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Govt fails to heed economic warnings

Govt fails to heed economic warnings

The Government has shown it doesn't realise the urgent need to take action with its comments today that business tax changes could be more than two years away, says National Leader Don Brash.

Finance Minister Michael Cullen told Morning Report today not to expect any major moves from changes to the business tax regime until 1 April 2008.

"That's nearly at the next election - if this Government runs full term - yet we are facing an economic slowdown now," says Dr Brash.

"Dr Cullen is fiddling with a garden hose while the house is burning. He should be calling the fire brigade. As I said in my Orewa speech last night, we are heading for disaster.

"Waiting for the glacial progress of tax policy is not the answer. He could cut business tax rates from 33 to 30 per cent straight away if he wanted to.

"Dr Cullen has ignored my warnings about the economic slowdown - which could turn into a recession if business confidence remains at the same pessimistic levels it's at now.

"National does want to see growth-enhancing tax changes. But the Government has other options available too- like spending less - to take the pressure off the Reserve Bank.

"The high interest rates that are hurting exporters and farmers so badly are partly due to the high level of government spending.

"Dr Cullen's comments today are a signal that they are not interested in doing anything positive for the economy. Meanwhile the gap in average after-tax incomes with Australia will only keep getting wider and we'll keep losing more people across the Tasman."

ENDS

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