Grading the Government: A Half-Term Report Card by David Seymour

Opinion 08/03/2019
Jacinda Ardern. Photo: File.

By David Seymour, ACT Party leader.

OPINION: Assuming there's a general election in September 2020, we are now at the halfway point of the Labour Government’s term in office. If you’re a voter who generally believes government should stick to the basics and not interfere too much in people’s lives, how has Jacinda Ardern’s team performed so far?

  • Tax

Finance Minister Grant Robertson says any new tax plan will be revenue neutral. Even if that's true, it will still mean that government takes 1 in every 3 dollars earned in tax. The government took nearly $85 billion in the year to 30 June 2018 – $48,400 for each household. 94 per cent of world’s population live in countries with lower tax-to-GDP ratios than New Zealand’s. Taxes on working, saving and investing mean people do less of those activities, leaving us all poorer. 

Verdict: The Finance Minister’s claim that the Government won’t take more of your money isn't good enough. We need to build a productive and dynamic economy through lower taxes, not one in which people just take money off one another.

  • Spending

The Government has been unable to control wasteful spending. The $3 billion Provincial Growth Fund has supported marginal projects - spa pools, a failing dairy company - to boost the election prospects of NZ First. Fees Free puts the children of lawyers and doctors through university and wastes $50 million on those who drop out. Labour continues National’s corporate welfare, including lining the pockets of Hollywood bigwigs. Every dollar government spends is a dollar individuals and businesses can’t. The question is: Are these programmes getting better outcomes than the private sector could? The answer is almost invariably “no”. 

Verdict: The Government’s profligacy shows contempt for those who earned the money. It also means they’ll need to tax New Zealanders even harder to pay for it all. ACT would end corporate and middle-class welfare and return the money to taxpayers. 

Photo: Getty.
  • Education

Given its close relationship with the teachers unions, one of the highest priorities of the newly-elected Labour Government was to end ACT’s Partnership School model. For decades, Labour and National have supported a one-size-fits-all education model that has seen disadvantaged students slip through the cracks. Partnership Schools offered a bright speck of innovation. Disadvantaged students that had been failed by the state system were engaged and succeeding. This made the Government’s decision to end the model inexplicable. 

The Government also wants to take important decisions about education away from parents. Local communities have controlled schools through parent-elected Boards of Trustees for thirty years. That local control is under threat from the biggest education reforms in a generation. The Government’s Tomorrow’s Schools Review proposes that all powers held by Boards would be transferred to new ‘Education Hubs.’ These Hubs could move schools in and out of zones, move principals to other schools, and impose new rules on a school regardless of their community’s wishes.

Verdict: The decision to end the Partnership School model will be a stain on the record of this Government. Taking control from parents and communities will have far-reaching negative consequences. ACT believes parents and communities should be free to shape the future of their schools and will fight to make educational choice a priority for any future government.

  • Housing 

The entire housing debate has been dominated by a distraction: KiwiBuild. Rather than releasing new land and cutting red tape, KiwiBuild is competing with the private sector to build on existing scarce, overpriced sections. Phil Twyford talked a big game in opposition about abolishing the Metropolitan Urban Limit to let Auckland grow, but, halfway through his term, he hasn’t taken any action. 

Verdict: Housing is massive challenge. But it is one which this Government hasn't even begun to address. ACT’s comprehensive housing plan was covered here a month ago.

  • Employment law

One of the first actions this Government took was to scrap ACT’s 90-day trials for businesses with more than 20 staff. But trial periods give employers more confidence to hire new employees, meaning people who struggle to find work have a better chance of gaining skills and employment. 

The Government’s has hiked the minimum wage to the highest level in the developed world. That’s great for workers who keep their jobs, but really bad news for the 11,000 people government officials say will end up out of work because new jobs won’t be created.

Industry-wide centralised bargaining through so-called ‘Fair Pay Agreements’ will require employers and employees to abide by the terms of an agreement 90 per cent of them didn’t sign. That will create costs and inflexibility that will make it harder for firms to remain competitive. It will also sever the link between effort and reward as employees are paid the same as the worst worker.

Verdict: The Labour Government is driving us away from the flexible and innovative economy which would allow New Zealanders to create new opportunities through freedom.

  • Welfare

In the next month or so, the Social Development Minister will reveal her plans for the welfare system. Given the rhetoric that our welfare system is too harsh, and the fact the welfare review was initiated by the Greens, expect it to become easier for people to stay on benefits.

Verdict: Watch this space. ACT will be advocating for a system that doesn’t create intergenerational welfare dependency.

Photo: File.
  • Environment

The decision to ban offshore oil and gas exploration was made without cost-benefit analysis or consultation. It was a political decision intended to make people feel good. Economic consultancy NZIER has found the policy could cost the economy $30 billion and cost 3000 jobs but will have an “undetectable” contribution to reducing global emissions.

The Government’s Zero Carbon Bill will be introduced in the next few months. It will place massive costs on households, but Climate Change Minister James Shaw doesn’t know how it will affect greenhouse gas emissions or temperatures. Analysis predicts average GDP per year until 2050 could be $37 billion lower. Per household income might fall by $10,000. For what environment gain? We don’t know. 

Verdict: The oil and gas ban will make New Zealand poorer and will drive production of oil and gas overseas, harming the environment. The Zero Carbon Bill is a big unknown. In order to debate it, we need transparency its costs and benefits.

David Seymour is leader of the ACT Party.