Hon Dr Michael Cullen
Minister of Finance

23 August 2005 Media Statement

Key talking nonsense again – Cullen

Finance Minister Michael Cullen today dismissed as nonsense claims by John Key that Labour’s policies might require more borrowing than would National’s.

“His argument is so flimsy, it collapses at a glance.

“Labour’s election promises add up to $2.2 billion in new spending over four years. National’s tax cuts alone will cost $9.4 billion over the same period.

“And – unlike National – we have actually fully costed all of our election pledges. All of them are either funded within Budget 2005 baselines or from the $1.9 billion provision for future budgets so will have no impact on the debt track.

“The only exception is the Family Tax Relief and childcare package. This will cost $1.5 billion and is funded from a $1.58 billion improvement in the fiscal position between the budget and the Pre-election Economic and Fiscal Update.

“National, on the other hand, has made promises on raising police numbers and abolishing parole which would cost $722 million a year to implement but has budgeted only $100 million in Year One, $200 million in Year Two and $300 million in Year Three in new spending for law and order.

“Mr Key is clearly still struggling with the mechanics of public financing and will have his work cut out for him arguing how Labour would have to borrow more to finance less expenditure or foregone revenue than National is committed to.

“This is especially so as anyone with any direct experience in trying to trim waste in the public sector knows that National’s assumptions about the savings it can make by cutting ‘low quality spending’ are more heroic than Superman,” Dr Cullen said.

ENDS

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