner or later the Government will have to have an honest conversation about its debt, and do a capital review. If it can’t be paid off any time soon, can we at least make sure the government only owns things that do what needs to be done, that nobody else could do, and ideally that deliver a return for future generations?

Source: ACT Party

ACT is backing action by Gore farmers against a Council proposal to designate the entire territory a Site and Area of Significance to Māori.

ACT Rural Communities spokesperson Mark Cameron says:

“As glorious and historic as Gore may be, it’s just not credible to say the entire district is a culturally sensitive site. The Council’s proposal looks more like a land grab.

“The Treaty of Waitangi settlement process already allows for restoration of land use rights to claimants. There is no need for any council to get ahead of this process by locking up the productive potential of vast swathes of land.

“Section 6 of the Resource Management Act has given local bureaucrats broad powers to run roughshod over property rights. The good news is the Government is in the process of amending, repealing, and replacing the RMA. With ACT in Government, Andrew Hoggard and Simon Court are putting property rights at the centre of new resource management rules.

“This begs the question, why is Gore District Council proposing such a massive change that is likely to be made untenable by new legislation? It’s not just a land grab, it’s a waste of time, money, and attention.”

Source: ACT Party

“ACT’s contribution to the Coalition Government’s fourth quarterly plan shows how we’re driving the real change Kiwis voted for,” says ACT Leader David Seymour.

“The document is a clear demonstration of how ACT in Government makes New Zealanders’ lives better. We’re unleashing builders and growers by cutting red tape, empowering families with choice in education, delivering consequences for crime, and more.

“For the fourth plan in a row, ACT voters have made a disproportionate impact – more than half of the plan’s action points reflect our contribution.

“Every day in Government, we’re taking great ideas and turning them into action to secure a freer, more prosperous future for New Zealanders.”

Of the 43 actions listed, 22 are led by ACT ministers, advance ACT coalition commitments, or reflect ACT policies. These actions include:

• Pass the first Resource Management Amendment Bill to reduce the regulatory burden on farmers and the primary sector.
  – ACT coalition commitment
• Introduce the government’s second RMA reform Bill to Parliament to cut red tape holding back growth in the infrastructure, energy, housing, and farming sectors.
  – ACT coalition commitment
• Establish the National Infrastructure Agency.
  – ACT policy
• Take Cabinet decisions on funding and financing tools to get more housing built.
  – ACT coalition commitment
• Introduce legislation to make it easier to build offshore wind farms.
  – ACT policy
• Take Cabinet decisions on allowing greater use of road tolling to support the delivery of transport infrastructure.
  – ACT coalition commitment
• Finalise the development of farm-level emissions measurement methodology.
  – ACT coalition commitment
• Pass legislation to complete the removal of agriculture from the Emissions Trading Scheme.
  – ACT coalition commitment
• Take Cabinet decisions to streamline regulations around food safety export exemptions.
  – ACT Minister
• Pass legislation to reverse the ban on oil and gas exploration.
  – ACT coalition commitment
• Take Cabinet decisions on the form of the Regulatory Standards Bill.
  – ACT Minister & coalition commitment
• Initiate a third regulatory sector review to identify and remove unnecessary red tape.
  – ACT Minister & coalition commitment
• Pass legislation extending deadlines for earthquake prone buildings to enable a review of the current settings.
  – ACT policy
• Pass legislation to allow lotteries for non-commercial purposes to operate online, cutting red tape to make fundraising more effective.
  – ACT Minister
• Take final design decisions for an online casino gambling regulator.
  – ACT Minister
• Introduce legislation to remove the GE ban and enable the safe use of gene technology in agriculture, health science and other sectors.
  – ACT coalition commitment
• Introduce legislation to enable stronger consequences for serious youth offending.
  – ACT Minister
• Publish the second action plan on family and sexual violence.
  – ACT Minister
• Begin delivery of new cancer treatments.
  – ACT Minister (through Pharmac)
• Commence a review of the funding formula for independent schools.
  – ACT coalition commitment & ACT Minister
• Negotiate contracts with, and announce, the first charter schools.
  – ACT coalition commitment & ACT Minister
• Introduce legislation to expand the Traffic Light System to include additional consequences for beneficiaries who do not meet their obligations.
  – ACT coalition commitment

Source: ACT Party

Labour’s Associate Foreign Affairs spokesperson Damien O’Connor has reposted a claim that “Palestinians have every right to do whatever they did on October 7^th”.

Responding to this, ACT MP Simon Court says:

“Here we have a Labour Party Foreign Affairs spokesperson justifying the largest Jewish pogrom since the holocaust. There is no way Chris Hipkins can let this extreme and hateful statement stand.

“What Hamas-led Palestinians did on October 7 was a massacre of civilians. Every peaceful person deserves dignity and respect, and that includes Jewish families living in Israel, and their family members in New Zealand.

“Chris Hipkins needs to do the right thing and tell Damien O’Connor to retract his post and apologise, or stand down as Associate Foreign Affairs spokesperson.”

In case the post on X is deleted, a screenshot can be found here.

Source: ACT Party

“Fresh off the shock $30,000 per square metre Dunedin Hospital cost, it is clear the Government is absolutely right to look at building costs, in fact it must go harder,” says ACT Housing, Building, and Construction spokesman Cameron Luxton.

“Families struggling to find a place to call home desperately need more houses, built faster, at a price that makes sense. Stats NZ data shows the cost of building a house has increased by 41 per cent since 2019. That is seriously alarming.

“ACT’s Coalition Agreement says the Government should ‘explore allowing home builders to opt out of needing a building consent provided they have long-term insurance for the building work.’ That is the basis for ambitious reform to get building costs down for Government and private projects alike.

“The proposals put up today are fantastic, it is not sensible for a country of 5.3 million people to have 67 Territorial Authorities each effectively running 67 local monopolies on consenting. Any option that consolidates them while introducing competition for inspection services is a good one.

“However, it is also true that the underlying issues of joint and several liability, that makes the Council the ‘last man standing’ when things go wrong needs to be fixed. We are the only country mad enough to apply joint and several liability, and it gets us the worst of all worlds: leaky buildings and sky high prices.

“The best option is to let builders opt out altogether with private insurance for new builds. That would get councils out of the way completely, for faster, more innovative, and ultimately more reliable building consents.”