Plodder¡¦s Budget : On the Road to Nowhere

Tuesday 22nd May 2001 Rodney Hide Media Release -- Economy

The country needs a Budget that celebrates business and entrepreneurship and removes the hard, dead foot of government that is costing jobs and opportunities, ACT Finance spokesman Rodney Hide says.

¡§Instead the Labour-led government will deliver a ¡¥plodder¡¦s Budget¡¦ without vision or direction. The one thing the country desperately needs is a tax cut - the one thing Michael Cullen can¡¦t deliver on,¡¨ Mr Hide said.

¡§His spin will be that the Budget is fiscally prudent and there¡¦ll be much trumpeting of a few taxpayer dollars sprinkled around research, science, regional development and paid parental leave.

¡§These dollars will only serve to oil the wheels of interest groups and will be wasted. They won¡¦t provide any strategic direction for the country. So much for fiscal prudence.

¡§It¡¦s going to be a grey Budget with nothing to excite or interest,¡¨ he said.

¡§Last year¡¦s goal of ¡¥Closing the Gaps¡¦ was hastily abandoned. This year¡¦s goal of ¡¥Economic Transformation¡¦ will likewise soon face the chop. It will prove just as elusive.

¡§The government is heading the country in the exact opposite direction to the one required to transform New Zealand into a high-growth, high-wage productive economy. We are now completely out of step with best practice in the rest of the developed world,¡¨ Mr Hide said.

¡§The Labour-led government is:

„h Re-regulating, not deregulating. Employers must now negotiate collective contracts through third-party unions and meet vague ¡¥good faith¡¦ provisions;

„h Re-nationalising, not privatising. The Accident Insurance Industry has been re-nationalised, privatisation of TVNZ and NZ Post has been abandoned;

„h Increasing expenditure, not cutting it. The $5 billion NZ First extra spending has been topped by another $6 billion;

„h Increasing taxes, not cutting them. The top rate was hiked to 39 cents, $100 million in tobacco tax, roll-back of tariffs and a $200 million retrospective GST grab;

„h Expanding welfare , not curtailing it. Income related rents favour those in a state house over private accommodation, student loans favour rich students as well as poor, pensions have increased at the expense of the young.

¡§The Government¡¦s prescription can be summarised as more state direction and less personal freedom,¡¨ Mr Hide said.

¡§Instead of a clear set of rules, we have government by fiat whereby the bizarre Byzantine environmental rules can be ridden roughshod over so long as Deputy Prime Minister Jim Anderton agrees.

¡§The focus in the Budget won¡¦t be on the broad direction the government is taking but rather on minor details. It won¡¦t see the wood for the trees,¡¨ he said.

¡§The $6 billion extra spending is only five percent of government spending over three years. The so-called big boost to tourism of $4 million is handing back only one-hundredth of one percent of what government takes in tax in the first place.

¡§Instead of reaffirming private property rights, we have the dispensing of Ministerial favours to those whom the government chooses to smile upon.

¡§The result is that the outlook is for New Zealand to be piddling along at 2.5 percent or so growth when we should be striving towards 5 percent or more. We have hit 5 percent before. We need to do so again. Otherwise, we are destined to see our relative standard of living continue to slide.

¡§Labour and the Alliance along with the Greens have turned their back to the free market and to private enterprise. The result is now sadly all too plain to see,¡¨ Mr Hide said.

ENDS

For more information visit ACT online at http://www.act.org.nz or contact the ACT Parliamentary Office at act@parliament.govt.nz.

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