Goldsmith Update - Restoring New Zealand's Prosperity
The lives and livelihoods of many New Zealanders have been upended by the pandemic and many businesses, large and small, have been pushed to the brink by events out of their control. Families are suffering as a result. Our economy has shrunk and our public debt has ballooned.
We have every confidence our great country will get back on track. We will restore our prosperity and once again have an economy that can provide opportunities for the next generation and a good standard of living.
But it will take hard work. It will take competence and a problem-solving attitude at the border, and a relentless focus on economic growth along with improved productivity.
With National’s ambitious economic policies, we’ll get back on our feet faster.
This October, New Zealanders have a choice for our economic response to Covid-19 between ever more government programmes from Labour and the Greens, or more money in their pockets from National.
We’ll back the workers of New Zealand – the men and women who get up early each day to provide for themselves and their families – and during this difficult time we’ll provide some tax relief.
It’s clear New Zealand is in for a tough year in 2021. We will need more stimulus to avoid prolonging the recession and to reduce the economic and social scarring that the Treasury predicts. The fairest and most efficient way to avoid that scarring is through the tax system, by putting more of New Zealanders’ own money back in their pockets.
National will ignite the economy by providing a 16-month tax stimulus package that will put more than $3000 in the pocket of the average earner, or nearly $50 a week.
Under Labour and the Greens, Kiwis can only look forward to higher taxes. A Government that can’t control its spending – as this one has demonstrated – will soon come after more and more New Zealanders for more tax.
Not only will National back Kiwis, but we’ll also back the businesses of New Zealand – large and small – to drive the job creation and productivity improvements we need to provide more opportunities for New Zealanders and higher incomes.
We will stimulate business investment and lift confidence by allowing businesses to immediately deduct new investments up to $150,000 and double depreciation rates for investments over $150,000 in Plant, Equipment and Machinery.
We’ll push back the tide of regulation starting with the RMA, which has become a barrier to so much progress.
Our economic plan will revive economic growth by reducing the costs, regulation and uncertainty that is preventing the private sector from hiring new staff or investing in new equipment.
We will increase Government spending on core public services like health and education every year, but we will have an absolute focus on getting good results for that extra spending.
Throughout history, severe downturns such as the one we are experiencing now have also been a time when generational investments have been made that help set up the restored economy for growth. National will make these much needed historic investments. We have an ambitious infrastructure plan, with a focus on transport and education.
We have the vision of properly connecting the 2.5 million people living between Whangarei, Auckland, Hamilton and Tauranga to make that region one of the most dynamic in Australasia. That sort of growth will underpin future jobs and opportunities.
Our commitment to delivering infrastructure extends to world-class schools and classrooms. Now is the time to invest in better learning environments for this and future generations.
However, unlike Labour, we recognise the need to act responsibly for future generations by restoring public debt to prudent levels over the next decade or so, so New Zealand is prepared for future shocks and taxes do not need to rise.
The best path back to a prudent debt level requires an absolute focus on economic growth and disciplined Government spending, not higher taxes.
Discipline in day-to-day spending and a focus on economic growth enables us to provide immediate tax relief while still increasing investment in infrastructure and core public services, and all the while setting a longer-term path to prudent levels of debt.
National will inject massive stimulus from 1 December this year by providing a 16-month tax stimulus package that will put more than $3000, or nearly $50 a week, in the pocket of the average earner.
We will pay for this stimulus by drawing down on the Covid-19 Fund. We will still retain a lower debt track than Labour because we will be more disciplined with day-to-day spending over the longer term.
National will allow businesses to instantly write off new investments up to $150,000 and double depreciation rates for investment in Plant, Equipment and Machinery over $150,000. This will drive business investment and job creation.
National will index tax thresholds to inflation to protect New Zealanders from tax increases by stealth.
National will stimulate the private sector to create new jobs by providing tax deductions for businesses that invest in new assets.
National will massively reduce red tape and compliance costs for businesses, reducing their costs and allowing them to take on new employees by restoring 90-day trials, repealing the RMA and simplifying small business tax compliance.
National will encourage businesses to hire new staff with our JobStart policy, which will provide a $10,000 tax incentive for every new job created.
National will massively lift investment in transport infrastructure, with a $31 billion programme over the next decade.
National will invest in our future generations by investing an additional $4.8 billion over the next decade in upgrading our schools.
National will establish the National Infrastructure Bank to ensure investments are professionally managed, and the debt is minimised through sound management.
Responsible Economic Management
Under National net debt will drop to 35 per cent by 2034, compared with 48 per cent as forecast by PREFU.
National will return to surplus by 2028. As opposed to never under Labour.
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