29 May 2006

"Digger" Don digs himself deeper into trouble

National leader Don Brash continues to peddle the myth of a brain drain to Australia as he clings to the notion that tax cuts are a panacea for economic growth, Finance Minister Michael Cullen said today.

"In fact National twice cut personal income taxes in the 1990s – in July 1996 and July 1998 - and migration to Australia still accelerated.

"In the year to June 1999 32,000 people left New Zealand for Australia, compared to 23,000 in the year to June 1996.

"During the nine years National was in power 218,000 Kiwis departed for Australia. That is equivalent to the population of Tauranga, New Plymouth and Hastings. But the reasons for leaving are far more complex than suits National.

"Dr Brash would have been wiser to have read Treasury research in 2001 before writing today's speech. Treasury concluded there is no brain drain. People who migrate to Australia tend to be a cross-section of the labour force. In other words, the proportion of highly skilled workers who leave is roughly the same proportion of the New Zealand workforce.

"New Zealand is also currently gaining around 10,000 people every year through net migration overall. This is significantly above the 4500 average of the last 20 years. Migrants tend to be more highly skilled than those who are leaving. So not only are we gaining more people on average under this government, we are gaining skills.

"I am pleased Dr Brash today voiced his support for the Budget 2006 road building announcement. The trouble is he wants more spending on roads, a high quality health care system and multi-billion dollar tax cuts. He can't have it all. Something has to give. It's high time he told us.

"It's been eight months since the election and still we have seen nothing from the National Party on its grand plan – no detail, no numbers, not even an alternative Budget.

"In reality, Dr Brash's reckless prescription for economic growth based only on tax cuts will mean less spending on essential social services and more borrowing. His plan will force up inflation and interest rates and inflict pain on exporters. Now that is a plan to drive New Zealanders to Australia," Dr Cullen concluded.

ENDS

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