Source: ACT Party
ACT Leader David Seymour to the Waikato Chamber of Commerce: Budget 2025 and Beyond
Thank you for the opportunity to be here, and hear from you today. Wherever I go, and I’ve said it here in Hamilton before, I say business is a beautiful form of human cooperation that too many people demonise.
Thank you for being in business. Bringing together ideas, investment, workers, and customers is almost magic. It means people can achieve together what they couldn’t do alone. That’s what I mean by beautiful, voluntary, human cooperation.
Every year, Government sets a Budget. Every three years, the people elect a new Parliament. About every six-to-nine years, the Government changes, but the real change is invisible at the time.
Politics has a rhythm that could put you to sleep, if it wasn’t so maddening: headlines, hot takes, and handouts. At least that’s what it seems like in the moment. But when you look back at politics a generation or two ago, you can see it was actually going somewhere.
What’s difficult is looking through the now, and seeing backwards from the future. How will today look in your children’s rear view mirror? What big trends were we part of, whether we realised it or not? What things will we wish we’d spent more time on, even if they don’t stand out right now?
If this sounds familiar, it should. Politics, like business, is just another extension of life.
New Zealand is in the middle of a repair job. After years of economic mismanagement and runaway spending, the Government is patching the roof while the rain still falls. But a team that’s always rebuilding never lifts the trophy. That’s why we need to move from recovery to victory.
My speech today is about acknowledging where we’re at, and feeling today’s very real challenges. But, it’s also about asking what choices we need to make if we’re going to look good in our children’s rear view mirror.
There are lots of answers. Mine is cultural. We’ll only build a winning economy for future generations is if we restore freedom and personal responsibility to the individual, and reward effort and innovation.
If you get those values right, and have agreement on the values, the policy choices can be easy.
Budget 2025 and ACT’s influence
Anyone who’s read one of ACT’s alternative budgets knows we’d like to spend less than the coalition. It’s also true that the coalition spends less than the other parties would without ACT.
We’ve been identifying savings and instilling fiscal discipline. Collectively, our Ministers have saved current and future taxpayers billions. Brooke van Velden saved the most. Her long-overdue changes to a broken pay equity system didn’t just save the budget, they are good policy. No country got rich by inventing more complicated ways to argue with itself.
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.
Not many MPs would have the guts to take this on, but Brooke is an ACT MP. We’re willing 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.
While it doesn’t go as far as we’d like, in many ways this budget reflects ACT’s values: freedom, responsibility, growth, and efficiency. It reduces the share of the nation’s economic pie consumed by Government and redirects spending to areas that generate long-term prosperity.
Inflation is currently 2.5 per cent and the population has grown 0.9 per cent in the last year. That means our country’s inflation plus population growth is 3.4 per cent.
If the Government’s Budget grew by 3.4 per cent, it would grow by $4.9 billion. The question is, does this Budget increase spending by $4.9 billion?
No, it does not. It increases by a fraction of that. This Budget increases spending by $1.3 billion. That’s a 0.9 per cent increase.
When the Government reduces its share of the economy, there is more for the firms, farms, and families of this country to consume.
Debt remains the biggest issue for the future of our country though. Government spending has a diabolical power: time travel. It borrows today and sends the bill into the future, landing with children who are learning their ABCs this afternoon.
Our national debt is now $175 billion, heading past $200 billion by 2026, and $234 billion by 2029. That’s $46,800 per New Zealander.
Debt is rising by $2 million per hour, or $48 million a day.
The status quo is not sustainable. We cannot keep borrowing at the expense of the next generation.
Cutting waste, reinvesting in what matters
Savings in this budget have been substantial. Take public broadcasting – $18.4 million cut from RNZ. Or the end of the EECA, a department which tells people what they already know, energy is expensive. That saves $56.2 million over four years.
Then there’s the $375.5 million saved from scrapping Communities of Learning – a failed concept that pulled teachers out of classrooms.
Other examples include Kiwisaver subsidies for those already well-off – halved and means-tested. Bilingual towns and climate resilience grants funding – eliminated.
We’re also saving money by returning responsibility to Kiwis. Tightening benefit eligibility for 18-19 year olds saves $163 million, but it also promotes the value of work. Many teenagers who might have been going down a pathway of benefit dependency will now learn the value of providing for themselves instead. There will also be more aggressive recovery of court fines and legal aid debt, because responsibility goes both ways.
