John Key MP National Party Finance Spokesman

03 May 2005

Labour's bureaucrat binge to impact on interest rates

National Party Finance spokesman John Key says the Reserve Bank Governor is signalling further interest rate rises as Labour attempts to defend its "bureaucrat hiring binge".

"Treasury has been warning Labour for some time that its reckless hiring policies will have an impact on growth, inflation and interest rates. Now the chickens are coming home to roost," says Mr Key.

He is commenting on a speech given by the Reserve Bank Governor Dr Alan Bollard to a Masterton District Council Business Community Breakfast Meeting, where he sent a shot across the Government and the markets' bow that another interest rate hike cannot be ruled out in June.

"New Zealanders will be concerned that low quality spending and a state sector hiring binge is not only putting pressure on interest rates but it is also costing taxpayers a fortune.

"Since Labour took office in 1999 there has been a cumulative increase in all taxes of more than $50 billion.

"The public are rightfully starting to ask what they got for the extra $50 billion.

"The answer is that it has been wasted on huge increases in the cost of the bureaucracy, as well as things like hip-hop tours, twilight golf, bogus polytech courses, and any number of other pet projects pandering to minority interests. "With mortgage rates set to rise, a property market teetering on the brink and an exchange rate that Labour promised to control but can't - it's time to end the waste and return some of the gains from a buoyant economy to workers in the form of tax cuts," says Mr Key.

ENDS

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