Sunday, October 19, 2008

ACT - no tax cuts for two years?

ACT's launched its campaign, it's clearly aiming for the disenchanted National supporters who want more than Labour lite. With Sir Roger Douglas at number three on the list it definitely tempts those who want less government to give Roger a second go, if only to give National the coalition partner it ought to have, instead of the Maori Party or Peter Dunne.

Rodney Hide's interview with the NZ Herald certainly seems promising. For the first time in ages I have seen an ACT leader prepared to be honest about health:

"I believe that the state health system has been a failure and that what it does is take our money and then ration health care by queuing us up in pain and agony. "


"I much prefer that we use the private system and focus the Government's attention on ensuring that everyone has access."

Sounds a lot like Unfinished Business, and is half of the libertarian solution. It is one I can see being a big leap forward for healthcare. So what else is new? Well it's all in this policy PDF.

Well ACT wants to keep growth in government spending capped to inflation, EXCEPT for law and order and a one off injection into health spending. Hardly ambitious, something National ought to embrace if we were lucky. This means government growing slower than GDP. Oh how far we have slipped back when this is seen as radical.

39% top tax rate would be gone immediately, again good, but National voted against this tax rate and isn't promising to abolish it.

Then two years of NO tax cuts. Yes ACT offers you nothing till 2011. Presumably it's about fiscal prudence, because after then there is a rolling programme of cuts to a flat rate of 15% by 2018 (12.5% on the first NZ$20,000). Yes 10 years from now! Yes better than nothing, but this ought to be mainstream. National supporters should be embracing this.

GST down to 10% as well, in the same timeframe. Hmmm, public servants really have nothing to fear.

However there is one gem in ACT's policy, but not one I expect the mainstream media to publicise widely.

It is offering a taxfree threshold of NZ$25,000 for those who want to opt out of ACC, the right to claim sickness benefits and state healthcare. It talks of offering a top up for such people to cover their children too for all of that, and education.

So, a chance to opt out of nanny state. THAT is revolutionary, but in parallel with two years of no tax cuts, it is hidden in the mix.

This is what National should be offering, at the very least slower growth in government spending, progressively lower tax cuts to a low flat level, and the chance to opt out of state provided health cover. However ACT should be offering more. ACT offered a flat tax in 1996. It should be pushing for tax cuts every year. It should be calling for serious cuts in spending.

I did think that there was much promise with Rodney Hide, and with Roger Douglas back on board, and yes, ACT shows National what a change in direction could be.

However, it remains profoundly disappointing. I do not see the point in voting for no tax cuts for two years, besides abolishing the 39% top rate.


Elijah Lineberry said...

15% flat tax rate in 10 years...ha ha..that really is pathetic, isn't it?

It is so disappointing the Libz are not fielding a candidate in Epsom to get stuck into this ACT nonsense.

Anonymous said...

Sadly people need to be weaned off socialism after a lifetime habit. If you can't sell ACT's ideas to the masses then you have no show with Libz ideas. There is a reason why there is no Libz candidate for Epsom and why, even if there were, they wouldn't stand a chance. Voters have been indoctrinated against our ideas. They need to be shown otherwise.

While no tax cuts for two years might seem grim it has to be seen in the context of increases to 15% GST and 45% top rate of tax that are being talked about today. Things are that bad. So unless you want to take a chance on getting a "present" in Helen's Christmas minibudget I would seriously consider not wasting your vote in the election.

Libertyscott said...

ACT is selling LESS tax cuts than National in the next two years. You have to ask seriously, why should anyone vote ACT for a term when it wont be fighting for more tax cuts, beyond dropping the 39% rate.

I'm glad ACT is there, had it argued to flatten taxes far more aggressively it could have been very tempting.

ACT is what National should be, and once was - Good luck with ACT attracting votes, but I am sick of disappointment.

Madeleine said...

I think ACT's position, and to some degree National's, stem from the need to balance philosophy with pragmatism.

Our country is so far to the left that stating what they would like to do would be a vote killer. They have to start at a point of palatability and then move slowly in the right direction.

Really sad.