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The National Partyβs economic plan, as outlined in their 2023 platform, focuses on "rebuilding the economy" with measures like personal income tax cuts, reducing government spending, and reversing certain Labour-era regulations (e.g., lifting the ban on offshore oil and gas exploration).
They argue this will stimulate growth, ease cost-of-living pressures, and attract investment.
For instance, their "Back Pocket Boost" tax relief policy promised an average of NZ$24.85 weekly for a single earner with no childrenβabout a 2.4% increase in take-home payβfunded partly by cutting what they call "wasteful spending."
They also aim to refocus the Reserve Bank of New Zealand (RBNZ) solely on inflation control, dropping its employment mandate, which some analysts suggest could lead to tighter monetary policy.
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On the flip side, criticsβlike the Green Partyβcontend that these policies disproportionately favour higher earners and property investors while neglecting low-income households and environmental sustainability, both of which are tied to long-term economic health.
For example, Nationalβs housing policy has historically been criticised for not addressing supply shortages aggressively enough.
Analyses point to their tendency to scale back state-led housing programmes (e.g., Labourβs initiatives), which could exacerbate affordability issuesβa key economic stressor given New Zealandβs high house prices and rents.
Moreover, reversing the oil and gas exploration ban might boost short-term GDP but risks locking in fossil fuel dependency, potentially clashing with global trade trends favouring green economies.
Historically, Nationalβs track record offers mixed evidence. The "Ruthanasia" era under Jim Bolger in the early 1990s saw aggressive welfare cuts and privatisation, credited with 4% growth by the mid-1990s but also blamed for widening inequality and social unrestβfactors that can undermine economic resilience.
Conversely, the Muldoon years (1975β1984) saw interventionist policies (e.g., "Think Big") that ballooned debt to 95% of GDP, leaving the economy vulnerable by 1984.
These examples suggest that Nationalβs approach can swing between growth-oriented liberalism and costly overreach, with outcomes depending heavily on execution and external conditions.
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Todayβs contextβhigh inflation (6% in 2023), a current account deficit, and a budget in deficit since 2019βcomplicates things.
Nationalβs tax cuts and deregulation might stimulate activity, but if fiscal prudence slips (as some fear with reduced revenue), debt could climb further.
The RBNZ shift could tame inflation but risks stifling job growth, especially with a labour market already softening.
Critics also highlight that cutting public services to fund tax relief could strain healthcare and education, indirectly hitting productivity.
So, are Nationalβs policies detrimental? Itβs not a clear yes or no. They aim to juice short-term growth and individual incomes, which could lift economic wellbeing for some.
But the trade-offsβpotential inequality, housing woes, and environmental costsβmight erode broader, long-term prosperity, especially if global markets punish carbon-heavy economies or if domestic disparities deepen.
The real test lies in how they balance these priorities in practice, not just on paper.
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