United Future neither right, left - nor in between

While United Future's specialty is occupying the middle ground, the party's finance spokesman Gordon Copeland believes the "third way" doesn't always lie in the space between National and Labour.

One commentator had identified some of his party's economic policies as "almost to the right of National".

He believes National is being "a bit wimpish" in its stance on selling state-owned enterprises whereas United Future wants a 40 per cent share of just about all SOEs sold off with the Government retaining a 60 per cent stake. "Governments aren't good at running businesses," he says.

While he thinks people are "right to be suspicious about privatisation, given the debacles with Air New Zealand and New Zealand Rail", partial sell-offs make good sense.

"There is a place for bringing in private equity through mum-and-dad-type investors. We also want to build an ownership society. Our stock exchange is shrinking at the moment, there's fewer opportunities for investment."

The proceeds would be used to repay debt and for new capital investment, mainly in hospitals and universities. "This is just a really good policy that could drive economic growth forward."

United Future also believes its tax proposals will boost the economy. They include cutting the company tax rate to 30c, giving new businesses a two-year tax holiday, and paying businesses a 1 per cent commission on the net value of the GST they collect. Copeland says that will recognise companies are acting as Government agents in gathering the tax.

Another priority is tax breaks to help lift the private sector research and development spending to about 1.5 per cent of GDP.

Copeland says United Future wants to tackle the business compliance burden. "We would want to undertake an immediate review of all of those costs with a view to minimising them."

The party also supports the reintroduction of competition in workplace insurance.

Copeland's own hobby horse is New Zealand's "horrendous" debt. While Government debt is low, private-sector debt is enormous.

"Most New Zealanders have got no idea that when they go along to a bank and raise a huge mortgage to buy their house, that money's coming from offshore.

"We've got so many families maxed out on mortgages, credit cards and so on. That's not the road to prosperity."

United Future wants to introduce income splitting for families to reduce a couple's tax liability, make the first $3000 earned tax-free and raise other tax thresholds by $5000.

But Copeland feels tax relief needs to be accompanied by a strong message from the Government: "Take this opportunity to reduce your debt levels."

It also believes people need to be encouraged to save. "We support KiwiSaver but we want to go further, we also have a 'womb to the tomb' savings scheme.

"You have an account that goes right through a person's life that can make a good contribution to the cost of tertiary education, starting a business, buying a first home, and then goes on, right on through to retirement and finally pays your funeral costs."

Copeland says a similar scheme already operates in Britain, with its Child Trust Fund. "They really are seen to be an important stepping stone towards growth and prosperity."

Key policies

* Lower income tax rates

* Reduce company tax to 30c

* A two-year tax holiday for new businesses

* Review the Resource Management Act every two years

* Improve transport infrastructure, giving priority to roading

* Explore a common currency with Australia

* Review general grievance and dismissal procedures in the Employment Relations Act

* Allow competition with the ACC

* Incentives for an increase in private sector research expenditure to 1.5 per cent of GDP

* Oppose the carbon tax and push for withdrawal from the Kyoto protocol