Austerity-lite budget risks recession

Published: Thu 24 May 2012 03:03 PM
CTU Media Release
24 May 2012
Austerity-lite budget risks recession
Commenting on today’s Budget, CTU Economist Bill Rosenberg says “today’s Budget may be ‘austerity-lite’ but it’s the same failed logic that is being rejected in Europe. With danger signals in Europe and falling agricultural export prices, the zero budget poses a real risk of sending us back into recession. The forecasts include falling export income in 2012/13."
“We’ve seen high GDP growth forecasts time and again, but they have never actually showed up. Instead we have seen unemployment exceeding forecasts, lasting longer and affecting more people.”
Bill Rosenberg said “the tax changes targeting smokers, school children and the family batch announced today will only raise $289 million in 2012/13, and won’t address the loss of revenue and inequalities caused by the tax changes of 2010 which gave tax cuts to high income earners while hitting low income families with GST hikes.”
"We have too many New Zealanders earning low wages or looking for work. The forecasts show working people getting a falling share of the income in the economy. The government should have been putting money into assisting high value industries that create good jobs and exports, and stimulating growth in job-rich areas. The investment in the Advanced Technology Institute is positive, but the industry we need won’t just grow on its own and needs much more attention," said Bill Rosenberg.
Bill Rosenberg said "you can’t have growth and austerity, it just doesn’t work. With government debt still among the lowest in the OECD, it had room to move with real investment in job creation, economic growth, and looking after those who are most vulnerable."
“This government is still hiding behind the economic crisis and its self imposed timeframe for getting back to surplus to mask that they are making choices that will not help create jobs and economic growth. We do need to be careful about government debt levels, but an inflexible and rushed approach to debt reduction will hurt the economy more than it helps, and cuts in public sector jobs will only increase already high unemployment levels.”
“Despite being one of the least hard hit in the OECD by the 2008-09 global financial crisis, and maintaining one of the lowest government debt levels throughout the period 2004-2012, we are now 12th lowest in the OECD for unemployment whereas in 2004 we were 3rd lowest,” said Bill Rosenberg.
New Zealand Council of Trade Unions
Te Kauae Kaimahi
The New Zealand Council of Trade Unions Te Kauae Kaimahi brings together over 350,000 New Zealand union members in 40 affiliated unions. We are the united voice for working people and their families in New Zealand.
Contact New Zealand Council of Trade Unions
Physical Address:
Level 7, West Block, Education House, 178 Willis St, Wellington.
Media Contact:
Postal Address:
PO Box 6645, Marion Square, Wellington 6141.

Next in New Zealand politics

On Whether This Election Is Already A Foregone Conclusion
By: Gordon Campbell
Newshub-Reid Research Poll Shows National Rising But Labour Still Governing Alone
By: Mediaworks
SFO Files Charges In Relation To NZ First Foundation Donations
By: Serious Fraud Office
Business Leaders’ Confidence Tanks As Top Kiwi CEOs Vent Their Frustrations
By: New Zealand Media and Entertainment
Taking Action To Reduce Waste And Plastics
By: New Zealand Labour Party
On Last Night’s Leaders Debate
By: Gordon Campbell
Dunne Speaks: The Election Campaign Just Grinds Slowly On And On
By: Peter Dunne
Electoral Commission: Candidate And Party Lists Released
By: Electoral Commission
National Releases Its Plan To Restore NZ’s Prosperity
By: New Zealand National Party
The 2020 New Zealand Election Is Not A Foregone Conclusion.
By: Keith Rankin
Overseas Voting Starts On Wednesday
By: Electoral Commission
Politicians To Go Head To Head On Education Issues In Election Debate
By: NZEI Te Riu Roa
New Zealand First Fully Exonerated Of All SFO Charges
By: New Zealand First Party
Links to two judgments in the SFO's NZ First Foundation case
By: New Zealand High Court
Green Party Responds To NZ First Foundation SFO Charges
By: Green Party
View as: DESKTOP | MOBILE © Scoop Media