11 October 2004

Aussie election results warning for National - Cullen

The Australian election results are a clear warning for National and the other Opposition parties, says Finance Minister Michael Cullen.

“The most obvious lesson is that policies which might be seen as further pushing up interest rates will lead to political punishment by the electorate.

“In that respect, National’s already in deep trouble. Its spokesmen have called already for a combination of large revenue reductions on one side of the ledger and for specific spending increases on the other.

“Both Dr Brash and Mr Keys seem to favour much larger borrowing by the government to fund its expenditure. This significant loosening of fiscal policy, particularly at a time of tight capacity, would force even tighter monetary policy and greater interest rate rises.

“More generally, National’s abandonment of the economy as an election issue is tantamount to running up the white flag even before the battle has begun,” Dr Cullen said.

ENDS

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