ACT's proposals to lower cost of living: Abolish trade tariffs, simplify immigration settings

ACT wants to abolish trade tariffs to bring down the cost of items, simplify immigration settings and streamline the process for foreign supermarket chains to enter the New Zealand market.

They're just several of the nine proposals the party has presented within a cost-of-living document released on Thursday. It comes just three days after StatsNZ revealed inflation soared 7.3 percent in the year to June 2022 - the largest year-on-year rise since 1990.

"With inflation at a 32-year high, the Government needs to take responsibility for its role in the cost of living crisis. That means taking concrete actions to lessen the burden on Kiwi battlers," says ACT's leader David Seymour.

He said the nine proposals would "lower the everyday costs being felt by Kiwis". 

"Labour's gesture politics makes no difference to the underlying problem – we need real change."

The nine proposals:

  • Abolish all tariffs to reduce the cost of clothing, food and equipment imported into New Zealand
  • Simplify the Accredited Employer Work Visa scheme by abolishing labour market tests, industry wage requirements, and transfer restrictions
  • Allow foreign supermarket chains from OECD countries to bypass the Overseas Investment Act to enter our sector
  • Create a register of substitute materials to GIB and require councils to accept the materials
  • Incentivise and resource councils to provide infrastructure for new homes by sharing half of the GST levied on new housing construction in their regions with them
  • Simplify the tax system with a two-rate structure - 17.5 percent up to $70,000 and 28 percent after that, with a low- and middle-income tax offset and carbon tax refund
  • Replace the RMA with a law where only those whose property is directly physically affected can object to development
  • Return the Reserve Bank to focusing solely on taming inflation and applying stricter scrutiny
  • Reverse Government changes like the Fair Pay Agreements, extra public holiday and bring back 90-day trials.

Seymour said those actions - some of which have already been announced - as well as the party's plan to cut spending by $6.8 billion would be the "bold change New Zealanders need".

"They're sick of hearing the blame game where the Prime Minister refuses to take responsibility. They're sick of Labour blaming everyone from supermarkets, to fuel companies, to Vladimir Putin," he said.

"Kiwis shouldn't have to just accept that New Zealand is too expensive. ACT doesn't accept that and with the right policies and the political will to make them happen it doesn't have to be."

"Labour's gesture politics makes no difference to the underlying problem."
"Labour's gesture politics makes no difference to the underlying problem." Photo credit: Getty Images.


Brooke van Velden, ACT's trade spokesperson, said the Government levies about $195 million in tariffs on products Kiwis buy from abroad, ranging from clothing, biscuits, chardonnay, railway locomotives and ambulances.

These tariffs increase the price of imports, she said, with estimates that tariffs could increase the cost of a school uniform for the average child by $20. They also reduce competition by allowing domestic producers to charge higher prices and are a compliance burden on importers, she said.

Removing tariffs would drive producers to be more productive and competitive internationally as well, van Velden said. 

"Just look at our world-leading agriculture industry. Abolishing agricultural tariffs in the 1990s helped our farmers develop products that the rest of the world desires because of their quality alone," the MP said.

"The reality is that tariff levels barely factor into our FTA negotiations now. They no longer apply to most agricultural products anyway, and the rest of our market is small enough that offering the carrot of reduced tariffs is unlikely to make an impact. Singapore is a shining example of this, unilaterally abolishing tariffs and becoming an archetype of free trade."


ACT also wants to address workforce shortages causing strain on services.

It would dump the labour market test - which requires employers here in New Zealand to attempt to employ Kiwis before looking offshore - and get rid of specific wage requirements and transfer restrictions. 

"Foreign workers should be able to work for accredited employers so long as they are employed consistent with New Zealand law," said immigration spokesperson Dr James McDowall.

"Employers across New Zealand are facing the same problem, they need workers but it is near impossible to bring them in from overseas."

The Government in May unveiled its immigration reset, which includes a Green List of occupations with streamlined pathways to residency. 

Two pathways were created - a fast-tracked category making those working in a number of roles eligible for residency nearly immediately, and a 'work to residence' pathway requiring migrants to work in their role in New Zealand for two years before gaining residency.

The policy has been controversial, particularly as nurses were placed on the second pathway despite there being serious shortages and claims the health system is facing a crisis. A number of groups in the sector called the move "sexist" by putting male-dominated roles on the fast-tracked pathway. But the Government said it's an improvement on what nurses faced previously and ensures migrant nurses stay in their roles. 

ACT says it would place all occupations on the Green List on a fast track to residency.

"The Government's new residency scheme 'Green List' leaves far too many professions out in the cold and Kiwi business owners shaking their heads," Dr McDowall said.

"The few professions that are eligible for residency are held back by leisurely visa processing times."

Robertson pointed to global factors as reasons for the inflation jump.
Robertson pointed to global factors as reasons for the inflation jump. Photo credit: Getty Images.

What the Government's currently doing

In response to the sky-high inflation figures announced on Monday, Finance Minister Grant Robertson pointed to international factors - such as supply chain disruptions and the war in Ukraine - and said other countries are also facing higher prices.

"We recognise that this is a tough time for New Zealanders and the rise in the cost of living is making it hard for many," he said. "We have taken steps to ease some of that pressure on households, particularly those on lower incomes."

Those measures include raising benefits and the minimum wage, cutting transport taxes and fares until January 31, and taking on recommendations from the Commerce Commission to drive competition in the grocery sector. A taskforce has also been set up to examine GIB shortages.

The Government also announced at the May Budget that from August 1, Kiwis earning less than $70,000 and not receiving the Winter Energy Payment will get roughly $27 a week for three months. Treasury recommended against that "broad-based payment", saying it could "add to inflationary pressures", but this was mitigated by it being temporary.

But both ACT and National have said many of those measures don't go far enough.

"ACT called the cost of living crisis in December last year, but denial has stopped the Government from acting," Seymour said on Monday after the release of the Consumer Price Index.

"First the Government has said there is no crisis. Then it was only temporary. Then there really was a crisis but don't worry because other countries have one too. Now this Government is doing what it does best; gesture politics with a fuel tax discount here and a one-off payment there that will make no difference to the underlying problem."

May's Budget Economic and Fiscal Update (BEFU) forecast inflation would remain outside of the Reserve Bank's targeted 1 to 3 percent range until 2025. It said inflation was the result of strong domestic demand, as well as global factors like supply chain issues and the war in Ukraine. 

In its May Monetary Policy Statement (MPS), the Reserve Bank said it expected inflation to fall to 4.4 percent in 2023, 2.5 percent in 2024 and 2 percent in 2025. The RBNZ has made three 50 basis point hikes to the official cash rate (OCR) in an attempt to dampen demand.