Elocal May 2019
Government Policies are slowing our economy down
The New Zealand Parliament has led New Zealand in grieving following the terrible Christchurch terrorist attacks and we have joined together to change the law to ban the ownership of semi-automatic military style weapons and other enabling equipment and we have enacted an amnesty and a compensation scheme for weapons that are surrendered.
But now we must get back to the business of “normal” government and activities that are required to properly manage and administer the business of our country. None of the issues have gone away, we still have the rising costs of employment, the rising costs of Kiwibuild and traffic congestion.
Other anti-growth policies adopted by this Government include a fees-free policy that fails to deliver any additional students; an ideologically driven ban on oil and gas exploration that fails to reduce emissions but devastates the Taranaki economy; a regional slush fund with no real accountability; higher fuel taxes, restrictions on foreign investment and introducing union-friendly labour reforms.
As a member of the Opposition it remains my job to support my colleagues as we keep this Labour-led coalition on its toes and accountable for its policies and decisions.
Fewer jobs and opportunities are on the horizon, and Kiwis will be hit harder as the slowdown in the economy faces New Zealand.
Labour inherited an economy growing three to four per cent, but the Government has squandered that momentum with bad policies, more taxes and wasteful spending.
Any contribution to the rising cost of doing business is especially concerning for small to medium businesses which are 97 per cent of all businesses in New Zealand. They are having to cope with the cost of minimum wage increases and the cost of new domestic violence leave regulations, and a government that does not appear to recognise the importance of small businesses.
These businesses create employment, and they give entry level workers opportunities to gain skills and advance to higher paid work. They are operating in an environment that makes it difficult for them to raise prices to cover the many costs of doing business.
Often small business owners are supporting their employees but only reap real rewards from their businesses when they sell them and that is after a long period of sustained hard work while a business gets established.
So we are thrilled that the pressure applied by National has forced the Government to scrap any thoughts of a Capital Gains Tax. It is a pity it took them 18 months and $2million to work this out!
In fact, tax officials advised the Government 15 months ago that our small companies, start-ups and innovators were better off without a Capital Gains Tax. In December 2017, Inland Revenue officials told the Government that the absence of a Capital Gains Tax in New Zealand was beneficial to start-ups.
Keeping the barriers to innovation low, and making it as easy as possible for Kiwis to start a business, create jobs, and build industries are the pillars of growth which the government should continue to support. People who take risks with smart ideas and build something bigger than themselves shouldn’t be discouraged.
Then we have Kiwibuild that is helping very few people into affordable homes despite promising so much. In the first year 1000 homes were going to be built. It became obvious last year that this would not happen and we saw that target moved to July 2019.
At the beginning of this year, the Prime Minister had to step in and decide that all interim targets would be scrapped and only the target of 100,000 houses in 10 years would remain.
To make up the shortfall of KiwiBuild houses available the Minister Phil Twyford has been buying completed houses from developers and saying that people can buy these off the plans although they are already built. In some cases they are more expensive by $10,000 to $20,000 than the same or larger houses built by the developer and for sale on the open market in the same area.
The Crown underwrite of these signed off by the Labour New Zealand First Cabinet in August 2018 means taxpayers will foot the bill for any losses incurred by private developers over unsold Kiwibuild houses.
Our largest tourism operators, Air New Zealand and Tourism Holdings say there is a drop in tourist numbers leading to a lowering of first half profits and a lower profit for the full year.
The Government’s $6billion light rail for Auckland election promise is making slow progress as the project is very complex and the business case for it, due in December 2018, is still unfinished.
Auckland Councillors are nervous about what they can expect. Installing light rail will have a big impact on Aucklanders and cause considerable disruption while it is built.
It is obvious to many that there is a global slowdown occurring particularly in China and this will affect New Zealand’s economic outlook.
A weaker economy means less money in the back pockets of New Zealanders and less money for core services like health and education. Yet Labour’s solution is to impose even more taxes.
Westpac’s employment confidence survey shows workers are less confident, while ANZ’s business confidence survey has dropped to a net negative 38 per cent expecting the economy to deteriorate. Businesses have become gloomier about the economy and their own prospects, according to the latest NZIER’s quarterly survey and the Reserve Bank now says it may cut interest rates to support an economy that is slowing considerably under this Government.
It’s time for the Government to focus on policies that help New Zealand to prosper instead of discouraging enterprise and putting roadblocks in the way of our innovators and entrepreneurs.
National has a proven track record as competent managers of the economy. We believe Kiwis should keep more of what they earn and that Government has a responsibility to spend tax dollars carefully and in a way that delivers results.
Best wishes to all,