John Key MP
National Party Finance Spokesman
23 August 2005

Labour on the brink of out borrowing National

“Wild claims by Michael Cullen that National will lead New Zealand into a pathway of debt are about as accurate as his statement that there’s no room for tax relief,” says National Party Finance spokesman John Key

“If Labour continues on current form, it’s quite possible Labour will be borrowing more than National and getting less for it.

“At National’s financial briefing last Friday, we indicated that gross debt could be as much as $3.3 billion higher than Labour’s forecast by 2008/09.

”However, National has not factored in the stronger revenue the Treasury predicted in its pre-election opening of the books, which is estimated to reduce this borrowing requirement by around $2.2 billion.

“In addition, Michael Cullen’s cancellation of interest on student loans will increase Labour’s borrowing by around $1 billion. Add to this the additional $1.5 billion from the increased Working for Families.

“National’s gain from the PREFU, and Labour’s loss from the loans alongside its WFF initiative, means the borrowing gap between the alternative governments is less than $700 million.

“With Labour still threatening to spend more taxpayer money, and having refused to consider any behavioural change in students who will get interest free loans - it’s almost certain Labour will end up borrowing more than National.

“Only National has a considered plan to lift after tax incomes, and grow prosperity in New Zealand,” says Mr Key.

ENDS

Gross sovereign issued debt
($bn) Labour National
Budget 35.9 39.1
less PREFU net revenue 2.2 2.2
33.7 36.9
add Extra WFF 1.5 -
add Student loan income written off 1.0 -
36.2 36.9

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