11 May 2011
Budget 2011: Vulnerable will shoulder costs of Government’s poor economic management
John Key has today signalled that middle and lower-income New Zealanders will be shouldering a disproportionate cost of the Government’s poor economic management, said Green Party Co-leader Dr Russel Norman today.
“John Key has signalled budget cuts to Kiwisaver, Working for Families, and the student loan scheme which will disproportionately require those on low and middle incomes to bear the cost of the Government’s fiscal mismanagement,” said Dr Russel Norman.
“Lower-income savers will likely be the biggest casualties of today’s announced changes to Kiwisaver.
“Those families living on the economic edges will be more likely now to opt out of saving for their retirement. This will exacerbate the income gap when they retire. And those who do stay in the scheme will have a smaller nest egg at retirement
“The Government is failing a simple fairness test when it comes to reigning in their record fiscal deficit — a deficit they must take responsibility for creating.
“John Key has cited the fact that KiwiSaver, Working for Families and interest-free student loans collectively cost almost $5 billion a year. Yet his package of tax cuts, which mainly benefit those on higher incomes, are also costing the Government $4-5 billion a year.
“John Key is painting this Budget as one where he has few choices but to cut public services and sell state assets to balance the Government’s books.
“Yet a majority of New Zealanders actually support obvious revenue-raising alternatives like a temporary earthquake levy as a way to more fairly pay for the rebuilding of Christchurch.
“And what’s worse, none of these proposed cuts will leave the economy in a more economically resilient or environmentally sustainable position than before,” added Dr Norman.
“New Zealand is now paying a high price for a series of poorly timed, poorly designed tax cuts that failed to stimulate the economy when we needed it most.”