Tuesday 9 Jul 2002

The deteriorating trade balance trend is further evidence of Labour's failure to put in place policies for economic growth, ACT Finance Spokesman MP Rodney Hide said today.

"The monthly trade balance trend for the month of May shows a deficit of $24 million. This is the fourth consecutive month in deficit following surpluses every month last year.

"Labour has failed to capitalise on some of the best trading conditions in over a decade. The run of surpluses last year now appears to have been artificially inflated due to a lower kiwi dollar and stronger commodity prices. Now that these factors are reversing, the true picture is becoming clear: there has been no real or sustainable improvement at all.

"The reality is that Labour's talk about growing an innovative economy is just empty rhetoric. When you analyse the impact of their policies, it's all bad news. Increases to taxes and compliance costs have made it more difficult for New Zealand businesses to compete. Coming on top of rising interest rates, falling business confidence, worsening violent crime and a funding crisis in health and education, it is easy to see why Labour called a snap election.

"Since Labour took office, 16 out of 30 OECD countries have lowered their company tax rates. Labour is promising to make New Zealand even less competitive by holding our high tax rates.

"Michael Cullen should come clean and stop talking about four percent growth he can't deliver. Treasury projections in Labour's budget this year show the true story - projected growth falling to just two percent p.a. under Labour's policies. That leaves Labour with a two percent `credibility gap'.

"ACT will deliver the four percent growth we need with a balanced package of lower tax and a bonfire of red tape and regulations.

"This must be done if we are to claw our way back up the OECD ladder and once again be a prosperous nation. ACT's policies are proven ones, backed by a wealth of international experience and evidence linking lower taxes to higher growth," Mr Hide said.

ENDS

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