Newshub: ACT’s Brooke van Velden calls for beneficiaries, public service workers to take pay cut
The ACT Party’s deputy leader is calling for public sector workers and beneficiaries to take a pay cut in order to help lower debt levels.
Brooke van Velden was laying out the party’s ‘Alternative Budget’ in an appearance on Newshub Nation on Saturday, and says ACT’s approach will help New Zealand recover from the economic fallout of COVID-19.
The party’s policy includes abolishing the winter energy payment, scrapping KiwiSaver subsidies and putting interest back on all student loans.
Van Velden says lowering New Zealand’s debt post-COVID-19 is important because it’s unknown when another event will happen that requires a large sum of money.
“There are two ways we can go about this recovery: we can have a debt recovery or we can have a growth recovery.”
ACT proposes public service employees should have their “over-inflated wages” cut by 20 percent, and benefits would be lowered back to pre-COVID levels.
Van Velden and Seymour may well be right. The Government has implemented a number of policies by stealth under cover of $50 billion Covid financial package.
The Government has previously defended it’s COVID-19 spending, with Finance Minister Grant Robertson saying it’s “fiscally and socially responsible” to have money set aside in the event of a second wave.
“We are sticking to our word on this. We are investing money where it is needed to respond to COVID-19, and we are setting aside a significant sum of money to be used as needed in the future,” he said in July.
There is no doubt majoe financial support was needed to try to minimise the adverse financial effects of Covid, but I think there are valid questions about a lot of the spending. Some of the spending announcements seem to have been opportunist policy financing of things that weren’t being addressed by the Government before the pandemic.
But Bagrie is probably also correct. Many beneficiaries have struggled for a long time on subsistence incomes. This has had significant adverse effects on the welbeing of families and children, and also on health, crime and education.
And substantially reducing benefits and wages now would be a huge risk given our precarious economic situation. I think that would be nuts.
It’s going to be a huge challenge for the next term Government to deal with the big increase in spending and debt, but slashing benefits and wages would be nuts in my opinion.