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Another excuse to borrow for tax cuts

26 November 2007

What will be the next excuse to borrow for tax cuts?

National Party Leader John Key has stopped denying that he would borrow to pay for tax cuts and has started making excuses for why New Zealanders shouldn’t care if he does, Finance Minister Michael Cullen said today.

On TVNZ’s Sunday programme, John Key again repeated calls to increase borrowing and load more debt onto government balance sheets. While he made a half-hearted effort to say the borrowing could somehow enable more road building, he no longer seems concerned that people will realise his real intention is to borrow for tax cuts.

“National is, for some reason, desperate to be seen as the party of debt,” Michael Cullen said. “John Key’s first excuse was that we could borrow for infrastructure, but he now looks to be surrendering that as he knows that Labour is investing in roads as fast as they can actually be built.

“Mr Key’s excuse for borrowing last night was that the government is in a positive net debt position. This is only true because of the New Zealand Superannuation Fund, something National opposed with vigour.

“So if Mr Key is saying it’s okay to borrow because we have set aside money to guarantee the future of New Zealand Super, will he next say it will be okay to borrow because KiwiSaver will improve our appallingly low national savings rate?

“National doesn’t like the Superannuation Fund and has tried to block KiwiSaver at every step, including just last week in Parliament, but seem intent on using both to justify borrowing for tax cuts. It just keeps getting stranger.

“After Bill English’s bizarre obsession with debt at last week’s Finance and Expenditure Committee meeting, it is becoming clear that National is desperate to outspend Labour on tax cuts and knows they’ll have to borrow to do it.

“The Labour-led government and New Zealanders know that borrowing to pay for tax cuts is just crazy.”


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