These savings are not all cost-cutting, they’re a change in priorities. Every dollar saved is a dollar redirected to what truly matters: education, infrastructure, security, and growth.
Policies that unleash growth
At the heart of this Budget is a new 20% capital asset deduction for business investment.
If you’re a farmer upgrading milking machines…
A restaurant expanding its kitchen…
A startup buying lab equipment…
A logistics firm improving software systems…
You’ll now get to write off 20% of tax from those capital investments immediately. Treasury estimates this policy alone will lift wages by 1.5% by the time today’s children enter the workforce.
Why? Because investment drives productivity, and productivity drives higher wages. When people can reinvest more of what they earn, a virtuous cycle begins. Investment → productivity → profits → reinvestment → higher wages. The best part is that the Government just gets out of the way.
I’ve heard some people complain that there is no cap on the policy, which might be the first time I’ve heard people upset that a policy might be too successful. The fact is that if the level of investment exceeds Treasury’s calculation then that is a good thing. Sure, it won’t be taxed as much as it would have previously, but that investment would likely have never entered the country otherwise.
Spending on what’s important
This Budget rightly focuses on the basics, and nothing is more basic than security.
ACT has long called for Defence spending at 2% of GDP. This Budget makes progress, with a $500 million boost to Defence and Foreign Affairs. In a volatile world, alliances are our best defence. Peace through alliances beats peace through strength.
At home, we’re investing in law and order. Nearly half a billion dollars to lock up the worst offenders. Because if you think prison is expensive, try the cost of letting criminals roam the streets.
If there’s one long-term investment that always pays off, it’s education.
The Budget includes $140 million to boost school attendance, and new investments in maths and learning support. We’re addressing the legacy of poor education policy head-on.
Parents who choose private schooling, often making real financial sacrifices, will now receive more equitable treatment. Their GST bill is higher than the government support they receive, and that’s not fair.
What next?
This Budget doesn’t go as far as ACT would, but we’re proud to support it because it’s pregnant with our values. It gives more resources and choices to the people, compared with government.
It focuses on growing the New Zealand economy, rather than government spending. It gives a ray of hope, that New Zealanders can achieve their potential in a place where your efforts make a difference.
That’s the good news. This budget is a reset from the tax, borrow, and spend years. We might have won a battle but it’s a long war to reclaim New Zealand’s economic prosperity.
Interest on debt is now a major expense in its own right, at $9 billion per year. Interest costs more than police and prisons combined, or about as much as primary, intermediate, and secondary schooling.
That’s because the debt is nearly $200 billion, and welfare is over $50 billion a year. Nearly half of that is pensions, which rise by a billion and a half each year as more people retire and live longer. Put it another way: $50 billion is nearly $10,000 per person. If you’re in a family of four that is not getting $40,000 of taxpayer cash a year, you are below average.
Health spending is up $13 billion in seven years, but results have been getting worse for years now. We could go on, but the point is the Government is currently borrowing $14.7 billion a year, and its plan to borrow only $3 billion in four years’ time depends on nothing going wrong for four years. What we’re doing is not sustainable.
The options are either:
- Tax more, such as the Green’s and Labour’s wealth or capital gains tax
- Keep borrowing and see what happens (some people genuinely think this is the answer)
- Spend less.
If we do nothing, it is a matter of time before the left gets back in and defaults to option 1. More taxes that are tall poppy syndrome in tax law. Your problems are caused by others’ successes, the story goes, and your solution is to take their money. It will deaden our society from the inside out.
Option 2 is the road to some sort of banana republic status. The problem is some would default to it through inaction, and some others think using debt is actually an enlightened idea. The downward spiral from this approach goes like this:
Investors lose faith in the New Zealand Government paying back its bonds, so they demand higher interest rates to buy its bonds. That makes it harder to pay. Everyone loses and we all find our dollar goes towards a lot less than it used to. That is the spiral that so many South American and Southeast Asian countries have experienced.
If you’re not keen on new taxes, or the Government going broke, then you’re with us. The next five years of New Zealand politics will be in large part about which of the three options to choose. The Greens have set out their stall. Labour hasn’t come up with any policy since the election, but we can predict they’ll campaign on more taxes. Te Pāti Māori base their policy on TikTok trends, which admittedly is more than Labour is trying to propose.
The coalition hasn’t seriously reduced spending yet though. Even Grant Robertson was spending far less as a percentage of GDP (28%) towards the beginning of his tenure than the current Government (33%). That five-point difference equates to about $23 billion more.
