Nicola Willis had a name for the government’s bungled cost of living payment in her speech to National’s conference – KiwiSpray.
That could be applied to far too many of Labour’s policies that show they don’t understand that spending more is very different from doing more effectively.
There were plenty of other gems in her speech:
. . . And thank you to our Leader, Christopher Luxon, for driving that mission. For uniting our team, for growing our support, for bringing his immense work ethic, integrity and enthusiasm to the leadership of our Party.
I’ve so enjoyed getting to know Chris better these past few months, seeing his deep care for people, his commitment to get the best out of every player in the team, his depth of knowledge and his global perspective. His pride in New Zealand and his optimism for what we can achieve.
Together, we’re going to turn this country around.
Our first task is to win an election, that’s true, but our ultimate task is to take New Zealand forward.
Now more than ever, New Zealand needs a National Government with a positive vision for the future.
Because as resilient and tenacious as we Kiwis are, and as great as this country of ours is, there’s no denying how tough things have become.
New Zealand is facing the most challenging economic conditions many of you will have experienced in your lifetime.
The cost of living crisis is making everything more expensive.
Prices are growing faster than wages, meaning your pay gets you less this month than it did the month before.
Interest rates are climbing fast, rents have exploded, and mortgage payments are costing more.
Businesses can’t find workers, so they’re letting down customers, compromising quality and giving up on growth ambitions.
The hotel I stayed in at the weekend had a sign at reception explaining they didn’t have enough staff to service rooms every day.
The people covering the vacancies feel exhausted, like the small business owner I spoke to recently who’d worked 152 days in a row without a break, like the nurses in our hospital doubling down on overtime and the farmers who can’t remember the last time they did less than a ten-hour day.
With Labour in Government many hardworking people can’t see a way out of these tough economic times. They are despondent about the future and fear it’s only going to get worse.
My message today is simple: National has a better way. We will get the economy working for you once more.
The Cost of Living Crisis: How did we get here?
To get out of our economic malaise we must first understand how we got in it.
Yes, COVID-19 has a lot to answer for.
And yes, New Zealand wasn’t the only country that responded to the pandemic with large amounts of borrowing, spending and money-printing.
But let’s be clear: New Zealand did a lot more of it than most. While all countries put their foot on the accelerator to some extent, our Government put its pedal to the metal.
New Zealand’s COVID-19 spend-up, relative to the size of our economy, was second to only one other country: the United States.
Meanwhile, our Reserve Bank’s monetary response to COVID was the fifth largest in the world, relative to the size of our economy.
We simultaneously had our Finance Minister pumping the accelerator while our Reserve Bank reached for over-drive.
No car can drive that fast without a moment of reckoning, and no economy can either.
Today, we are living with the consequences: Prices are rising faster than they have in 32 years, inflation has got a grip on our economy and its eating a hole in every pocket.
Reality bites. Inflation, like a debt collector in the night, is extracting a price from all of us.
National, along with every other Party in Parliament, is calling for an independent inquiry into the economic response to COVID-19. Labour says no.
I simply say this: Those who ignore the lessons of history are doomed to repeat their mistakes.
The Cost of Living Crisis
Labour’s first approach to managing the cost of living crisis was denial. Now its magical thinking.
Instead of presenting a plan to restore productive growth to our economy and to address the underlying drivers of inflation, it has dialled up its spending, choked access to new workers, and lurched from one temporary band-aid policy to another.
Its signature move, the ‘cost-of-living payment’ has been a spectacular failure, resulting in taxpayer dollars going to ex-pats in London, French backpackers and dead people.
It’s so bad I think it’s earned itself a nickname: I’m going to call it KiwiSpray.
It’s like KiwiBuild only instead of being 99,000 houses short, it’s 800,000 payments short.
National on the other hand has a sensible, common-sense plan to beat inflation.
We will bring an end to Labour’s failed policies of high-taxing, big spending, big Government, with no accountability for failure and no focus on results.
We will restore careful economic management to this country so that prices stop rising so fast, Kiwis can get ahead and businesses can grow.
• We will reduce the tax burden on New Zealanders.
• We will restore discipline to Government spending
• We will reduce the regulation and costs imposed by Government
• We will ensure New Zealand has the workers needed to deliver services and grow businesses
• We will return the Reserve Bank to a single mandate
I want to make a few comments about why tax reduction is important to us.
