Parliament

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

Gordon Campbell: On The Budget

It may seem like Oliver to be so bold as to ask the Finance Minister for more gruel – but what the Dickens, Steven Joyce… is this Budget really as good as it gets?

Supposedly, the public was going to receive significant rewards – an election year lolly scramble no less – for the eight years of belt tightening that they’ve endured, and for the rundown of essential public services.

Well, what Budget 2017 delivered instead in Education and in Health were allocations barely sufficient to maintain the current levels of service delivery More>>

Scoop Full Coverage: of Budget Announcements & Reaction
Latest: Scoop Search

 
 

Auditor-General Stands Down For Investigation: Gordon Campbell On (Not) Taking Responsibility

So Martin Matthews, our current Auditor-General wishes he could have detected “earlier” the fraud that occurred on his watch at the Ministry of Transport. Hmmm. But he could have detected it earlier, surely? That’s the point. More>>

ALSO:

NGOs Pleased: Govt To Halt Collection Of Client Data

Brenda Pilott, the chair of ComVoices and national manager of Social Service Providers Aotearoa, congratulates the government on its decision to call a halt to the collection of individual client data until the concerns of not-for-profit service providers have been worked through. More>>

ALSO:

Gosh: Blasphemy Law Repeal Struck Down

Chris Hipkins, the MP who tabled a Supplementary Order Paper to add our Blasphemy Law to the Statutes Repeal Bill, said this was a "sad day for freedom of speech, tolerance, and leadership". More>>

ALSO:

Gordon Campbell: On The Navy’s Dealings With Fat Leonard, And Twin Peaks

At an official level, our “she’ll be right” attitude routinely spills over into a keen resentment of anyone who suggests the outcomes may be less than satisfactory… The Navy has now gone one step beyond. It won’t even ask itself whether it did a good job. More>>

ALSO:

NZDF: Fifth Rotation Of Troops Heads To Iraq

The fifth rotation of New Zealand Defence Force troops left today for a six-month mission training Iraqi soldiers. More>>

ALSO:

Gordon Campbell: On The Demonising Of Iran

Will New Zealand still be willing to pursue its recent trade overtures to Iran, now that US President Donald Trump has used his speech in Riyadh to single out Iran as the main source of terrorism and instability in the Middle East? More>>

ALSO:

 
 
 
 

Opening The Election Supporters

 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

Featured InfoPages

Opening the Election