Don Brash: Tax cuts would have fuelled growth

COMMENT

The 2004 Budget is, at its core, a belated series of bribes by the most cynical Government in New Zealand's history.

If there is any vision in this Budget, it is of a nation on welfare. Low- and middle-income families with children will get some relief, but what about all the other hard-working New Zealanders?

What about the young couples who are working hard and saving hard towards their first home, deferring having children so they can get the mortgage down?

What about the middle-aged couples who, having raised and educated their children, are trying to put something aside for their retirement?

What about the single person trying to get a small business off the ground?

This Budget has nothing for any of them. In a fundamental sense, it punishes the most hard-working and most responsible - precisely those citizens who are determined to stand on their own feet.

What is lacking is any semblance of a growth strategy, any attempt to close the income gap that has opened up between New Zealand and countries such as Australia.

The Government has given up on what it repeatedly claimed was its highest priority - faster growth.

National Party policy is to focus on tax cuts and income support for low- to middle-income working people, particularly families; to cut the corporate tax rate; and to gradually reduce the top personal income tax rate.

So, a National Government would have cut taxes across the board, sending a message to all working New Zealanders that effort will be rewarded in this country.

Tax credits are needed to support low-income earners and beneficiaries, but total reliance on them - as this Budget does - will eventually drag all of middle-income New Zealand into the welfare net.

Our immediate expenditure priorities would have been in education, retraining the long-term unemployed, and better policing of our communities.

Over time, as we regain control of government spending by eliminating the many low-quality programmes this Government has allowed to proliferate, we will continue to refund taxes to working people.

We would have cut the corporate tax rate to boost investment and growth.

The rest of the world is cutting corporate tax rates, leaving New Zealand behind and sending a message to investors to put their money elsewhere.

This Budget will encourage welfare dependency. National would have re-introduced work tests for welfare and time limits on the dole.

We will also reform the Resource Management Act. Planners face huge regulatory snarl-ups rightly blamed on the act. Its maze of consultation obligations is stalling important projects, and we now face a looming crisis in electricity generation and transport infrastructure.

National would build the Auckland transport corridor network over the next decade.

Getting the bulldozers started is a priority.

The Employment Relations Law Reform Bill now progressing through Parliament will be enormously damaging to employment prospects and wage growth. The Holidays Act has already destroyed numerous jobs. We will unwind the re-regulation of the labour market.

In short, National has a strategy to lift all incomes in New Zealand. Labour has a strategy only to redistribute.