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ACT Leader David Seymour: Address to Craigs Investment Partners Auckland
Introduction
Thank you to Craigs Investment Partners for hosting me today.
Every three years, we elect a new Parliament. Every year, we get a new Budget. And every Budget brings a flurry of headlines, hot takes, and handouts. But too often, what’s missing is a long view, a vision that extends beyond the next fiscal year, the next election, or the next political sugar hit.
In other words, instead of looking towards the next election, we should be thinking about the next generation.
Right now, New Zealand is in the middle of a repair job. After years of economic mismanagement and runaway spending, this Government is trying to patch the roof while the rain still falls. ACT supports that effort. But we also ask a bigger question: what comes next? Not just in the next quarter or the next Budget, but in the next few decades.
Because building a stronger economy starts with a long-term economic vision. A vision that restores freedom and personal responsibility to the individual, and rewards effort and innovation.
In a week’s time the Government will be revealing Budget 2025. It will detail the Government’s specific spending and revenue choices, key new infrastructure investments, the path for borrowing and debt and our plans for strengthening the fundamentals of the New Zealand economy.
New Zealand has gone through a tough few years of high inflation, high interest rates and little to no real growth. The Government has been running big deficits and accumulating debt. I’m proud to be part of a government that is slowing the spending of previous governments and making savings so we can fund the things that are most important.
Inflation and interest rates have been beaten back. Government doesn’t control every factor influencing them, but we can control our own spending. The Government’s commitment to spend less and maintaining that discipline over four years has helped win the war on inflation and interest rates.
Last week, Brooke van Velden MP made long-overdue changes to a broken pay equity system. As usual, Labour and the unions responded with scare tactics and misinformation. The fact is that Brooke’s changes bring back common sense. Pay equity claims will still be possible – but they’ll need real evidence of discrimination, not assumptions. That means a system that’s fair, workable, and sustainable for the long term.
The reason I bring this up is because Brooke’s fixes will have major budget implications, billions of dollars that balance the books and allow investments in important areas like health and education. She’s managed to do it in a way that means claims can still progress in cases of genuine sex-based discrimination – but if you’re a librarian looking to get a pay rise comparable to a fisheries officer then you’re out of luck.
Not many MPs would have the guts to take a controversial piece of work like this and progress it for the greater good. Brooke has shown what ACT is bringing to this Government – a willingness to take on tough issues and stand by our principles. This approach needs to be replicated and applied across a wider range of issues in order for New Zealand to tackle long-term issues.
Looking beyond a four-year cycle
Next week’s budget will take another step in the right direction for economic recovery. But while short-term repair is essential, we also need a long-term vision. What happens beyond this four-year cycle?
Previous Labour Budgets offered headline-grabbing sugar hits, ‘Wellbeing Budgets’ that felt good in the moment but lacked staying power, they essentially worked to pick a group, give them some money, and promote their generosity. The point that was often missed was that to give money to that group someone else had to stump up, probably your children and grandchildren. Now, this Government is carrying out the hard, necessary work by cutting unnecessary spending and reinvesting in core areas. But what comes next?
When it comes to government spending, New Zealand is standing on a burning platform. Last year, even as our population grew slightly, thanks to births and inbound migration, our economy shrank by one percent.
But here’s the real kicker: $10 billion of what the government spent was just to pay interest on existing debt. And next year? We’ll pay interest on the interest. The consequence? Government debt is forecast to soar past $200 billion in 2026.
Our national debt is growing by almost $2 million an hour, or more than $47 million a day.
As of the first quarter of 2025, New Zealand’s unemployment rate stands at 5.1 per cent, the highest in 4.5 years. Employment growth is minimal, and wage inflation has decelerated. At the same time, the doubling of debt we saw under the previous government is the new normal with $234.1 billion in debt by 2028/29, that’s $46,800 for every man, woman and child in this country today. The opposition is quick to deny responsibility. But let’s be real – it was under them debt went from 20-40 per cent of GDP. We are now projected to see a slowing and a decline. It was under Labour that inflation rose to 7 per cent and hollowed out the economy, it is under us that we have seen it come down to the usual low levels.
This is not sustainable. Not if you want your children and grandchildren to experience the same opportunities you once had.
And the challenges don’t stop there. There’s a demographic tailwind in our population growth, that’s becoming a headwind when it comes to balancing the books.
Our population is aging fast. Every year, around 60,000 people turn 65 and become eligible for superannuation.
