The 2005 budget is notable for two things - Dr. Cullen bodged his opportunity to return to us the benefits of the taxes he has been extracting for the past year. He also did nothing to address the driver behind the inflationary process and ever increasing taxes and charges - Debt.

The measures announced, in terms of additional spending in police, health, education, justice etc., will amount to virtually nothing by the time we taxpayers get our extra 6 bucks per week. The ongoing increases in the cost of living, working and doing business will have long since eaten up the 'largesse' displayed by this Government by the time we get our miserable 'increase' in disposable income.

Offsetting the 'extra six bucks, as but two examples, will be the 'carbon tax' and the introduction of a compulsory savings scheme, either of which will effectively kill the tax adjustment.

Both Labour and National have paid pay lip service to the needs of people for the past 30 years by redistributing the tax we pay. Neither are prepared to address the issue of debt that lies behind respective governments taking more and more of our earnings in tax while the problems in police, health, education, justice etc continue to make headlines in our media. The ambulance that was placed at the bottom of the cliff in 1984 is still there in 2005 and our politicians have yet to come up with a viable design for a fence at the cliff top.

The need is not for large amounts of foreign investment to prop up the economy for short term gain and long term taxpayer funded deficits. The need is for our essential infrastructure to be funded by substituting the interest bearing debt (sourced from off shore owned entities) being used to build and maintain New Zealand's essential infrastructure. That need can be achieved with an interest free credit facility through our Central Bank designed to provide capital funding streams based on the aspirations of the people of New Zealand that the system is supposed to be designed to work for. Instead it is floundering along on some redundant, outdated dipstick theory of money that had its genesis in the subsistence economy of 17th Century England and which is now largely irrelevant to the productive capacity, needs and demands of the 21st Century.

The provision of an interest free source of funding for our infrastructure would result in our domestic economy having less dependence on the vagaries of international money markets - would lead directly to a reduction in debt circulating in the economy - provide long term permanent tax reductions - eliminate scarcity and shortages in service provision and provide an opportunity for more business in government with less government in business.

Trevor Crosbie
ADVANCE New Zealand

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