Budget Numbers Support Faster Growth Assistance

18 December 2003

Media Release

Budget Numbers Support Faster Growth Assistance Package - Now

“The Government’s Future Directions package promised for next year’s Budget should have as its center-piece measures to achieve faster and higher sustained growth for New Zealand – not more assistance to low and middle income families as Finance Minister Michael Cullen announced today.”

Commenting on the Government’s December economic and fiscal update predicting annual surpluses of a billion or more for the next five years, Michael Barnett, chief executive of the Auckland Chamber of Commerce, said the importance of achieving higher economic growth as crucial to lifting living standards for all should never be lost sight of.

“The forecast for growth of around 3 percent over the next five years is still too low to deliver the higher living standards matching neighbour Australia and other richer nations that Government says it wants.”

The Government intention to use some of the surplus to build capacity in the public sector was another area of doubtful benefit to achieving higher growth, said Mr Barnett.

At least Dr Cullen is transparently honest in his reported intention to spend the surplus on low and middle income earners in order to put Labour in a commanding position for the 2005 election .

However, long term, all New Zealanders would be better off if the surplus was used to invest in building a bigger economy,” said Mr Barnett. “Top of the list in spending the surplus should be investment in the three big growth policy targets that the Chamber of Commerce have identified – boosting exports volumes, making sure Auckland economy is fit to grow (without short-changing the rest of NZ), and increasing the size of the skilled workforce.”

“Politically, Dr Cullen’s Budget plans may well be a winner, but economically there is compelling evidence that, once again, the business community’s aspirations for New Zealand to achieve higher growth and get back into the top half of the OECD are being short-changed.”

ENDS

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