Drivers are already angry every time they fill up at the pump and they’ll take no comfort from the Government’s willingness to double-dip on tax if petrol prices keep rising, National’s Finance spokesperson Amy Adams says.
“The Government imposed an excise tax increase of 4 cents a litre on petrol prices already at a record high and plans the same hikes in 2019 and 2020. It is stubbornly insisting more taxes are needed even though Kiwis are already reeling from rising living costs.
“The Associate Finance Minister has today signalled there will be no let-up for motorists if prices keep rising even though the Government may end up raking in as much in additional GST as it would from increases in excise. For example, if petrol prices go up by 30 cents, the GST on that alone would be 4 cents.
“The Government should cancel further fuel taxes if petrol prices keep rising as it will generate the same revenue from the GST alone. It should also own up to its part of the pain inflicted on drivers, since more than half the pump price is tax, instead of shifting all the blame onto oil companies.
“Fuel prices drove up consumer prices in the third quarter but the full impact on New Zealand’s economy is only starting to be felt as it shows up in the transport cost of getting raw materials to factories and finished goods and services to consumers.
“The Government insists more excise taxes and regional fuel tax are needed to fund infrastructure. A better strategy would be to cut wasteful spending like the $2.8 billion on fees-free tertiary education that hasn’t boosted numbers or the money thrown at a gondola for Whakapapa ski field.
“National would restore a policy framework that promotes economic growth, which is the only sustainable way to increase job opportunities and wages. Squeezing more tax out of motorists isn’t the answer.”
Figures today show a falling New Zealand dollar, rising fuel prices and bad Government policies are driving up the cost of living for Kiwi families, National Finance spokesperson Amy Adams says.
“The rising cost of living is making it more and more difficult for New Zealanders to get ahead and a large part of the rising costs is directly attributable to bad Government policies.
“Higher fuel taxes, a lower dollar and rising oil prices are contributing to a record high price of petrol. Petrol prices surged 19 per cent in the past year alone. Sadly, these costs are disproportionately hurting low income earners who tend to commute further and drive less fuel-efficient cars.
“Rising fuel costs flow through into the prices of everything that must be transported, be that raw materials being trucked to factories or food being delivered to supermarkets.
“New Zealanders also face rising housing and living costs and their costs are only going to rise further because the Government is planning more taxes, more wasteful spending and policies that drive up costs throughout the economy.
“The Reserve Bank’s decision to hold interest rates lower for longer reflects its view that the economy has weakened. That contributes to a lower Kiwi dollar and increases the price of imported goods that New Zealand families use every day.
“As today’s inflation statistics show, Government policies are increasing the cost of living and taking a much bigger chunk out of New Zealanders’ pockets than this time last year.
“National believes the best way to help New Zealanders get ahead is to let them keep more of what they earn. We would also restore a policy framework that promotes economic growth, which is the only sustainable way to increase job opportunities and wages.
The Government’s fuel tax increases have needlessly driven up the cost of living and should be repealed immediately, National’s Finance spokesperson Amy Adams says.
“Yesterday Deputy Prime Minister Winston Peters tried to defend fuel taxes saying 100 per cent of the hundreds of millions of dollars of fuel taxes being paid by motorists is going to roading infrastructure and maintenance.
“But this simply isn’t true.
“Earlier this year the Government changed the rules on fuel taxes and allocated billions of dollars away from state highways and into rail projects. This means motorists around the country are now paying fuel taxes to fund expensive rail projects and getting fewer new roads.
“This includes the proposed tram project in Auckland which will cost up to $6 billion.
“The problem is that the Government is not just spending fuel taxes on roads, they’re spending fuel taxes on expensive election promises without properly considering alternatives.
“National was committed to investing in major public transport solutions in Auckland without needing to raise new fuel taxes or impose regional fuel taxes.
“Our commitment to protect the public transport route and explore an advanced bus network was credible and much more cost-effective than Labour’s trams.
“NZTA has even advised the Government that other systems will offer the same benefits as trams and can be completed much faster and at a fraction of the cost.
“It is time for the Government to properly consider NZTA’s advice and look for more cost effective solutions that don’t involve ramping up costs on New Zealanders. If other transport options can be utilised the Government should scrap these new fuel taxes immediately.”
The Prime Minister yesterday used numbers that ignore the Government’s fuel tax hikes in an attempt to underplay its role in the pain inflicted on Kiwis at the pump, National’s Finance spokesperson Amy Adams says.
“Jacinda Ardern claimed that Government taxes have only contributed 6.9 cents a litre to fuel price increases in the past year. But this is only the GST and Emissions Trading Scheme components and completely ignores the Government’s fuel excise tax of 4 cents a litre and the Auckland Regional Fuel Tax of 11.5 cents a litre.
“Adding in what the Prime Minister conveniently ignored shows taxes – the part the Government can control - accounted for a much larger proportion of the increase than claimed.