There’s only one option left. If the Government’s going to balance its budget without more taxes, it’ll need to be smaller and more efficient. There’s four ways we can do that.
Zero-basing Government
Government has grown by default, not by design. We have zombie departments and bureaucracies that outlived their usefulness decades ago.
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?
What if we zero-based government?
Every department should have to answer: “If you didn’t exist, who would notice and why?”
If the answer is vague, bureaucratic, or defensive, it’s probably time to shut it down.
We would:
- Cut to 20 ministers – no associates (except Finance).
- Eliminate the bloat of 82 ministerial portfolios.
- Merge and reduce departments to no more than 30.
- Assign each department to one Minister, with eight under-secretaries as a training ground for talent.
This is not austerity. It’s clarity, on what Government can and cannot do.
Make transfers fair on every generation
Superannuation is the biggest elephant in the room.
Every year, 60,000 New Zealanders turn 65. Each generation lives longer, and has fewer children. That fundamentally changes the maths, or more specifically the dependency ratios. There are more eligible recipients for each active taxpayer.
The issue can’t be ducked forever. There’s been too much ducking already, and we’re starting to look like geese. My Party says gradually raising the superannuation age by two months per year until it reaches 67 is the right thing to do. Let’s make it fair, predictable, and, most importantly, sustainable.
Government ownership
The one thing we know is that the government is hopeless at owning things. State houses? You can tell which houses the Government owns as you drive by. Hospital projects, say no more.
If in your next life you come back as a farm animal, I hope you don’t live on a Government farm. You are more likely to die on a Government owned farm than a privately owned one, taxpayers are not the only victim of Government going into business.
Did you know you own Quotable Value, a property valuation company chaired by a former race relations conciliator that contracts to the government of New South Wales? You’re welcome.
What about 60,000 homes? The government doesn’t need to own a home to house someone. We know this because it also spends billions subsidising people to live in homes it doesn’t own. On the other hand, the taxpayer is paying $10 billion a year servicing debt, and the KiwiBuild and Kainga Ora debacles show the government should do as little in housing as possible.
There are greater needs for government capital. We haven’t built a harbour crossing for nearly seven decades. Four hundred people die every year on a substandard road network. Beaches around here get closed thanks to sewerage overflow, but we need more core infrastructure. Sections of this city are being red zoned from having more homes built because the council cannot afford the pipes and pumping stations.
We need to get past squeamishness about privatisation and ask a simple question: if we want to be a first world country, then are we making the best use of the government’s half a trillion dollars plus worth of assets? If something isn’t getting a return, the government should sell it so we can afford to buy something that does.
A regulatory reset
We also need to stop strangling our economy with unnecessary regulation.
The Regulatory Standards Bill, now before Parliament, will finally hold lawmakers accountable. Every new law will have to state:
- What problem it addresses
- Its cost-benefit analysis
- The impact on liberty and property rights
This Bill turns ‘because we said so’ into ‘because here’s the evidence.’ So if my colleagues want to tax you, take your property, or restrict your livelihood, they should be able to show you their work. This is a game-changer for transparency.
Let’s take a real-world example: earthquake regulations in Auckland. The chance of a major quake is one in 110,000 years, yet owners are forced into costly upgrades because Christchurch had a disaster. This is not rational policy.
Instead, we propose risk-based regulation, rooted in evidence, not fear. The same applies to housing. ACT fought hard to overhaul the RMA and introduce property-rights-based planning, because homes are for people, not bureaucrats.
What comes next?
New Zealand’s population will reach 6 million by 2043. That’s a good thing, but only if we create a high-performing economy that retains our best and brightest. In the year to February 2025, 69,100 Kiwis left the country. That is ambition seeking a home elsewhere.
If we carry on in this direction, we’ll become a middling Pacific Island, lamenting the opportunities we let slip.
This Budget is not the championship match, but it is a turning point.
We’ve begun the repair work. Cutting waste, restraining spending, rebalancing priorities, but the goal is not just to fix what’s broken. The goal is to build a New Zealand that’s stronger, smarter, and more secure than ever before.
A country where your effort matters more than where you were born.
Where rewards come from risk and responsibility, not red tape and redistribution.
Where the next generation doesn’t inherit a fiscal time bomb, but a ladder to opportunity.
It won’t be done in a single Budget or a single term. But ACT is committed to seeing it through, because we believe in New Zealanders. We believe that if we give people the freedom, tools, and trust to succeed, they will.
So, more than just rebuilding. Let’s start playing to win.