| Catching Australia By 2025 ACT New Zealand Finance Spokesman Sir Roger Douglas has released his discussion document ‘Catching Australia By 2025: An Alternative Approach’ which outlines a comprehensive reform of Government expenditure, accelerating our economic growth and creating opportunities for all New Zealanders to get ahead.
“I believe the reforms set out in this plan are exactly what New Zealand needs in order to catch Australia by 2025,” Sir Roger said.
“Treasury’s latest report has shown that if we don’t make changes, New Zealand’s net debt will rise from the current 20 to 220 percent of GDP by 2050.
“To create a prosperous nation, we must substantially increase productivity growth. In the 80s and 90s we achieved productivity growth of around three percent. Recently that has dropped to one percent. To beat Australia by 2025, we need productivity growth to be 3.5 percent.
“To deliver strong productivity growth we must focus on six key areas: private ownership, competitive markets, low taxes, efficient capital markets, free economic exchange, and quality monetary policy.
“Ad-hoc reform will do little to kick start the economy. I propose a package of policies that will work together, creating a powerful set of incentives for all New Zealanders.
“In summary these reforms include:
Tax:
• Tax free threshold of $31200 for a taxpayer with no dependents, with an additional tax free allowance for those with dependents
• Flat tax of 16⅔% above the threshold, with a temporary three year 10% surcharge on income earned over $100,000.
• Corporate income tax abolished
• A capital tax of 0.8% on the value of assets, with a $1m deduction for households. Any asset with a return on investment higher than 2.5% will be better off under this system than with the current corporate income tax.
Competitive Markets:
• Education – competitive marketplace where consumers call the shots
• Health – competitive insurance markets and hospitals competing for business
• Superannuation – individual savings accounts, with individuals controlling when they retire and having higher incomes in retirement
• Welfare insurance (accident and unemployment) – with private insurance companies competing for business and managing people back into the workplace.
• Creating an environment where there are substantial improvements in productivity – improving access and outcomes for all.
Capital efficiency:
• No corporate income tax – replaced by a small capital tax
• Rewards the productive use of capital – moves capital from non-income earning to income-earning areas.
Free economic exchange:
• Free trade
• Ensure contracts, not central Government regulation, define voluntary relationships between consenting adults.
“Productivity is the key. If we implement the above policies, our productivity growth will soar and provide us with the opportunity to not only match Australia, but to beat them,” Sir Roger said.
Come to the ACT Party Christmas function at Sunnytown Restaurant, Newmarket, Auckland this December 5 where I will answer your questions on 'Catching Australia by 2025: an Alternative Approach' see registration form attached - or go to my website www.rogerdouglas.org.nz for registration form, and full text of paper.
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