Goff's reckless borrow and hope stuck in the past

Labour might claim it has undergone a facelift since the election, but no amount of cosmetic surgery can hide the fact that its reckless economic policies are stuck in the past, Finance Minister Bill English says.

"Phil Goff tries to suggest he has made a break from the past and is listening to New Zealanders," Mr English says.

"But there is no evidence of fresh thinking in Labour's reckless economic policies, which would send New Zealand billions of dollars deeper into debt, drive up interest rates and ultimately bankrupt the country.

"Phil Goff needs to wake up. New Zealand went into recession under Labour's watch, which combined with the global economic crisis, will put a $50 billion hole in the economy over the next three years.

"Labour has clearly failed to learn any lessons from the recession. More debt is the last thing we need. We are already facing cash deficits of $10-12 billion over the next four years.

"Under Labour's flimsy plan, that would spiral by more than $6 billion to reach $18 billion by 2011/12.

Labour's extra spending includes:

Second and third tranches of Labour's tax cuts

$m
1,600

Full Super Fund contributions

1,565

Reversing KiwiSaver changes

950

Fast Forward Fund

650

Extending benefits to people with spouses in work

300

Funding the "unfunded commitments" in education

250

No job losses in the public sector

250

Reinstating the R&D tax credit

220

Increasing overseas aid

65

Paid parental leave extension

40

Reversing the transfer from health to the insulation fund

25

Other spending

100

Total additional to borrow

$6,015m

"In addition, Labour wants to reverse the Government's changes to land transport funding over the next three years and build deep bored tunnels at Waterview in Auckland, which would mean borrowing another $2.77 billion," Mr English says.
"A Government spending binge now would heighten imbalances in the economy and threaten a sustainable recovery.

"It would also lower the living standards of future generations of New Zealanders and force future Governments into radical policy choices.

"By contrast, the National-led Government has made considered choices now so we don't have to make harsher ones later.

"We have a clear and realistic plan to control debt and get the economy back on the road to recovery. That will deliver the sustainable long-term growth New Zealanders deserve," Mr English says.

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