Bill English MP
National Party Finance Spokesman

8 October 2008

Economic plan: No added borrowing, no service cuts

National’s Finance spokesman Bill English says the party’s economic management plan begins to improve the Crown’s financial position and the longer-term productivity of the economy through careful revenue and spending initiatives.

“National will not slash spending at a time when people are looking to the government for a sense of security. In developing our economic management plan, we have concentrated on the fundamentals of the economy, and particularly on laying the foundations for a future increase in productivity.

“We are also beginning to peg back the operating deficits revealed in the pre-election fiscal update.

“New operating allowances will be the same for National over the next three years as they would be under Labour. National’s rebalancing of the tax system is self-funding and requires no cuts to public services or additional borrowing.”

Mr English says over the next term of government the total cost of National’s personal tax cuts is balanced by the revenue savings from:

1. Changes to KiwiSaver.

2. Discontinuing the R&D tax credit.

3. Replacing Labour’s proposed tax cuts.

“Overall, our fiscal policy does not result in any requirement for additional borrowing over the medium term.

“In light of the recent sharp decline in the New Zealand economy and the marked increased in debt signalled in the Prefu, National has also phased the implementation of its infrastructure spending over the first three years to avoid putting additional strain on the Crown’s fiscal position.

“The impact of international financial market turmoil has been exacerbated by imbalances in New Zealand's economy that were already apparent.

“Increased infrastructure spending will help address some of these imbalances. It will be an important part of sparking growth in the economy over the next few years. It will also be a key factor in improving the productivity of the New Zealand economy as we begin to move out of this recession and into a period of growth.”

ENDS

Fiscal_Policy_Paper.pdf

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