Now that Amy Adams has been promoted to be National’s Finance Spokesperson, here are a few predictions based on recent history.
Dealing with Superannuation
By 2060, New Zealand will have 1.7 million superannuitants, or 27 per cent of the population. Every two workers will support one retiree.
Health and superannuation spending will rise to 18 per cent of GDP. As migration and labour force growth slows, so will economic growth and tax revenue.
The Government will be left with a massive fiscal hole. Net debt could hit $3 trillion.
Ardern and Robertson, like Key and English before them, have their heads in the sand.
Adams could make a big statement on the most pressing of our long-term issues by promising to raise the retirement age.
Prediction: National will retain its weak stance of raising the Superannuation age to 67 by 2040.
Actually cutting taxes (not just promising them)
Steven Joyce talked a big game and promised tax cuts, but never delivered. He then cried crocodile tears when Labour cancelled them.
The fact is that the Key/English regime was Labour-lite.
If Adams is serious about boosting our economy, she’ll give a cast iron assurance that National will cut taxes on return to power.
Prediction: Adams won’t return money to its rightful owners. She believes she knows best how to spend taxpayer money.
Reducing corporate welfare and company taxes
Adams should “Just Say No” to the predilection Simon Bridges developed for corporate welfare while he was Economic Development Minister.
National spent about $13 billion in corporate welfare during its time in office.
There is no public appetite for handouts for politically trendy firms except from politicians seeking photo-ops.
Here’s a radical suggestion: business owners at the coalface know how to invest their money better than politicians sitting in plush Beehive offices.
If Adams promised to cut corporate welfare, the corporate tax rate could be cut to 25%, boosting investment, wages and jobs.
Prediction: The Bridges/Jones corporate welfare gravy train will roll on.
Dealing with tobacco tax
Adams should promise to cancel the four, annual 10 per cent tobacco tax increases National put in place in 2016.
Tobacco taxes have not significantly reduced smoking rates.
Eric Crampton from the NZ Initiative has estimated the new taxes will take $178 million out of the pockets of the poorest New Zealanders.
Aside from punishing the poor, the taxes are also fuelling hundreds of violent dairy robberies.
Prediction: The Nats won’t back down, meaning the poor and dairy owners will continue to be punished.
Dealing with housing costs
Adams should promise a future National government will overhaul the Resource Management Act to boost housing supply and get costs under control.
In 2016, 29% of households spent more than 30% of their income on housing. Only 10% of households did in the late 1980s.
The Government now spends $1.14 billion on accommodation assistance. Arguably, most welfare spending, including welfare spending on the middle class, is due to inflated housing costs.
Prediction: Adams utterly failed to get RMA reform over the line while she was Environment Minister. She won’t deliver this time.
Growing the economy to catch Australia
New Zealand’s economic underperformance relative to Australia is largely a problem of our poor productivity.
Adams should welcome foreign direct investment, which boosts jobs, wages, and growth.
She should promise to cut red tape, allowing firms to get on with their core business.
Adams should also promise to cut taxes across the board, creating incentives for New Zealanders to save, work and invest.
Prediction: National’s commitment to higher taxes, spending, and suffocating regulation will remain.