‘Tax and spend’ has been an unmitigated failure


Today is ‘Tax Freedom Day’. The year is already 35 percent complete and New Zealanders have only just paid their collective tax bill.


“The narrative leading up to Budget 2018 has been that we need to raise more money in taxes in order fund our public services – the narrative is wrong”, says ACT Leader David Seymour.


“The Government could choose to cut billions in wasteful spending before it decides to hit us with higher taxes.


“The problem is that higher taxes on working, saving, and investing mean people do less of those activities, leaving us all poorer.


“We could pay less tax if the Government wasn’t trying to buy votes.


“The $3 billion Provincial Growth Fund provides great photo opportunities for politicians but will deliver projects of dubious value.


“There’s no good reason for a government to fund a tourist attraction in the Hokianga or a nursery in the Bay of Plenty.


“Government spends billions on handouts for businesses which include subsidies for film companies or payments for irrigation projects.


“These ventures should stand on their own feet.


“The $3 billion ‘fees-free’ policy will simply pay for the education of kids who would have studied anyway, and who will earn much more over their working lives than non-graduates.


“Barely any additional students have enrolled as a result.


“The $11 billion (and rising) price tag for pensions is unsustainable.


“If Grant Robertson was sensible, he would gradually raise the age of eligibility to reflect the fact we are living and working longer. He could also means test superannuation so millionaire couples don’t receive it.


“The problem is that politicians make promises to get elected and taxes grow to fund them.


“Income tax was introduced in 1891 at 5 percent on only the highest incomes. Now it’s 10.5 percent on the lowest incomes and 33 percent on the highest.


“In the early 1900s, government spending was a one tenth of the economy. Now, it’s a third.


“But we seem to have as much poverty and neglect as ever.


“The only reasonable conclusion is that the ‘tax and spend’ approach to solving problems has been an unmitigated failure”, says Mr Seymour.