Embargoed until 6am
April 22, 2009

Media Release

New Zealanders want Government to cut spending even if it increases unemployment

One third of New Zealanders want the Government to cut spending, even if it results in a short term rise in unemployment.

Twice as many people think the Government's best chance of helping New Zealand out of the recession as quickly as possible will be delivered by Government cutting rather than increasing its spending. The least popular option is cutting taxes.

Some 33% think the Government should cut its spending, compared with 17% who say it should increase spending, according to a new national online ShapeNZ survey of 2577 people. Commissioned by the New Zealand Business Council for Sustainable Development, the weighted April 3 to 20 poll has a maximum margin of error of + or - 1.9%.

People were asked which of four main policy options they thought presented the Government with its best chance of helping New Zealand out of recession as quickly as possible. (Each option was outlined with the most likely downside to the approach).

• Cutting Government spending, even if this might reduce private spending and employment in the short term, is favoured by 33%.

• Increasing Government spending to encourage people to spend more, even if this means the country spends more than it earns in the short term, is favoured by 17%.

• Taking no further action and awaiting an international recovery is favoured by 10%

• Cutting taxes, even if it meant more Government borrowing, is favoured by 9%.

3% supported none of these options and 19% didn't know, while 6% said Government should do something else.

Support for cutting Government spending enjoys even support across a range of household incomes: it is supported by between 34% and 36% of people living in households earning $20,001 to $100,000 a year, 36% of those in households earning $50,001 to $70,000 and 32% of households earning $100,001 to $200,000.

The most enthusiastic for cutting spending by personal income are those earning $30,001 to $50,000, and $200,000 plus (37%).

By occupation, those most favouring increases in Government spending are business proprietors and self employed (37%), while those most opposed are farm owners and managers (57%) and the retired and superannuitants (41%).

By party vote, spending cuts are supported by Act voters (51%), National (39%), Jim Anderton's Progressives (34%), Labour (33%), New Zealand First (32%), Maori Party (31%) and Greens (23%). 35% of those who chose not to vote at the last election prefer the spending cut option.

Increasing spending is supported by 29% of Jim Anderton's Progressives voters, 21% of National, Labour and New Zealand First voters, 17% of Act voters and 18% of Green and 8% of Maori Party voters.

Even among the unemployed and beneficiaries, cutting Government spending enjoys more support (32%) than increasing spending (8%).

Business Council Chief Executive Peter Neilson says if the Government plans to abandon the next round of tax cuts and announce spending reductions "at first view it won't have a problem with a considerable proportion of the public."

Past ShapeNZ surveys, however, have indicated opposition to cuts affecting benefits, health and education. The survey asked about Government spending or expenditure generally rather than specific areas of spending. Surveys undertaken in New Zealand and elsewhere usually show far less support for spending cuts in areas where respondents are likely to be recipients of that spending. Everyone is in favour of cutting Government waste, but few want the spending they benefit from cut, Mr Neilson says.

Results tables for this survey are available at www.nzbcsd.org.nz

ENDS

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