14 October 2008 Media Statement

Labour announces economic policies for the future

Deputy Leader of the Labour Party and Finance Spokesperson Dr Michael Cullen has today announced economic policies for the future that promote economic growth and that would deliver a fair share of that growth to all New Zealanders.

"The Labour Party has this year announced and legislated for a programme of tax cuts that by the third year will deliver $50 a week or more to around 50 per cent of all households," said Dr Cullen.

"But now is the time to take the next steps on New Zealand’s journey to greater prosperity and greater fairness.

"New Zealanders are looking for a vision for growth and investment, and a plan to make it happen. New Zealanders also know they can trust Helen Clark and Labour.

"The agenda for the next decade or more will be driven by two concepts: sustainability and productivity.

"Only Labour is committed to both these concepts and to ensuring a fair share of the fruits of growth for all," he said.

Labour’s goal is to lift New Zealand into the top half of the OECD in terms of per capita GDP. It is also to ensure New Zealand is in the top half of the OECD in terms of social and environmental measures. To ensure this happens:

- Labour will continue to lift the skills of New Zealanders particularly by implementing the Schools Plus programme and resourcing the New Zealand Skills Strategy

- Labour will maintain a twenty year plan for sustainable infrastructure development in New Zealand.
o Specifically, within that 20 year plan, Labour will:

- Set a 90% renewable electricity generation target.

- Work with local government on measures to address priority infrastructure needs at the local level

- Put in place comprehensive plans to lift New Zealand’s water quality and ensure that our water usage is consistent with long term sustainability objectives.

- Labour will support the creation of an electrified rail network for Auckland, including the North Shore and beyond.

- Labour will issue long-term infrastructure bonds which have a tax-free inflation-indexed element.

- Labour will consult with the Guardians of New Zealand Superannuation and KiwiSaver Providers on what changes to current settings would most facilitate increased investment in New Zealand by their funds.

- Labour will work with exporters to lift exports to 40 per cent of GDP by 2020 and to 50 per cent by 2030.

- Labour will guarantee annual adjustments to the minimum wage during the next term of government, so that the minimum wage at least keeps pace with increases in the average wage or the consumer price index, whichever is the greater.

- Labour has begun work on an economic stimulus package which will be implemented if the projected impacts of the global economic downturn on the New Zealand economy remain as they appear to be at the moment.

- In this case, Labour will before Christmas 2008 present to Parliament an additional economic stimulus package which will outline a plan to bring forward infrastructure spending, with particular attention to:

o Rail and roading improvements
o Local government sewerage and water projects
o Afforestation for conservation purposes
o Retrofitting and upgrading the State Housing stock
o The school and early childhood centre building programme

- Labour will for the period from 15 January 2009 to May 2010 reduce the use of money interest rate for underpayments of provisional tax to the same level as that paid for the overpayment of provisional tax. But the Commissioner of Inland Revenue will have the discretion to increase the use of money interest rate back to the normal level if he is satisfied that there has been a deliberate attempt to underpay tax.

Dr Cullen said that Labour will not respond to a more difficult fiscal environment by cutting back on public services to New Zealanders, as our opponents would do.

"New initiatives which Labour will announce prior to the election will be funded within currently projected fiscal allowances," Dr Cullen said.

For the full economic policy visit www.Labour08.co.nz

ENDS

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