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National | ACT Party

ACT would dump Te Puni Kōkiri and ‘kill’ inflation if it were government

Abolishing Te Puni Kōkiri/the Ministry of Māori Development and the Human Rights Commission including the Race Relations Commissioner role are among many radical cuts ACT is proposing in its alternative government budget.

But the party would offer sweeteners for low to mid-income earners with big tax cuts. The five tax rates would be changed to just two: 17.5% for income up to $70,000 and 28% for income over $70,000.

Labour’s Finance Minister Grant Robertson will deliver the government’s budget on May 19.

Act says if it were government and slashed government spending, it could get the country back into surplus next year and “kill” inflation.

But Act’s budget is hypothetical and likely its opening bid in negotiations with National should a National/Act coalition be possible after next year’s election.

Superannuation up to 67?

Although National has rapidly improved its poll rating since Christopher Luxon was elected leader, Act’s has fallen and that has meant that, so far, the ‘kingmaker’ Māori Party is likely to decide whether to support a Labour/Greens or National/Act coalition.

The Māori Party has argued both National and Act have been racist at times but is holding its fire on coalition choices until what is being offered is clear.

In its budget, ACT would slowly move the superannuation age to 67, introduce a $250 million fund to allow schools to give bonuses to high-performing teachers, share GST with councils that let houses get built and dump Labour’s tax changes aimed at stopping speculative housing investment.

And another sweetener comes in its plan to return funds collected from the emissions trading scheme to all New Zealanders as an annual dividend, which Act says could be $250 a year in the next four years.

It would dump Te Puni Kokiri/Ministry of Maori Development, Callaghan Innovation, Women’s Affairs, and the Human Rights and Climate Change Commissions.

But it proposes a large defence spending to be equal to Australia’s at 2% of gross domestic product, in response to a more uncertain global environment.

Increased defence spending

The party also advocates the sale of 49% of remaining government assets, including Transpower. Act would sell down KiwiRail, NZ Post and Kiwibank and its subsidiaries.

It would also sell Pāmu/Landcorp, the government-owned farming business, although in chunks and would use the proceeds to fund conservation on private land.

Meanwhile, Finance Minister Grant Robertson has said his budget would include a debt ceiling on government spending.

The debt ceiling would kick in once a surplus was reached and would require surpluses between zero and 2 per cent of GDP.

He said there would be a Climate Emergency Response fund with money gathered via the emissions trading scheme.

There would also be money for the already announced health reforms and district health boards would no longer be allowed to run up deficits each year.

A surplus was not expected to be reached for another three years.

Robertson was keen to emphasise New Zealand's economy had come through the pandemic better than almost anywhere else, receiving two triple-A credit ratings from the two leading agencies.

Robertson said debt would peak at half of Australia's, a third of the UK's and a fifth of the United States' debt.