Tough decisions needed to get the economy growing

Labour will focus on growth in its response to the budget, Labour’s Finance spokesperson David Parker told an Auckland business audience this morning.

He says National is not delivering on its own promises of growth because it won’t make tough decisions about four issues: Poor growth; an export sector that earns too little because it’s too narrowly based; not enough savings; and tax incentives that go to the wrong sectors.

“Even if the National Government limps back to surplus by 2014/15 that won’t cure our fundamental problems," David Parker says.

“We also need growth in jobs, growth in the breadth of exports, growth in total exports, growth in GNP per capita. On these measures National has failed."

He says National makes promises on these measures every year but always fails to meet them:

2009: “This Budget will start making the long-term changes that National promised to make and that are needed to lift New Zealand's long-term economic performance"

2010: “In the end, this was a Budget about growth, a Budget about jobs, a Budget about the future of New Zealand."

2011: “The Budget is likely to see very strong growth in real wages for New Zealanders ... very strong job growth; and a much stronger economic outlook for New Zealand:

2012: "The budget this year, “will show we are likely to experience reasonably robust levels of growth in 2013- 14."

David Parker says it’s not Greece’s fault that the economy is growing debt instead of jobs, wages or profitable businesses.

“A large part of the reason we are in our current situation is because of the entrenched orthodoxies we cling on to in tax, savings and monetary policy.

“None of what I’m talking about is about ‘tax and spend’, or ‘cutting the pie differently’, or any of the tired and out of date clichés that are hurled at Labour whenever we talk about change. Labour is committed to a thrifty fiscal track that gets back to surplus in the same year.

“Labour would only pay for any new spending or tax cuts out of existing budget provisions, new revenue, or by re- prioritising.

“But return to surplus on its own is not enough. We simply have to change We can’t keep putting off tough decisions. National is sticking with orthodoxies past their use-by date, while New Zealanders wanting better jobs and higher incomes vote with their feet," David Parker said.

Please find the full speech attached Labour_Pre Budget_Speech.pdf

ENDS

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