The cost of living crisis is the number one issue facing New Zealand. ACT picked it first, in December, and watched party after party declare or accept there’s a crisis.

Labour was the last domino to fall, but its proposed fixes are inflationary. Cutting the fuel excise tax and road user charges might give relief, but it won’t fix the problem.

As Henry Hazlitt said “The bad economist sees only what immediately strikes the eye; the good economist also looks beyond.” So long as the excise and RUC cuts are funded by government borrowing (they are), they are increasing the money supply (or fiscal impulse).

The fuel price strikes the eye, but beyond the pump, Labour has added to the inflation of everything else by increasing its deficit spending. A similar argument can be made about Labour’s ‘cost of living payment.’

ACT on the other hand is proposing real solutions to the cost of living crisis. The Party’s latest policy document sets out nine concrete steps that could be taken to get inflation under control.

They are:

Dump the remaining $200m of tariffs on imports. Consumers pay $200m on goods from makeup to chocolate biscuits to chardonnay and clothes. ACT estimates removing tariffs could take $20 off a school uniform. (ACT would also cut spending to reduce the deficit overall).

Dump the labour market test from the Accredited Employer Work Visa scheme. Only Labour would make every employer individually prove there is a shortage of workers in New Zealand. It’s nuts and should go so firms can get workers.

Allow foreign supermarket chains from OECD member countries to bypass the Overseas Investment Act, bringing real competition to our supermarket sector. Labour complains about the duopoly, but the Overseas Investment Office stands ready to repel any competitor at the border. Insane.

Create a Materials Equivalence Register, forcing councils to accept substitutes for scarce material such as plasterboard. We need to reduce costs and bring down delays for building. Products have to get through 67 Territorial Authorities building consent processes to serve five million customers, and then we wonder why there’s no competition!

Incentivise councils to build by sharing GST with them, but only if they say yes to residential development, building more plentiful homes for the next generation and bringing down prices. It’s not surprising councils hesitate to allow development when they get all the costs and central government gets all the revenue.

Cut taxes (and government spending) for every earner, including $2,185 for an average full-time worker, with a two-rate tax structure: 17.5 per cent up to $70,000 and 28 per cent thereafter, together with a Low- and Middle-Income Tax Offset. As well as provide Kiwis with a Carbon Tax Refund. People need a way to balance their household budgets in light of the last year’s inflation.

Replacing the RMA with a fit-for-purpose law where only those whose property is directly physically affected can object to development, allowing vital supply chain infrastructure to get built. When anyone can say no, someone does more often than not. Port of Tauranga’s struggle to do a minor expansion is a perfect example of why we can’t have nice things.

Give the Reserve Bank Governor real targets. The Policy Targets Agreement used to tell the Governor ‘hit this target by this quarter or you’re fired.’ Now it says achieve this target in the ‘medium term’ while having regard to five other things. He’s accountable for everything and nothing, and it’s cost Kiwis billions.

Cut wasteful spending by $7.8 billion to stop the out of control inflation that we face. So long as the public sector is competing for resources, the battle against inflation will be all the harder for households and firms.

What’s exciting is that we could have a Government driven by ACT that would actually act on ideas like these. A Government that believes in cause and effect thinking, that we can change our future. The election is around 15-months off, and Free Press relishes the contest.