Memo to Cullen: Tax Cuts drop prices

Rodney Hide Monday, 30 May 2005

- Taxation

Finance Minister Michael Cullen is falsely using the bogeyman of higher interest rates to scare people off from voting to keep more of their own money, ACT Leader Rodney Hide said today.

“Michael Cullen needs a little bit of Economics 101: tax cuts lower prices, including interest rates.

“What Kiwis have under Cullen is slow growth, high interest rates and no tax cuts.

“The recent OECD report points out the culprit: ‘Demand also continues to be boosted by a vigorous expansion in government consumption’.

“It also recommends the solution: ‘Increased business investment will help ease capacity constraints and pave the way for higher productivity growth and increasing real wages.’

“The way to have more investment is to cut taxes. Lower taxes will boost incomes and lower all prices including interest rates.

“It’s Michael Cullen’s big spending, high taxing economic policy that is driving up interest rates.

“The spending decisions made around the kitchen table and the dining table are far better than those made around the cabinet table. Kiwis deserve big and substantial tax cuts and they deserve them now,” said Rodney Hide.

ENDS

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