Saturday, May 19, 2018

My Alternative Budget

This past week was Budget Week, when the New Zealand Minister of Finance, Grant Robertson, delivered his first full budget for the new government. It contains billions of dollars in new spending on health, education, welfare and housing, while at the same time maintaining some sanity in terms of containing borrowing and the growth of government spending as a percentage of GDP. Much of the criticism has come from Robertson's side of the political divide, with most saying it did not deliver enough new spending and criticising him for staying with the Budget Responsibility Rules. One so-called journalist dismissed it as 'a triumph of neoliberalism'. The opposition National Party seemed only to join in the dissent of their political opponents with National Party leader Simon Bridges saying Robertson wasn't spending enough.

Given the weaselly lack of opposition and any alternative from the National Party, I thought I would post my alternative budget, which is designed to restore our standard of living to the top echelon of OECD nations. This would be the first step in an ongoing programme of reducing taxation and government spending.


Taxation would be 20/20/20/20/12.5, in other words:
  • 20% flat rate on salary and wages with the first $20,000 tax free
  • 20% on company and trust profits
  • GST reduced to 12.5% to offset any regressive effects of the flat rate income tax.
The various initiatives of recent governments that use the tax system as a secondary welfare system, such as Working for Families Tax Credits, would be abolished.

All other excise taxes and duties such as those on petroleum products, alcohol and tobacco would be abolished.

Health, Education and Welfare

Health, education and welfare spending would be capped in absolute terms and gradually reduced by prioritising essential areas of expenditure over the non-essential, e.g. emergency and non-elective surgery over elective. Education would move to a voucher system and all schools would become charter schools, setting their own curriculum and fees. All state welfare benefits would be means-tested and capped in terms of the time people could remain on them. The age of eligibility for state superannuation would be raised gradually and the New Zealand Superannuation Fund would be boosted through the sale of state assets, with the aim of eventually making it (and private pension provisions) self-sufficient.

Housing and Construction

Housing affordability would be addressed by increasing supply through the abolition of the Resource Management Act and simplification of the Building Act. Property and common law rights would be strengthened as would the ability to pursue tortious damages through the courts. Builders would be encouraged to offer lifetime liability insurance with the sale of all new buildings. Growth in the money supply, which is driving house price inflation, would be limited to the rate of productivity growth in the economy.

Energy and the Environment

Restrictions on mining and oil and gas exploration on private land would be removed, and concessions would be granted for more exploration and extraction on public land and in our territorial waters, with he aim of making New Zealand a net exporter of energy. Strengthened property and common law rights, as mentioned above, would become the primary means of protecting the environment.

The Emissions Trading Scheme would be abolished as would the cronyist Provincial Growth Fund.


Transport would move to be fully user-pays through electronic tolling, distance charging and fares. Publicly owned transport operators such as Kiwirail and Air New Zealand would be fully privatised.

Treaty of Waitangi Claims

The Treaty of Waitangi tribunal and settlements process would be abolished and the law would provide for any outstanding historical claims related to dispossession of Maori land to be pursued through the courts like any other civil case.


paul scott said...

Excellent budget. Approved in principle. I would like to see a cost analysis of the total funding deficit and where those deficits would be made up from in high-cost portfolios.

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