INDEPENDENT NEWS

It’s About Growth And Disciplined Spending, Not Borrow, Borrow, Borrow

Published: Fri 24 Jul 2020 11:31 AM
The best path back to prudent levels of debt in a decade or more is an absolute focus on economic growth, combined with disciplined spending, National’s Finance Spokesperson Paul Goldsmith said today.
“National recognises that during an economic crisis, when we are losing thousands of jobs and businesses are struggling, increased government spending and higher levels of debt are required here and now,” Goldsmith says.
Indeed, as Judith Collins announced last week, we have a more ambitious infrastructure plan to underpin future jobs and economic opportunities.
“We will increase spending on health and education every year, with an absolute focus on getting good results for that extra spending.
“Our plan will allow for increased government spending on social services but would not involve the random excess spending that is Labour’s substitute for a growth plan.”
“National will spend more but will spend it wisely. Talks of slashing public spending is scaremongering nonsense,” Mr Goldsmith says.
“New Zealand can spend more now, as Grant Robertson always points out, because we had low levels of government debt coming into the crisis.
“We only had low levels of debt, following the Global Financial Crisis and Canterbury earthquakes, because of that combination of disciplined spending and the focus on growth delivered by the previous national government,” Goldsmith says.
“We have signalled a desire to return government net debt to below 30 per cent of GDP in a decade, give or take a few years, because we need to prepare for the inevitable next crisis.
“Stopping payments to the Super Fund, increasing economic growth and increasing government spending at a slightly more modest rate would make more prudent debt levels achievable.
“With so much uncertainty about the impact of the virus over the next year it is impossible to be definitive now about the exact timing of when we will meet that goal, but it is important to have a clear sense of direction and a plan.
Labour’s idea is only to keep spending more, borrowing more and taxing more, without a plan for it to stop.
That’s not credible.

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