John Key MP
National Party Finance Spokesman

22 April 2005

Michael Cullen's spending nightmare

"Labour's reckless spending on a growing bureaucracy is starting to give Michael Cullen nightmares, but it's the rest of us who will be haunted by Helen Clark's legacy," says National Party Finance spokesman John Key.

He is referring to more evidence produced today that shows Labour's spending on the bureaucracy, particularly through its retirement schemes, is threatening to create a public sector cost blow-out.

The scheme was initially costed at $24 million a year, but a Treasury report issued in 2003 warned that it could easily blow out to more than $200 million a year.

"And that's before Trevor Mallard's planned expansion of the programme.

"There's potentially a huge fiscal liability here and it's no wonder Treasury are beside themselves," says Mr Key.

Even though Labour has tried to hide the size of the problem in documents released this year, that 2003 Treasury report warned the Government it was being over-optimistic.

"Labour is spending like there's no tomorrow. It has been employing civil servants left, right and centre and giving them pay rises that are out of kilter with the private sector.

"It's becoming evident that Labour's misdirected spending is driving up inflation, fuelling mortgage interest rates and damaging our longer-term economic prospects. They're squandering New Zealand's opportunity. It's a criminal waste," says Mr Key.

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