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Household debt levels rocket under Labour

Household debt levels rocket under Labour

Wednesday 16 Feb 2005

Rodney Hide - Press Releases - Taxation

ACT Leader Rodney Hide today revealed that the average household debt is now $75,000 - an increase of 55 percent since Labour came to power.

"Helen Clark lectures working New Zealanders about saving but the reality is household incomes are so squeezed people are struggling to meet their mortgage payments and pay off their credit cards let alone save for their retirement.

"In fact, last year New Zealanders' ability to save amounted to a negative 9.5 percent saving record - that is they spent nearly 10 percent more than what they earned.

"The average household is no better off under Labour. As well as rising prices and extra taxes wiping out any wage increases, average household debt levels have soared to be twice that of the average wage."

Official figures showed debt per household has risen from $48,396 to $75,029 in the five years to December 2004. Further, the Reserve Bank tells us collective household debt rocketed from $68,282 million to $114,232 million in the same period.

"With household debt increasing much faster than household income, the calls for across-the-board tax cuts for every hard-working New Zealander just gets louder. Boosting pay-packets is the best way to pay off debt, whether it be the mortgage, the student loan, the overdraft, or the credit card."

Mr Hide said as well as crippling people's budgets, increasing household debt was also a risk to the wider economy, as was warned in Budget 2004.

"By squeezing the life out of household budgets with unnecessarily high taxes, Dr Cullen is damaging our country's prospects.

"For the sake of our country and every one of its citizens' prosperity, New Zealanders need to be given the means to start seriously addressing their household debt levels. Tax cuts are the best way to deal to debt," said Mr Hide.

ENDS

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