We cannot keep ducking the big questions. Because what’s coming is not just a fiscal ripple, it’s a tidal wave that will envelop the country.
The global economy is more interconnected than ever before. As a small, open economy, New Zealand won’t escape the next global shock.
When Grant Robertson cranked up the money printers, blame was levelled at Putin, Covid, and cyclones. But crises are a fact of life, not an excuse for policy failure. It would be too easy for this Government to blame Trump. But a resilient country must be prepared regardless of who or what is happening around them.
In the 1990s, New Zealand demonstrated that resilience. Years of smart fiscal policy took our net core Crown debt from 55 per cent to just 5.4 per cent by 2008. Critics called it ‘austerity.’ But they’re still crying austerity when debt is 42.5 per cent. In 2019, pre-Covid, Jacinda Ardern’s Government was spending 28 per cent of GDP. In 2024, spending was 33.1 per cent of GDP. I don’t recall Labour being accused of austerity. But journalists and commentators find the current Government guilty of austerity when it spends 5 per cent of GDP more. Get real.
When the Global Financial Crisis and Covid hit, we were ready. Fast forward to today. That 5.4 per cent is now 42.5 per cent. Net core Crown debt has exploded from $10.3 billion in 2008 to over $175 billion today.
How did we get here?
Well, the simple answer is out of control spending from irresponsible governments. We’ve been here before. After the Muldoon Government’s reckless spending nearly bankrupted the country, it took the Lange Government and Sir Roger Douglas’s economic reforms to steer us back from the brink.
Growth and ambition
New Zealand’s population is expected to reach 6 million by 2043. That’s a good thing. We should be encouraging our best and brightest to stay, and welcoming innovative minds from around the world. We have the wide-open spaces and natural beauty to attract people, but not the ambition or economic opportunity to retain them judging by the roughly 69,100 New Zealand citizens choosing to leave in the year to February 2025.
We’ve tried spending more and the result was more debt and many of the same problems. In fact, if there’s one thing Grant Robertson taught us all it’s that we can’t spend our way out of this mess. Without radical policy change, there is no plausible path that avoids long-term fiscal and social collapse.
So what can we do?
Smaller, smarter government
We should make government itself more efficient. Fewer ministers, fewer departments, and clearer accountability. New Zealanders don’t need 82 portfolios to live better lives. They just need a government that does its job, and then gets out of their way.
It’s a shift away from the idea that the government exists to solve every problem by creating a minister named after it. And towards a view that the government’s job is to manage your money responsibly and provide core public services that allow you to go about your life, respecting your property rights.
If the Government was truly focused on outcomes rather than optics, we’d have fewer ministers but higher standards. We’d have fewer bureaucrats, but better services. We’d be empowering New Zealanders to make their own decisions, not adding layers of officials to make them for us.
Our proposal is to have:
- Only 20 Ministers, with no ministers outside cabinet
- No associate ministers, except in finance
- Abolish ‘portfolios’, there’s either a department or there’s not
- Reduce the number of departments to 30 by merging them and removing low-value functions
- Ensure each department is overseen by only one minister
- Up to eight under-secretaries supporting the busiest ministers, effectively a training ground for future cabinet ministers
More personal choice in education and health
A lot of the biggest problems we face as a nation can be solved by ensuring the next generation has access to a great education.
While our Government has made a lot of improvements in this area, banning devices that were destroying children’s concentration, bringing back charter schools to ensure there is more flexibility and choice in the system, and returning logic and common sense to the curriculum in key areas like literacy and numeracy, many parents still ask, how do we spend $330,000 on every child’s education and still get these results?
What if we gave New Zealanders a choice?
With $333,000 per student over a lifetime, how many families would choose a better option if they had control over that money instead of handing it over to the Government. Like a KiwiSaver account, parents and students would be able to see the balance of funding that is available and make choices about how to fund an education.
It is taking power away from the bureaucracy and back to the people. The only way to ensure New Zealand’s schools become leaders rather than laggards is to have an education system that is responsive to parental demand rather than political orthodoxy.
We can apply the same concept to the health system. How do we spend $6,000 per citizen annually on health, and still end up on waiting lists?
What if every person could opt out of the public health system and take their $6,000 to buy private health insurance? Many would. And many would be better off.
We shouldn’t have a default position of tax and spend for every public service. If the past few years have taught us anything it’s that taxing and spending more doesn’t lead to greater outcomes. Giving people greater control over their own lives would bring about real change.
