Hon Dr Michael Cullen
Minister of Finance

20 January 2006 Media Statement

Cullen: Key out of touch

Finance Minister Michael Cullen said today opposition finance spokesman John Key continues to display his ignorance on fundamental economic issues.

The strong Kiwi dollar reflects New Zealand's stellar economic growth over the last six years.

"It's odd that Mr Key now suggests government spending is fuelling inflation and adding to pressures on the dollar," said Dr Cullen. "Before the election both he and Dr Brash promised to stick to a moderate growth path for government spending.

"What Mr Key is suggesting now is that a National led government would be slashing spending. This is the truth they hid from voters during the election campaign," said Dr Cullen.

"At the same time National would still cut taxes. That would only
further fuel inflation, lead to more interest rate rises, adding pressure on the Kiwi dollar and so causing more pain for ordinary New Zealand home owners and exporters.

"Mr Key is clearly out of touch. He's simply showing his true colours as a friend of money markets and currency speculators in particular," Dr Cullen concluded.

ENDS

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