ACT is facing criticism from across the aisle over health and disability cuts in its fiscal plan, and copping friendly fire after criticising National’s Finance spokesperson Nicola Willis.
Defending her record, Willis says she has delivered a significant fiscal repair job despite global headwinds – as well as ACT policies like the Regulation Ministry, charter schools and housing funding for councils.
ACT released its fiscal plan on Sunday at a photography studio on Auckland’s Karangahape Road, promising to lift the retirement age and bring the books back in order faster.
In his speech and media standup, leader David Seymour repeatedly criticised the government’s government’s economic handling over the past three years, saying the “fiscal blowout during Covid … has not been repaired” and warning that spending remains closer to the height of Covid spending than to the pre-Covid finances he wants to get back to.
“What is needed is political leadership on the big cost drivers.”
Unlike previous ACT fiscal plans, it opts for “small and strategic” cuts to taxes rather than broader-based income tax cuts, with Seymour saying it was “irresponsible to cut taxes when you’re borrowing money against your children’s taxes”.
That’s the same argument put forward by Willis about why this is not the time for further income tax cuts. While he did not name her, the government this term continued borrowing while also delivering the tax cuts Willis had promised at the last election.
He said the Pre-election economic and fiscal update (Prefu) set out a surplus in two years time – but so had the Prefu from 2023.
“If we don’t start doing something different with some courage and some leadership, Prefu 2029 will also say the government’s going to be in surplus two years later.
“John Key and Bill English are looking better and better, and Helen Clark and Michael Cullen look better still,” he said. “This country has drifted so far to the left, the ACT Party is left a little bit like England in May 1940 as the only ones holding the line for sanity.”
“We agree with the need to focus on careful spending and debt reduction. However, our approach will prioritise more funding to ensure frontline public services are resourced to respond effectively to an ageing and growing population,” she said.
“The Pre-election Economic and Fiscal Update showed a credible path to balanced books and debt reduction proving we have delivered significant fiscal repair despite global headwinds. This reflects National’s efforts to reprioritise wasteful spending, with savings averaging about $12 billion a year.
“This repair job has been accomplished even while accommodating the significant spending needed to support ACT’s policies including a Ministry for Regulation, a charter schools’ agency and housing funding for local councils.”
The party’s plan would also cut disability benefits by $653 million dollars over four years.
Semour said ACT would require independent medical certification against clear criteria for health and disability benefits.
“People who are genuinely disabled and don’t have a chance to get to work, they should be looked after well – I’ve always believed that,” he said.
“But you can’t tell me that we’ve had a massive blowout in mental health problems and sickness over the last six that explains the increase in people who supposedly can’t work.
“Now, there’s one of two failings: either New Zealand has become a much sicker place in the last seven years, or we have got a lot worse at managing and helping people who could be working. And I suspect it’s the latter,” he said.
He said he was not worried about pushback from disability communities in response because “people who are genuinely disabled are tired of having to go and prove that they’re disabled every year”.
Independent disability advocate Jane Carrigan said it would be a “vicious blow” to people who relied on those benefits.
“I’ve always found ACT to be quite helpful in supporting people with disabilities who have problems, so I’m particularly disappointed that such a proposal is coming from them, and the social welfare sector has been beaten around the head by its current minister … frankly, looks like a race to the bottom.”
“What will that money go towards? What, new roads filling in a few potholes? It’s just, yeah, it’s my personal view is it’s obscene.”
The Green Party accused ACT of cutting support for disabled people to hand more money to the super-rich.
“This plan continues to shovel money upwards, starving everyone else,” Green Party co-leader Chlöe Swarbrick said.
“The cutting of KiwiSaver Government contributions and removal of tax on gains will most benefit the richest, and they know it.
“At the same time, ACT is saying the quiet part out loud, budgeting cuts worth hundreds of millions of dollars to support for disabled people. These New Zealanders are often on the lowest incomes and have already had support cut by this callous Government.”
Labour’s finance spokesperson Barbara Edmonds said ACT was “punching down” with its fiscal plan.
“ACT is proposing nearly $10 billion in cuts, including scrapping some ministries and reducing funding for foreign aid and environmental programmes.
“He also wants to end annual Government KiwiSaver contributions for eligible workers, raise the superannuation age to 67 and cut disability entitlements.
“New Zealanders deserve to know exactly who will be affected and what support they’ll lose.
“Overall, its just cut, cut, cut,” Edmonds told RNZ.
Opportunity leader Qiulae Wong said ACT must explain how they intended to deliver a $100-a-household carbon tax refund when the government’s carbon auctions had not generated any revenue since 2024.
“ACT has budgeted $200 million for its carbon tax refund in 2027/28, but the most recent ETS auction attracted no bids at all. You can’t refund money you haven’t collected,” she said.
“ACT needs to explain what assumptions underpin its $200 million forecast, and whether households will receive anything if carbon auctions continue to fail.”
An ACT spokesperson said the reason auctions are not clearing is because the Government currently refuses to sell carbon units below $75, while they currently sell on the secondary market for around $51.
“ACT’s policy removes the price floor, meaning that the Government would be able to sell units at the market price, earning revenue, which it would give back to Kiwis through a carbon tax dividend.”