Zero-basing government
We need to stop assuming government departments and activities should continue because they always have. It’s easy to think of New Zealand companies that no longer exist. Anyone shopped at Deka lately? Read the Auckland Star? Got a loan from South Canterbury Finance? Had Mainzeal put anything up for you? Anyone here had a night in thanks to Video Ezy this decade?
For a variety of reasons those national brands along with a lot of other local businesses are gone. Basically, if they don’t deliver better than anyone else could, they go. But when was the last time you heard of a government department being surplus to requirements and closed down?
How many zombie departments and zombie bureaucrats does this country have? People who just carry on collecting a pay cheque for their own purposes instead of any public purpose. Why do we put up with the idea that government can get bigger, but it can never get smaller?
ACT says we need to zero base government. By that I mean going back to zero and asking ourselves, if the departments and bureaucracies we have now didn’t exist, would we establish them today?
We would ask every department to answer the simple question; if you didn’t exist, who would notice and why?
The justifications will have to fit with a robust view of what government can, and can’t, do.
- Can the private sector provide this service?
- Is there a genuine conflict between citizens’ interests that cannot be resolved without government intervention?
- What are the costs and benefits of this activity, and do the benefits outweigh the costs?
The size of government would be reduced dramatically by eliminating activities that don’t fit with these simple questions.
Tackling the hard conversations
We need a serious conversation about the future of retirement income. Not because it’s easy, but because it’s essential.
We need to face facts on superannuation. People are living over ten years longer than they were two generations ago, and they are having fewer children to pay taxes for superannuation. That means we need to consider whether our current approach is fair or sustainable. This could mean increasing the age by two months per year until it reaches 67. Someone who is currently retired would see no difference from this policy. Someone who is currently 64 would be eligible for superannuation two months later than currently planned. Sooner or later, a Government will need to address this.
The Winter Energy Payment makes a big difference for a lot of Kiwis, but for a lot more it lands in a special account that gets put aside for a holiday fund. Why don’t we ensure that the Winter Energy Payment went to those who needed it. It could be restricted to over-65s who hold Community Services Cards and recipients of main benefits.
Then there’s the corporate welfare. It took political courage for Sir Roger Douglas to ditch the agriculture subsidies and ask farmers to embrace the market. Looking back, I don’t think you’d find a farmer who wouldn’t agree that it was the right decision.
Why don’t we just let people keep more of their taxes and spend and invest their money the way they’d like to?
Between health, education, pensions, and welfare you have around $95 billion, a massive chunk of the government’s budget. The question isn’t whether we’re spending enough in these areas, it’s how we can find more productivity growth so New Zealanders get better services.
Cutting red tape
Housing and infrastructure costs are out of control not because of material costs, but because of government regulation. The RMA, excessive building codes, and earthquake regulations are driving prices sky-high. Reform is long overdue.
The Government is doing a huge amount of work in this area, most importantly by delivering a property rights based RMA – a concept ACT has fought hard for.
Long term, there will need to be a change in attitude when it comes to lawmaking. The Regulatory Standards Bill is one tool to do this, bringing transparency to lawmaking so when a politician makes a silly populist law, they’ll need to justify it to the public.
I think the Regulatory Standards Bill could have prevented many of the issues we’re dealing with today. Take earthquake regulations. In Auckland the chance of a major seismic event is roughly one in 110,000 years, yet property owners there are still being forced through costly assessments and upgrade requirements designed for high-risk areas.
It makes no sense. These one-size-fits-all rules are driving up costs and pushing down property values without delivering meaningful safety benefits. Instead of scaring owners into unnecessary spending, good policy would have adopted a risk-based approach that targets genuine seismic threats, not bureaucratic box-ticking.
These law changes are costly, mainly in lost productivity for decades to come. The Government’s default position should be not to regulate. Regulation should be the exception, not the rule. We must trust people, not bureaucracy.
The challenge
If we carry on in the current direction, we won’t remain a first-world country. We’ll be a middling island in the Pacific, lamenting the opportunities we let pass us by.
There is a way forward. But it starts with honesty.
We must rebuild New Zealand as a country that works, not just for today, but for generations to come. That means putting power back in the hands of people. That means cutting waste, reforming entitlements, and restoring ambition.
It means choosing freedom over control, responsibility over excuses, and aspiration over resentment.
