The day after the Budget, I started recording down spending demands made by various lobby groups, individuals and MPs. I then estimated what would be the ongoing annual cost of funding their demands.
As far as I know, no-one has done this before. I was expecting to find that the extra spending demanded would be maybe a billion or so.
But no it is far far more than this.
In just five months, the various lobby groups and parties have demanded a total of $8.4 billion in extra spending.
Now consider we made surplus by just $400 million.
Labour go on about making surplus, yet they happily complain about or demand huge amounts of extra spending which would cripple the economy, if the Government agreed.
Again this is $8.4 billion of spending demands in just five months.
So what would the Government have to do, to fund this spending wishlist? They would either have to:
- Increase the top tax rate to 72%; or
- Increase the company tax rate to 65%; or
- Increase the rate of GST to 23%
I’ve embedded below my estimates of costs. They are ballpark, but this is why I helped set up the Taxpayers Union – one of the few groups advocating for spending restraint. My hope is that the NZTU will take on this exercise as an ongoing project and regularly update us on the total level of spending demands being made by MPs and lobby groups. This would fit in well with their work last election rigorously costing explicit election promises.
A Government that gave in to every complaint and spending demand would bankrupt New Zealand, and send us down the path of Greece. I want to avoid that.