“The Government is piling on fuel taxes at the worst possible time, when petrol prices are already at record highs and the Kiwi dollar is falling. Instead of cancelling the increases she is insisting more tax hikes must be made in 2019 and 2020.
“The Prime Minister said New Zealanders were being ‘fleeced’ at the petrol pump but given how much of that can be sheeted home to this Government, the public is right to ask just who is doing the fleecing.
“The Government’s hasty response to public anger over petrol prices driving up the cost of living doesn’t ring true. The Prime Minister also claims to be rushing through legislation giving the Commerce Commission the power to investigate markets such as fuel.
“But the Commerce Amendment Bill that the Prime Minister cites was reported back on September 12 and could have been progressed last month. Instead, the Government gave priority to the Waka jumping legislation.
“The Government needs to stop inflicting new costs on New Zealanders. Being up front about the additional costs of fuel taxes would at least show that the Prime Minister understands the problem.”
The Government can’t continue to cling to policies that are harming the economy while trying to ignore the growing body of negative indicators, National’s Finance spokesperson Amy Adams says.
“The latest Quarterly Survey of Business Opinion shows the percentage of firms expecting economic conditions to deteriorate is at the highest since March 2009 and the important own activity measure is the lowest in six years.
“NZIER says the survey points to GDP growth of just 2 per cent in the year to September 30, well below the levels touted by the Finance Minister. Significantly, the survey found that Government policy was the biggest driver of business confidence, followed by labour issues.
“Instead of taking credit for the strong foundations built up by National, the Government should stop experimenting with the economy and cease being the biggest source of uncertainty for business. It is arrogance to ignore the impact of bad policies.
“National wants New Zealanders to keep more of what they earn. It believes in sensible, consistent economic policies that encourage businesses to grow, invest more, create more jobs and lift incomes.
“The QSBO shows this Government is doing the opposite. More firms cut staff in the latest quarter and they expect to reduce investment in the coming three months.
“These findings from NZIER are in line with other indicators. The Business Central survey this week shows businesses across the lower North Island remain broadly pessimistic and most ‘don’t think the Government has a plan to raise the country’s economic performance.’
“Business Central says businesses are ‘most concerned about uncertainty around the Government's policies, finding the right staff, and future employment law changes.’
“New Zealand needs to maximise its opportunities not squander them or our ability to cope with external global shocks will be diminished and we will fall further behind comparable economies like Australia.
“The realities of overseeing an economy are being learned too slowly by this Government. It is clinging to a high-cost, feel-good wish list but offering little substantive policy to drive economic growth and deliver more opportunities for New Zealanders.”
Business confidence remains weak, with investment intentions falling further this month. In addition workers are less confident about their pay and job security – the latest signs that the Government’s policies are hurting the economy, National’s Finance spokesperson Amy Adams says.
“The Government may be happy looking in the rear-vision mirror at second-quarter GDP as a sign that things are not as bad as was feared but real-time indicators show what’s really happening.
“Both consumers and businesses are markedly less optimistic. Business confidence and the important own-activity measure remain at levels not seen since 2009. At the same time cost of living and firms’ pricing intentions continue to rise.
“This impacts everything from investment and hiring workers to major household purchases. The Government should acknowledge the harm it is doing rather than trumpet its performance with carefully edited claims about the economy.
“While last week’s headline GDP numbers weren’t as bad as the Reserve Bank had predicted, GDP per capita was just 0.7 per cent for the year. This is significantly below the 1.6 per cent per capita New Zealand has averaged since 2012. GDP per hours worked, a critical productivity measure, actually fell 0.7 per cent in the June quarter and has fallen in each of the last two quarters.
“The June quarter numbers don’t pick up the numerous signs over recent months that the economy is softening further. Real-time measures such as business and consumer confidence suggest there are still real challenges facing our economy now.
“Instead of giving New Zealanders an air-brushed account of its performance, the Government should acknowledge where it has gone wrong and focus on policies that actually help the economy to grow.”
It is good news for the New Zealand economy that Moody’s Investors’ Service has affirmed our Aaa rating but we shouldn’t let the Government now waste it, National’s Finance spokesperson Amy Adams says.
“The recent international credit rating agency report praises the strength of an economy built up under nine years of a National Government.
“In Moody’s own words: it notes how New Zealand’s fiscal metrics ‘improved swiftly in the aftermath of the 2008 recession and the 2011 Canterbury earthquake; they continued to improve through the downturn in commodity prices from 2014-2016 and the Kaikoura earthquake in late 2016.’
“That New Zealand survived both economic and natural challenges and was still able to emerge stronger is testament to National’s stable hand in Government
“Moody’s also praised National’s debt reduction, pointing out that ‘the central government's gross debt fell to 26.5 per cent of GDP in 2017 from a recent peak at 31.3 per cent in 2012.’
“Economists have already cut their forecasts for Government surpluses in coming years because of the likelihood the Government will need more revenue than it expects to fund its wasteful and largely unquantified spending plans.
“National built up strong economic foundations for New Zealand which are now at risk of being torn down, undoing all the good words Moody’s have today praised.
