INDEPENDENT NEWS

Act now, pay later - Cullen

Published: Mon 1 Nov 1999 02:44 PM
"Act's goal of cutting Government spending by a third - or by $12 billion in today's dollar terms - would entirely wipe out both the health and education budgets," Labour finance spokesperson Michael Cullen said today.
Dr Cullen was commenting on Richard Prebble's statement in yesterday's Sunday Star Times that Act in coalition with National would press for a freeze on government spending until expenditure fell as a proportion of gdp from 36 percent to 24 percent - the level it was at in 1973.
"It was a rare moment of honesty from Act which has so far been trying to hide the harshness of its real policy agenda behind a smokescreen of populism," Dr Cullen said.
"But the size of the cuts Mr Prebble is talking about is massive and would be massively damaging to New Zealand's social fabric and to all but the very richest New Zealanders, those able to pay privately for their family's health care and schooling.
"To get $12 billion savings on today's fiscal figures, you would have to eliminate all health and education spending.
"Or Act could really show its true colours as far as the elderly are concerned by cancelling all superannuation, health and law and order spending. But after the effects of tax are taken into account, that would still leave Act hundreds and millions of dollars shy of its target.
"Mr Prebble is comparing apples and pears when he talks about returning spending to 1973 levels. He is ignoring the cost pressures of an ageing population and of increasingly complex and expensive health technologies.
"He is also ignoring the fact that more jobs now require a tertiary qualification than was the case in the simpler economy of the 1970s.
"I can only conclude that he plucked the 1973 target from the air. That doesn't surprise me. It is typical of Act's cavalier and irresponsible approach to policy-making," Dr Cullen said.

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