23 December 2010

Media Statement

National gives us the double dip blues for Christmas

New Zealand’s economic performance is becoming bleaker and bleaker under National’s mismanagement, says Labour’s Finance spokesperson David Cunliffe.

David Cunliffe, commenting on the release today of GDP figures for the September quarter, said the 0.2 percent decline, following an increase of just 0.1 percent in the previous quarter, showed that things are getting worse not better.

"Of huge concern is the continuing freefall of Kiwi manufacturing, down another 1.7% after 4.3% the previous quarter. Fishing, forestry and mining are down 5.5% and construction 2.5%. This is a broad-based slowdown across productive sectors and would be far worse if we did not have record prices for dairy products to cushion it.

"These statistics prove the slowdown trend is not just part of ‘necessary rebalancing’, as National pretends. Cutting capital formation (investment) in transport by 8.3% in a quarter, by 7.4% in residential building and 6.4% in plant and machinery will leave the economy less capable of rebounding in future,” David Cunliffe said.

“National has had two years at the economic tiller, and still has no economic plan to promote growth and jobs,” David Cunliffe said. "A double-dip recession is now a real possibility, although this may be temporarily offset by Christmas period sales in the fourth quarter. These statistics reaffirm the bad news in last week's HYEFU showing that our economy is heading backwards, and as a result the government's accounts are collapsing.

“National’s mismanagement of the economy has been characterised by three failed ‘initiatives’,” David Cunliffe said.

“Its $23 billion of tax cuts have done nothing to revitalise the economy, but has put more money in the pockets of National’s rich mates while making life tougher for struggling low and middle income earners; its cycleway has created just a handful of jobs; and its ideological tampering with labour laws is knocking the stuffing out of hard-working Kiwis.

“While National fiddles, the increase in unemployment since it took office is costing the country about three quarters of a billion dollars in foregone tax revenue and the direct costs of the unemployment benefit,” David Cunliffe said. “When other assistance is thrown in, the true cost is much higher.

“Meanwhile, our closest trading partners are leaving New Zealand well behind in terms of growth. National can no longer hide behind the global financial crisis back in 2007-08 for its economic mismanagement,” David Cunliffe said. “If our closest neighbours and trading partners can do it, why can’t National do it here?

“There is no excuse. National came in to government with no idea other than to give tax cuts to the wealthy. It has blindly pursued that path, whatever its folly and whatever continuing damage it is causing to the large majority of New Zealanders.

“National’s Christmas message is simple: ‘Haves’ a happy Christmas and ‘have nots’ --- tough luck.”

ENDS

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