Shane Te Pou: Election 2023: Act’s budget has the cuts National needs to pay for its tax package

Act wants to cut back on the winter energy payment, KiwiSaver and the NZ Super Fund as part of its alternative budget.

Opinion

OPINION

No one, not even National, seriously believes their tax plan adds up. Which raises the question: what would they really cut if they were elected?

Just this week, it’s been revealed they’re half a billion a year short on their foreign buyers’ tax (if it’s legal at all given our international agreements), that there’s less in the climate kitty they plan to raid than they thought, and their public service cuts could include workers from the court system, Serious Fraud Office and biosecurity.

The thing’s got more holes in it than the All Blacks’ defence against France.

And rather than addressing these serious issues seriously, National’s response boils down to “trust me”.

That’s weird. When National got their numbers wrong in 2020, they scrambled to fix them. Labour prides itself on getting its costings right. National in 2023 doesn’t care. They just refuse to acknowledge the reality that their plan is about as reliable as a papier-mache umbrella.

I was talking about this with a mate. I put it down to ignorance from Chris Luxon and arrogance from Nicola Willis. He set me right - “Nah, it’s a distraction . . . while everyone’s focused on this, they’re not talking about the real plan. Look at Act.”

He was right. Act’s alternative budget has all the cuts National needs to pay for its tax package, and more.

They want to cut superannuation increases and raise the age of eligibility immediately.

Their plan also includes abolishing fees-free, help for first home buyers, and R&D tax credits, as well as cutting back on the winter energy payment, KiwiSaver and the NZ Super Fund.

National has said they would keep a lot of these things unchanged but, hey, after the election if they’re negotiating a deal with Act, and they’ve got all those fiscal holes to fill, those cuts would be back on the table.

Prefu confirmed that the next government won’t have much money to play with. Every major decision will face trade-offs.

Labour has gone for a set of cost-of-living promises it can fund mostly from the money available.

The Greens and Te Pāti Māori have gone for big promises funded by a wealth tax.

National and Act have promised enormous tax cuts for landlords and the well-off. And they’ll need deep cuts to your entitlements and the programmes you rely on to pay for them.

Chris Luxon is now refusing to commit to increases for health and education to keep up with inflation. And we all know that means a cut in real life.

The more you look at it, you have to wonder why National has locked themselves into promising such a large tax package in the first place. Is now the time to be promising billions in cuts for landlords and the well-off, especially when it would need big cuts to the programmes and public services people need?

When asked about it by Mike Hosking this week, Luxon said there was no Plan B. They’re going ahead with their tax cuts, even though their plans to pay for them don’t stack up.

Or maybe that’s the point. If National can create a multibillion-dollar hole in the Government’s finances through its tax cuts, it can use that as an excuse for cuts.

And Act’s conveniently already put together the list of what to cut.

As this election campaign continues, we would be smart to take a closer look at Act’s plan for cuts. Because, if the polls are showing us a clear prediction, then we could soon be facing a government that delivers National’s tax cuts and Act’s public service cuts.

Shane Te Pou (Ngāi Tūhoe) is a commentator, blogger and former Labour Party activist.