Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 


Getting ahead with National

John Key MP
National Party Finance Spokesman

19 August 2005

Getting ahead with National

National Party Finance spokesman John Key has outlined National’s approach to tax and spending.

“Our fiscal strategy recognises the importance of tax as a significant driver in people’s willingness, desire and ability to work, to gain skills, to save and to take risks,” Mr Key said at a financial briefing today.

National’s fair tax and family package will be phased in over the next three years, rising to an annual total of $3.9 billion in the 2008/09 year.

National’s fiscal strategy is focused on better quality public spending and a fair tax system that rewards hard work.

  National will continue to run operating surpluses sufficient to cover contributions to the NZ Super Fund and some capital spending.

 Our spending strategy will focus on getting more funding through to the front-line services in health, education and policing.

 Our tax package focuses on the importance of tax as a significant driver in people’s willingness, desire and ability to work, to gain skills, to save and to take risks.

“These fiscal projections presented today do not take account of the $2.2 billion of additional revenue identified in yesterday's Pre-Election Economic and Fiscal Update (PREFU).

National’s Fiscal Strategy

National’s medium-term fiscal strategy is to run sustained budget surpluses over the course of the economic cycle, sufficient to fund contributions to the New Zealand Super Fund, and to fund some capital expenditure. We will be running an OBERAC surplus of approximately 2% of GDP.

“Debt levels will be maintained at prudent levels. Our focus is on removing obstacles to growth. A modest increase in debt to fund long-lived assets will contribute to lifting longer term sustainable growth rates,” said Mr Key.

 Gross sovereign issued debt is forecast to be approximately 1% higher relative to GDP than currently by the end of the forecast period.

 National will ensure that the Government’s net worth continues to improve.

Cutting Government Waste

Government spending has risen from $32 billion to $48 billion. National has no confidence that the projected spending path outlined in Labour’s last Budget represents an appropriate benchmark for spending.

National is anticipating lifting the annual budget spend by about $1.5bn a year on average over the next three years.

National will conduct a full baseline review of all spending, with a view to cutting low-quality spending and setting more sensible spending priorities. We anticipate stabilising core Crown spending at around 31% of GDP over the next term of government, about 1% lower than in the Labour spending track.

“Savings found from within the Health and Education sectors will be poured back into services,” said Mr Key.

“The fiscal projections make no allowance for the dynamic effects that are the entire point of our fair tax and welfare policies, and so in that sense are very conservative. The lower tax structure will provide much better incentives for working people, and so will boost growth and incomes, and therefore lift revenues above what a static analysis would suggest.

“National’s welfare reforms will, in time, see fewer people on welfare, reducing costs and generating revenues as people move from welfare to work.”

Mr Key identified savings, relative to Labour’s projected spending track.

 Removing the minor threshold indexation allowance in Labour’s Budget.

 Not implementing the Kiwi Saver scheme, because it won’t work, is poorly designed and is unfair. It is better to put working people in the financial position where they can save.

Monetary Policy

“Don Brash has been fully involved in the preparation of this package and is confident that the net additional fiscal impact is manageable, especially in the context of a slowing economy, and that it will not put pressure on interest rates.

Budget Balance

National anticipates operating balances averaging around 2% of GDP over the coming three years.

If the Labour student loan scheme was implemented, Crown net worth would take a $1.7 billion write-off in 2006/07.

Gross debt will rise slightly, relative to 2005 Budget projections, to around 22% of GDP. Again, if the Labour student loan scheme was implemented, gross debt would be higher under Labour’s policies.

Note: These projections do not yet build in the substantial upward revision to revenue announced in the Pre-Election and Fiscal Update.

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Half Empty: Dairy Prices Drop To Lowest Since August 2009

Dairy product prices fell to the lowest level in more than five years in the latest GlobalDairyTrade auction, led by declines in butter milk powder and whole milk powder.

”Stocks of dairy commodities are building across the globe due to Russia’s current ban on importing dairy products from many Western nations, and a lack of urgency from Chinese buyers, while at the same time global milk supplies are expanding,” AgriHQ dairy analyst Susan Kilsby said in a note. More>>

 

Slippage: NZ Universities Still In Top 3% Globally

This year the University of Auckland ranked 175 (down from 164 last year); the University of Otago ranked 251-275th (down from 226-250), both Victoria University of Wellington and the University of Canterbury held their ranks (at 276-300thand 301-350 respectively), while the University of Waikato dropped from 301-350 to 351-400. More>>

ALSO:

Gordon Campbell:
On The Last Rites For The TPP

The Trans Pacific Partnership trade deal is one of those litmus issues that has always had more to do with one’s place on the political spectrum than with any imminent reality... For the TPP’s friends and foes alike though, the end now seems nigh. More>>

Gordon Campbell: On The Farcical Elevation Of David Seymour

With the election won, it’s time to find jobs for the boy. David Seymour is the Act Party’s latest scrounger to be rewarded by the National Party, and not only with a seat in Parliament. More>>

ALSO:

As Key Mulls Joining ISIS Fighting: McCully Speech To UN Backs Security Council Bid

It is an honour to address you today on behalf of the Prime Minister and Government of New Zealand. Our General Election took place last week - our Prime Minister Rt Hon John Key is engaged in forming a government and that is why he is unable to be here in New York... More>>

ALSO:

Labour: Cunliffe Triggers Party Wide Leadership Contest

David Cunliffe has resigned as Labour Leader, but says he will seek re-election... If there is any contest the election will have to go through a process involving the party membership and union affiliates. More>>

ALSO:

Flyover Appeal: Progress And Certainty, Or Confusion And More Delays?

Lindsay Shelton: The Transport Agency, embarrassed by the rejection of its flyover alongside the Basin Reserve, says it’s appealing because the decision could “constrain progress.” Yet for most clear-sighted Wellingtonians a 300-metre-long concrete structure above Kent and Cambridge Terraces would in no way be seen as progress… More>>

ALSO:

Gordon Campbell: On Cunliffe’s Last Stand

Right now, embattled Labour leader David Cunliffe has three options. None of them are particularly attractive for him personally, or for the Labour Party... More>>

ALSO:

Key Seeking 'New Ideas': Look To Children’s Commissioner On Poverty - Greens

John Key should not reinvent the wheel when it comes to ideas for tackling child poverty, and instead look to the recommendations of the Children’s Commissioner’s Expert Group on Child Poverty, Green Party co-leader Metiria Turei says. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
More RSS  RSS
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news