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 Wage Hike For MPs (and Paul Robeson)

Hard to tell what is more infuriating. Is it the 5.3% increase on the already bloated salaries of MPs, or their pantomime of outrage at being gifted with such a wonderful back-dated bonanza?

As usual, Prime Minister John Key has busily tried to distance himself from the political fallout, even though he happens to be the main beneficiary of the Remuneration Authority’s generosity. Finance Minister Bill English says with a straight face that it would actually be very hard to give the money back...

Even if it were true, it would actually be very easy for English and any other guilty colleagues, to give the extra money away. There are any number of food banks or homeless shelters who would be able to put the money to good use. More>>

 

PARLIAMENT TODAY:

No Designers Or Visual Artists: Flag Panel Members Announced

The Government has appointed 12 New Zealanders as members of the Flag Consideration Panel which will engage with the public about a possible new New Zealand flag, Deputy Prime Minister Bill English says. More>>

ALSO:

Labour MP Stands Down From Portfolio: Comment From Carmel Sepuloni

The first I knew of my mother’s charges was when I was called by a reporter yesterday. I spoke to Andrew and we agreed there is a conflict of interest at the present time which means I will temporarily stand aside from the Social Development portfolio. It’s the right thing to do… . More>>

ALSO:

Gordon Campbell: On Whether NZ Troops Are The Least Of Islamic State’s Problems

Given that it has been politically packaged and sold as a training mission, the Iraq deployment announced yesterday by Prime Minister John Key seemed to be mysteriously short of actual trainers... The other wing of the argument is whether a troop deployment is (a) the only effective way and (b) the appropriate time to combat Islamic State. More>>

ALSO:

143 Troops, Possible SAS Deployment, Legalities Unsorted: PM’s Statement On ISIL

Mr Speaker, today I am announcing to the House the Government’s decisions about our contribution to the fight against the Islamic State of Iraq and the Levant, or ISIL... More>>

ALSO:

Liu Saga: PM's Dinner With Controversial Donor

John Key must front up to New Zealand and say what he discussed with Donghua Liu when the disgraced businessman paid $25,000 for the Prime Minister to come to dinner at his Remuera home, the Green Party said today. More>>

ALSO:

Roads: National MP 'Concerned' At Overseas Driver Crashes

Waitaki MP and Parliamentary Private Secretary for Tourism Jacqui Dean said she was concerned at the number of fatal crashes involving overseas licence holders and she really felt that the time had come for more to be done. More>>

ALSO:

Parliament Today: Parole Bill Passes

A bill reducing parole hearings deemed to be unnecessary has passed. The third reading of the Parole Amendment Bill was completed by 104 to 16 with the Greens and Maori Party opposed. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news