“The Government’s employment policy will undermine the strength of New Zealand’s labour force and make it less flexible at a time when great change is being demanded of employers in a global market.
“It has already dampened enthusiasm for New Zealand as an export destination, turning away the vast investment appetite of global capital right now.
“It also decided to impose a fuel tax just as global crude prices were rising, hitting Kiwis at the petrol pump and its ban on oil and gas exploration ensures New Zealand will be a net importer of fossil fuels products, with all the cost that implies, for the foreseeable future.
“It is far easier to spend wealth than create it. National wants all New Zealanders to have the opportunity to accumulate wealth.
“Low-quality spending such as we’ve seen from this Government with its working groups, slush funds and massive but unsuccessful student bribe shows how quickly gains can be eroded.”
Today’s GDP figures illustrate the fallacy of the Government’s claim they won’t rely on population growth to underpin economic growth as GDP per capita came in well below headline GDP growth, National Finance Spokesperson Amy Adams says.
“GDP per capita was just 0.7 per cent for the year. This is significantly below the 1.6 per cent per capita New Zealand has averaged since 2012.
“In order to close the after wage gap with Australia - as we had been doing since 2008 - we need to be growing faster on a per person basis. Instead, New Zealand is now falling further behind.
“The Government inherited an economy that was growing strongly. Every one per cent lower growth means fewer opportunities for New Zealanders and around $800 million a year less revenue to pay for public services.
“With strong terms of trade and international growth rates, the Government has nobody to blame for the lower GDP growth but itself.
“Despite the quarterly results exceeding the Reserve Bank forecasts, these forecasts were already significantly lower than what was expected of the economy before the Government came into office last year.
“As the June quarter numbers released today don’t pick up the recent sharp drop in consumer confidence and business own activity indicators, GDP results for the second half of the year will be a better indication of just how much this Government is constraining our economy.”
“Economic growth needs stable, sound and pro-growth economic policies. The current Government doesn’t seem to realise that. Instead, it has implemented a range of growth-limiting policies such as increasing costs, banning oil and gas, banning foreign investment, introducing union-friendly labour reforms and not ruling out a higher tax burden for New Zealanders.
“A strong and growing the economy is the critical first step in improving the wellbeing and living standards of New Zealanders. Without solid growth we will fall further behind other countries such as Australia.”
Today’s report from the Tax Working Group will do little to reduce fears that more taxes are going to be imposed on New Zealand households and businesses, National’s Finance spokesperson Amy Adams says.
“Despite being given the opportunity to do so, the Government has refused to confirm its tax plans will be fiscally neutral. But this supposed review of the tax system shouldn’t be used as a stalking horse for higher taxes.
“Costs of living are already going up through higher petrol prices and rents, and outstripped wage growth in the last quarter. New Zealand families and small businesses deserve to know if this Government is softening us up for more taxes like a Capital Gains Tax.
“National welcomes the TWG ruling out a land tax or a wealth tax and not tampering with GST but is deeply concerned that the group clearly plans to bring in a Capital Gains Tax.
“The report is a missed opportunity to consider better ways to have the tax system incentivise savings and investment, lift productivity and help small businesses to grow.
“It isn’t good enough for the Government to say any recommendations it takes up won’t come into force until 2021. Taxes already take more of our income than in almost any country outside of Europe, amounting to $50,000 a year on average per household. And the tax take is already set to double by 2032 even before new taxes are added.
“Rather than working out ways to take more money from New Zealanders, the better approach would be to stop the low-quality and untargeted spending we are seeing all too often.
“National believes New Zealanders should be able to keep more of what they earn. The tax system should encourage productive investment and savings, not penalise those who try to get ahead.
“In typical Labour style, this is a Government that clearly thinks it knows how to spend your money better than you do.”
The Government’s anti-growth policies are not only hurting business confidence but are also affecting business decisions such as hiring fewer workers, National’s Finance spokesperson Amy Adams says.
“Grant Robertson has tried to brush aside negative economic indicators or downplay them as a side-effect of an economy ‘in transition’. Insulated in the Beehive, he prefers to ignore the impact this Government’s policies are having in the real world.
“In the services sector, hiring intentions have now contracted for three straight months. Or to put it another way, employment in a sector that accounts for two-thirds of the economy is stalling. That’s the longest run of contractions since January 2011.
“Falling business confidence will be a factor but business owners are also coping with rising labour costs such as a higher minimum wage and the uncertainty created by this Government’s plans to meddle with employment law that doesn’t need fixing.
“The services PSI series comes just days after the PMI showed employment in manufacturing shrank for the third month in four in August. Businesses aren’t just gloomy, they’re acting on that sentiment by creating fewer new jobs and holding off on investment. That, in turn, makes it harder for ordinary New Zealanders to get ahead.
“This Government built its fiscal plans around optimistic growth forecasts that will be thwarted by its own anti-growth policies. That’s a symptom of a naïve administration that lacks the real-world experience to prudently oversee the New Zealand economy.”