His State of the Nation Address promises return of trust in people
Venkat Raman
Auckland, March 6, 2022
In all the years that we have known Christophe Luxon, the man has come through as honest, compassionate, practical and most important of all, a leader with a difference.
Luxon delivered his State of the Nation Address in his home constituency (Botany) this morning, paying tributes to his family- his parents, the hardships that they endured, the community welfare organisations with which his mother was involved and his wife Amanda and their children.
Dictatorship and frustration
Warming up to the main content, Luxon spoke about returning the country to businesses and people, away from the government, accusing the Labour Party of ‘dictatorship’ and ‘control by bureaucrats.’ He said that a government under his leadership will repose the trust in people, communities and businesses.
“We have a government that is deeply suspicious of business, and yet leads a public sector that cannot build houses, cannot deliver better health care, and will not do what is needed to improve our education system, all while piling on debt for future generations to pay off. It is no wonder Kiwis I talk to up and down the country are frustrated. They are frustrated at working ever harder but not getting ahead, at being fed line after line of spin rather than real solutions, at being faced with a sea of bureaucrats and politicians who do not listen and who do not represent them,” he said.
Luxon’s State of the Nation contains tax proposals that would perhaps be of interest.
Repealing some taxes
Accusing the Labour government of resorting to ‘massive tax grab’ over the past four years, he listed them as Regional Fuel Tax, Extension of the Brightline Test to ten years (which he said was a stealthy Capital Gains Tax), removal of interest deductibility on rental properties, the new 39% top income tax rate and the proposed Light Rail Tax and the Jobs Tax as examples.
He said that when he becomes the Prime Minister, he will reverse each of these.
Luxon must remember the promises that he makes- John Key had promised voters during his 2008 Election Campaign that he will ‘never raise GST,’ and yet among the first things that were done after coming into office was to raise it from 12.25% to 15%.
“Now is not the time to be adding costs on individuals and businesses. We should be letting people keep their hard-earned money, not forcing them to hand over more and more to (Finance Minister) Grant Robertson to spend,” he said.
The pinch of inflation
Mr Luxon said that inflation eats up people’s real income, makes them afford less on goods and services but a rise in nominal income raises income tax.
“Labour is using inflation as another tax grab by stealth. We have got the perverse situation where someone on the average wage now has a marginal tax rate of 33% And someone on the minimum wage only has to work a 44 hour week to face a tax rate of 30 cents on the dollar. That is ridiculous,” he said and called on the Prime Minister and Finance Minister to give Kiwis a tax break and return the extra tax ‘that they are grabbing through inflation.’
Luxon advised Robertson to use a part of the $6 billion available to him to adjust income tax thresholds to account for the inflation under his watch.
“This would see each of the first three tax thresholds immediately increase by around 11.5%,” he said.
Luxon’s speech addressed many of the current challenges faced by the country and quoted his experience as the President and Chief Executive of Air New Zealand.
“At Air New Zealand, I ensured that the company embraced sustainability – partnering with the Department of Conservation and being a foundation member of the Climate Leaders Coalition to support net carbon zero by 2050.
“And I was able to respond to our country’s shameful record of family violence by making it a workplace issue – implementing three weeks’ paid leave for victims. I was able to ensure that women earned the same as men doing the same job and that they were better represented in our senior ranks. We did all that while delivering strong financial results which meant the number of employees earning over $100,000 grew from 2600 to 4300,” he said.
Returning trust
According to Luxon, trust is the biggest casualty under the Labour government.
He said that young people are being locked out of the housing market, while rents have gone up by $140 a week; climate change policies are not making a difference; real wages are falling; the education system is under-performing and the approach to hardship has seen an actual increase in child poverty.
“We are missing trust. Trust in communities to find solutions. Trust in individuals to succeed and to make their own choices. Trust in businesses to look after their workers and to create value that grows the pie for us all. Trust in people to spend more of their own hard-earned money. And as a result, we are seeing a lack of trust in our government to do anything other than constrain us. I want to rebuild that trust,” he said.
According to him, a Government that truly cares about people must make powerful and targeted interventions on behalf of those with the most complex and challenging lives. With the right resources at the right time in the right place, the State can help people make positive and sustained changes that enable them to rise and realise their potential. That takes more than just writing a bigger cheque. It takes a good government.
And then came the punch line: “And so, my commitment to you is that you can trust me to do what I say I will do, and you can trust National under me to find solutions to our most challenging problems and to implement them in a way which takes our country forward – together,” he said.
