ACT says New Zealand would save $11.2 billion if it was in power, proposing an alternative Budget that would see tax rates cut, minimum wage increases paused and the Zero Carbon Act repealed.
The Government will announce its "Recovery Budget" next Thursday where money is likely to be prioritised on child poverty, housing, and climate change.
Budget 2021 comes after the Government made a raft of changes that came into effect on April 1 - including the introduction of a 39 percent top tax rate for those who earn over $180,000.
But ACT leader David Seymour believes middle New Zealanders are also "being taxed as if they're rich". Currently, those who earn between $48,000 and $70,000 are taxed at a rate of 30 percent.
ACT would cut that to 17.5 percent, which is currently the tax rate for those earning between $14,000 and $48,000. The party says it would also reverse the Government's new top tax rate.
"We all need to do our bit but it wouldn't feel like such a burden if we knew we were paying for high-quality infrastructure, health, and education, but right now much of that money is being aimlessly thrown around," Seymour said in a statement.
"ACT's alternative Budget will make $11.2 billion in savings, taking on $23 billion less debt and deliver $3.8 billion per year in tax cuts."
In its 'Budget for the Battlers', ACT is proposing to:
- Cut the 30 percent tax rate to 17.5 percent
- Reverse the Government's interest deductibility change
- Pause minimum wage increases for three years
- Reverse the Government’s recent workplace relations changes, including the Matariki public holiday, new sick leave entitlements, and 90-day trial changes
- Reinstate 90-day trials for all businesses
- Introduce a streamlined consenting process for resource projects and land access
- Repeal the ban on new offshore oil and gas exploration permits
- Pass the Regulatory Standards Bill
- Repeal the Zero Carbon Act and reject the Climate Change Commission's recommendations
- Exempt investors from OECD countries from the need to receive OIO approval to invest here
- Establish an Epidemic Response Unit
- Repeal and Resource Management ACT and replace it with separate Environmental & Urban Development Acts.
Seymour said the party's alternative Budget would be for middle New Zealand.
"Kiwi battlers are paying more at the supermarket and at the pump, and they're getting hit with new taxes while wages fail to keep up.
"We've always been told if you study hard, get good grades, get a good job, save money, and invest wisely, you’ll get ahead. Under Labour, if you work hard, you get taxed more."
Seymour said the Government was piling on debt - which it took to keep the economy afloat during the COVID-19 crisis. Treasury's update last week showed debt is more than $105 billion, representing 33.3 percent of GDP, up from 19.5 percent in February 2020.
"That's $28,995 for every taxpayer. If it's not you paying it back, it will be your children and their children," Seymour said.
"Why should workers' pay more tax to support Labour's wasteful, ideological spending?"
The Government's new top tax rate was predicted to raise about $550 million per year. The Green Party, meanwhile, has repeatedly called for wealth taxes and before last year's election proposed a 1 percent tax on net assets over $1 million and 2 percent over $2 million.
The National Party, like ACT, has said it would reverse interest deductibility charges. National also proposed tax cuts before last year's election but lost to Labour in a landslide.