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Government spending not as efficient as tax cuts

Media statement Thursday, May 18th, 2006

Government spending not as efficient as tax cuts

The economic transformation that the budget is heading us toward will make New Zealanders increasingly reliant on the state, and less likely to take responsibility for themselves, or for saving and investing for their own future.

That was the response of the Employers &Manufacturers Association (Northern) to the budget today.

“Dr Cullen is not demonstrating any entrepreneurial streak,” said Alasdair Thompson, EMA’s chief executive.

“Aside from the $800 million over five years for meeting Transit’s funding gap, the balance of today’s budget is at the expense of tax cuts,” he said.

“We are very pleased to see the guarantee of funding for roads, and the bonds issue of $1 billion of debt funding to connect up our transport networks. We have been arguing for just such a commonsense approach as this for the past six years.

“But the other budget spending is at the expense of cutting taxes which would be a more efficient and faster route to economic transformation resulting in the ‘flexibility and adaptiveness’sought by Dr Cullen.

“To pay for the budget’s spending, taxes are locked in at their current levels, removing the opportunity for personal savings and for individuals to invest on their own behalf.

“Business welcomes the added investment in modern apprentices and other programmes to boost kiwi’s skills, as well as more funding for exporters and R&D, we doubt it will slow down kiwis heading across the Tasman in search of higher paid, lower taxed jobs.”


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