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 War Crimes And The Afghan Insurgency

Truly, with friends like former defence Minster Wayne Mapp, the SAS does not need enemies. At the very least, the Hit and Run book has raised the possibility that the New Zealand SAS committed war crimes in the attack they led in Afghnistan upon the villages of Naik and Khak Khuday Dad...

Mapp’s attempted defence of the SAS on RNZ this morning unintentionally indicated that collective punishment was baked into the planning exercise for the raid, and also into how the raid proceeded on the ground. More>>

 

Emissions Plan: NZ Needs More Science, More Trees, Fewer Beasts

A combination of technology breakthroughs, much more plantation forestry, and a big switch away from pastoral, particularly dairy farming, are identified as the key elements of any approach New Zealand takes to reducing its carbon emissions to a net zero level, according to a new report sponsored by the New Zealand chapter of GLOBE, a multi-party, global parliamentary grouping. More>>

ALSO:

"Backed To Win Seats": Labour Māori Seat MPs Won't Stand On List

The Labour Party is backing a request from its Māori seat MPs to stand as electorate MPs only, says Labour Leader Andrew Little. More>>

Productivity Commission: New Models Of Tertiary Education Are Coming

The report is a broad-ranging inquiry into how well New Zealand’s tertiary education system is set up to respond to emerging trends in technology and the internationalisation of education, and changes in the structure of the population, and the skills needed in the economy and society... More>>

ALSO:

PM's Press Conference: Water Everywhere

Monday's Post-Cabinet press conference focused on water, with the Prime Minister fielding questions about the possibility pricing water taken for export. Mr English said the government was directing their water allocation technical advisory group to include export water in considerations. More>>

ALSO:

Kim Workman: Reality Check Needed For Public Service Reoffending Target

Reducing the prison population results in a reduction in re-offending. Shortening sentences reduces reoffending... More>>

ALSO:

PSA: Minister Should Stop Dodging On Salisbury School

"The decision around the future of Salisbury School has been overdue for months, and the ambiguity is leaving parents, staff and students in limbo. It’s time the Minister stopped hiding, muddying the waters and being dishonest about her Ministry’s intentions," says Erin Polaczuk, PSA national secretary. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news