All Kiwis should benefit from improved outlook

new-zealand-labour-party

Fri Jan 29 2010 13:00:00 GMT+1300 (New Zealand Daylight Time)

All Kiwis should benefit from improved outlook

Friday, 29 January 2010, 1:34 pm
Press Release: New Zealand Labour Party

29 January 2010 Media Statement

Labour Finance spokesperson David Cunliffe says today’s Crown Accounts show that the recession has been shorter and shallower than forecast, with fiscal deficits now forecast for only six years, not ten.

"While there’s still a need for responsible economic management, all New Zealanders should expect to benefit from the relatively improved outlook,” David Cunliffe said.

"In hindsight we can now see the crucial role Labour's 2008 Budget played in providing stimulus of around 4.5 percent of GDP to help the economy through the recession.

"In contrast, Budget 2009 was essentially a holding operation, just deferring key decisions and throwing the full costs of future superannuation onto younger Kiwis.”

David Cunliffe says Finance Minister Bill English now faces an interesting dilemma. “He wants to make deeper cuts to new spending and must convince Kiwis to forgo services at the same time that a strong recovery is underway.

"He will therefore be tempted for political reasons to play down the strength of the rebound and overstate the impact of the recession, but doing so will risk undermining the confidence New Zealanders need to invest and build for a brighter future.

"Many hard working Kiwis families have gone without pay rises and overtime hours during the recession. Many thousands more have lost their jobs and hopes. Too many have lost their life savings to unscrupulous financiers," David Cunliffe said.

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"It is now vital that all New Zealanders benefit equitably. Growth is vital, but its fruits should not be limited to the top earners who were the main beneficiaries of last April's tax cut, and who stand to gain the most in the current tax review.

"2010 is the year for key policy decisions that address the structural weaknesses in our economy in a balanced and sustainable way."

David Cunliffe said the latest accounts also underlined National’s short-sighted folly in imposing a decade of deferrals of contributions to the Super Fund. “Figures revealed by the Fund just last week show it has grown 17.44 percent already this financial year.

”The Government’s decision has cost us tens of millions of dollars, even without taking into account the cost of having to borrow in the future to pay for New Zealand Super because of what National hasn’t put aside.”

ENDS

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