Labour’s twin pillars of more debt, higher taxes

Labour has given the first clues about how it would run the economy – and hard-working Kiwis should be worried, Finance Minister Bill English says.

“It’s an old-fashioned recipe of borrow and hope, tax and spend. Labour would mortgage our families’ futures to pay the bills.”

Labour leader Phil Goff has confirmed in recent days that more debt and higher taxes would be the twin pillars of his economic policy.

“We already know Labour supports an emissions trading scheme that lumbers Kiwi families with even higher bills, and it now confirms the only way it can deliver on its billions of dollars of promises is to borrow more from overseas.

“Labour does not seem to recognise that the world has changed. The large budget deficits and ever-increasing debt being promoted by Phil Goff and his finance spokesman are reckless and irresponsible.”

The fact is that this Government inherited a situation where Crown debt was forecast to increase sharply and to continue rising indefinitely. The Government has worked hard to turn around that worrying debt track.

Even so, our December forecasts predicted a $10.1 billion cash deficit this year and core Crown debt trebling to $65 billion by 2014. Yet Labour says there is no debt problem and it would continue to borrow and spend.

“The National Government makes no apologies for reprioritising low quality government spending and redirecting it into priority areas such as health, education and law and order.

“The Budget will underline this Government’s credentials as a responsible manager of worker and business taxes, with a growth plan and a tax system that better rewards hard work and enterprise. We will also produce a set of government accounts that make much better reading than those we inherited.

“By contrast, Labour will mortgage our families’ futures with a borrowing programme that saddles our children with a legacy of deficits and debt.”

ENDS

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