As our first Leader Adam Hamilton said when National was founded: “[National stands] for a reduction of taxation so that enterprise may be encouraged, industries established and living costs reduced.”
National wants to leave as much spending power as possible in the hands of those earning the money. We want New Zealanders to keep more of their pay so that they can save for that first house, invest in that start-up, expand that small business, hire that new worker, take the kids to the movies or have the security of money put aside for a rainy day.
This highlights an important difference between National and Labour – one trusts us with our own money, the other thinks it knows how to spend our money better than we do.
Labour on the other hand believes bigger Government is the solution to every problem. Despite failing to deliver time and time again, they think things will miraculously get better if only they could spend more of your money. Like a gambler at the track, they throw good money after bad, and take no accountability for the results.
The result is that Government is now collecting $41 billion more a year in tax than when Labour first came to office.
It’s gone too far, and National will ensure a fairer deal.
• We will scrap the Auckland Regional Fuel Tax. It’s hurting Aucklanders every time they fill up at the pump. It has to go.
• We will scrap Labour’s plans for an Auckland Light Rail Tax.
• We will scrap the Ute-Tax. It’s nothing but a punishment to farmers and tradies and you deserve better.
• National will scrap the 39 per cent top tax rate. It’s an envy tax.
• National will scrap the 10 year Brightline test extension. It’s a capital gains tax by stealth. Labour didn’t campaign on it, didn’t have a mandate for it, and did it anyway.
• National will scrap the rent-hiking Tenant Tax. We will bring back interest deductibility for rental properties.
National will also deal to Labour’s stealth tax: inflation-driven bracket-creep.
Inflation has helped fund Labour’s tax and spend binge.
You see, when inflation increases, people’s wages go up on paper. In theory you may be earning more, but in reality the pay rise isn’t helping much because prices are gobbling it up. You’re probably going backwards.
But the IRD doesn’t care. It just sees a higher pay rate, and if you find yourself in a higher tax bracket, you get taxed at the higher rate.
National will index tax thresholds to inflation. We detailed our plan for doing this in March. We will deliver those tax reductions in our first term of Government. It’s our commitment to you.
You can expect to hear more from us on tax reduction next year. Our vision is to go further still.
National is committed to providing as much tax relief to working New Zealanders as we responsibly can.
Labour on Tax
Labour meanwhile is busy designing new taxes.
The Finance Minister, Grant Robertson, is quietly setting up a new unit in the ACC for his latest pet project, a social insurance scheme. He has a plan to pay for it too – a Jobs Tax. That’s right, the Finance Minister is planning a new tax on every single employer and every single employee.
National will scrap Labour’s Jobs Tax.
The Revenue Minister, David Parker, is also up to mischief.
Like many of his Labour colleagues, he fantasises about a capital gains tax.
He’s created his own new unit at the IRD. Sometimes referred to as the “Piketty Unit” after his idol, the socialist economist and wealth-tax advocate Thomas Piketty. The Piketty unit is working at pace, collecting data about New Zealanders assets and incomes, their taxes and business arrangements.
It’s not clear exactly what this will lead to but I do know this:
More tax is in Labour’s DNA, and they’re dreaming up new ways to take it.
Mark my words, Labour will put a capital gains tax back on the table. The name may change, it might be in disguise, but it’s coming.
Disciplined Government Spending
The more Labour spends, the more tax it needs.
And Labour is on a spending spree.
In December, the Government forecast it would spend $120 billion in the 2023 financial year.
Then the Budget rolled around and Labour just couldn’t bring itself to stick to its spending limit.
Instead of spending $120 billion this year, its spending $127 billion. That’s 70 per cent more per year than when it first came to office.
Ask yourself this: Are you spending 70 per cent more today than you were five years ago? I doubt it. Well, the Government is. Are they getting 70 per cent better results? Of course they aren’t.
They’re simply addicted to spending.
National will bring discipline to spending by stopping Labour’s worst projects, reducing backroom bureaucracy, eliminating waste and driving better results from existing Budgets.
Let me give you some examples of poor projects that Labour has been splashing the cash on.
-Three Waters Reform: Labour’s Three Waters plan to do a mega-merger of council owned water assets is undemocratic state centralisation at its worst. It also comes with a $3 billion price tag. National will repeal and replace Three Waters.
– The TVNZ-RNZ Merger: Labour has inexplicably decided to embark on a mega-merger of the two state broadcasters. It comes with a $370 million price tag. National opposes it.
