Bill English National Finance Spokesman

31 July 2001

'Inclusive Economy' requires more than just rhetoric

National's Finance spokesman Bill English says the "Towards an Inclusive Economy" report released today says nothing new. "Treasury has dressed up the some old, but important, ideas in new clothes for the Government's political purposes.

"The report stresses the importance of well-being, and says the basis for this is 'those elements of fiscal, monetary and regulatory policy that are important for growth, stability and the efficient functioning of new markets'. That type of sentiment can be found in every Budget since 1980.

"The report also says that in order to improve well-being for the disadvantaged 'a focus on education, training and promotion of labour market participation is better than a focus on passive income transfers'. This is advice to the Labour Party that increasing taxes and universal income maintenance don't work. Treasury has been saying that for 20 years as well.

"They drive home the point by adding that 'the tax-benefit transfer system is not a realistic or desirable option to tackle in a sustainable way the problem of low absolute levels of income'.

"The report suggests that the inclusive economy means targeting assistance to certain people, including low attainment students, low skill workers and Maori governance issues. But the Government has pulled back from its Closing the Gaps policy, which probably best fits this new version of the Third Way.

"I have been predicting that the Government will drop "economic transformation" by the end of the year. This report is a step on the way," Bill English said.

Ends

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