ACT leader Richard Prebble says the best way the government could help stave off recession would be to announce tax cuts for everyone.

"Dr Cullen is suggesting an economic policy of more public work and increased government spending. But government spending packages have been shown not to work in a modern global economy," Mr Prebble said.

"The Japanese government has had a massive spending programme for a decade, only to see Japan fall flat on its back.

"A far better strategy to assist the private sector would be to cut taxes across the board.

"Dr Cullen should be aware that government spending in New Zealand is already 40 percent of GDP and I know of no country in the world that's grown at the government's target of 4 percent per capita where the government takes 40 percent of GDP," Mr Prebble said.

ENDS

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