National, ACT Voodoo Economics
16 January 2004
Hon Matt Robson MP, Progressive Deputy Leader
National, ACT Voodoo Economics would crucify exporters
The demand of National and Act for hefty income tax cuts for the wealthiest New Zealanders would crucify the export sector and push New Zealand back into the boom and bust cycles endured when they were last in office, Progressive MP Matt Robson said today.
"The ACT Party today again called for an immediate cut to taxes, mimicking calls from the National Party which believes that tax cuts are the answer to every social and economic issue," Matt Robson said.
"This is Voodoo Economics of the worst sort. Big tax cuts now would deliver a temporary, artificial boost to domestic activity in the economy. That would in turn see the central bank push up interest rates and a flood of offshore speculative buying of New Zealand currency as foreign speculators rushed to make a profit out of the silliness such an idea represents," Matt Robson said.
"What National and ACT propose is tax cuts for those who pull their strings but the cost would be a temporary and unsustainable rise in domestic activity followed by an unnecessary blow to exporters in the form of a sudden further rise in the New Zealand dollar.
"In contrast to the boom and bust policies of National and ACT, the progressive coalition government has overseen sustainable growth rates in our economy and employment over the past four years which have way surpassed most other developed economies.
"The appreciation in the value of the New Zealand dollar over the past two years reflects the strong but sustainable growth in the economy. It would be a tragic error to throw all of that away in favour of a return to the boom and bust cycles of the past," the Progressive MP said.