– Labour have also ploughed $200 million into the creation of Te Pukenga, the mega-merger of New Zealand’s polytechnics and institutes of technology. National opposes it.
National will not pour billions of dollars into centralisation and bureaucracy.
National will instead focus on doing the basics better.
We value the vital role Government spending plays in delivering essential public services: providing healthcare and education, ensuring support for the vulnerable, keeping our communities safe, building and maintaining the physical and social infrastructure we all rely on.
That’s why National has committed to increasing health and education spending every year we are in office, matching increases to the rate of inflation at a minimum, but allowing also for population growth and other pressures.
But we know spending more will not in itself deliver better results. If it were that easy, then why is Labour overseeing an explosion in truancy, declining literacy achievement, and a health system in crisis?
National will set public service targets for the better health and education services New Zealanders deserve, drive better delivery, and demand accountability for results.
We will push for more value from every buck. We will ask every Minister to examine spending in their agencies line-by-line with a focus on eliminating waste.
Just as households are having to carefully evaluate their budgets to cope with rising costs, so too should public agencies.
National is wary of the insatiable appetite Government has for growing itself.
We will stop the explosive growth in the backroom bureaucracy and move more resources to the frontline, away from Departments and into communities.
National won’t tolerate a New Zealand where inter-generational poverty is normalised, where Government Departments service misery but repeatedly fail to solve it and where good intentions are seen as a substitute for good results.
National will revive Sir Bill English’s social investment work. We will use his social investment approach to solve our deepest social problems, getting Government agencies out of the way, investing not for narrow outputs tomorrow but for long-term impact, measuring results and changing lives.
We are determined to do better for the New Zealanders whose lives are complex, but whose potential is great. Social investment’s time has come.
National will stop the tide of Government costs and regulations.
As Sidney Holland, National’s first Prime Minister said in 1943 “National believes in individual freedom, a competitive economy, and the minimum of bureaucratic intervention, restriction and regulation”, “ less red tape”.
Our vision is to reduce red tape to ensure Kiwi firms can spend less time and money on compliance and form-filling and more time innovating and growing.
We will restore the right of employers and employees to negotiate freely and not to be bound by new compulsory, nationwide, sector-wide collective agreements.
The 1970s have called and they want their policy back. So-called Fair Pay Agreements have no place in 2022, and no future under National.
There’s nothing fair about the imposition of pay and conditions nationwide.
National will ensure New Zealand has the workers needed to deliver services and grow businesses
We will stop Labour’s experiment of seeing what happens when you starve an economy of migrant workers. We know what happens – fruit rots on the vines, hotel sheets go unchanged, manufacturers cancel orders, exporters leave value on the table and new customers go elsewhere: all for lack of people to do the job.
National will fix our immigration service. We will take it from the bureaucratic Police Force its become and turn it into the Recruitment Agency New Zealand needs it to be.
Finally, National will return the Reserve Bank to economic orthodoxy with a singular mandate to manage inflation
Ladies and gentlemen, the commitments I have outlined to you this morning will ensure our economy works better for you and all New Zealanders.
National is ambitious for this country, and our sights are raised high, so you can be sure we will work relentlessly on the long-time drivers of economic growth:
• unlocking the potential of our people through better education;
• delivering growth-enhancing infrastructure; including the infrastructure New Zealand will need to adapt to climate change
• attracting new sources of capital;
• embracing science and technology, including to reduce greenhouse gas emissions and
• growing our connections with the world;
National has what it take to get this economy off its knees. We can bring hope back to every Kiwi slogging it out day after day, paying the bills, not asking for favours but desperate for a fair go; some reward for your efforts.
We hear the pleas of struggling Kiwis and we say: National has your back.
We won’t sit back and let inflation fleece you every time you open your wallet.
We will back you to get ahead, we will back your family with the better public services you deserve and we will back New Zealand businesses with the freedom and workers you need to succeed.
As Sidney Holland once said: the essence of the National Party philosophy is “fewer restrictions and greater opportunities”, “greater freedom to follow one’s own star”.
National will lift New Zealanders sights to those stars once more. We’ll get the country moving in the right direction again.
Ladies and gentlemen, it’s time to bring some aspiration back to New Zealand. With Christopher Luxon as our Leader, and the people in this room as our support, come next year’s election, that is exactly what National will do.
Last night’s poll showed the country is ready for change and National is working to ensure it’s change for the better.