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More borrowing: for advertising or tax cuts?

Hon Bill English MP
National Party Finance Spokesman

9 April 2008

More borrowing: for advertising or tax cuts?

National Party Finance spokesman Bill English says the Crown accounts for February suggest that Michael Cullen is borrowing more for his election-year spend-up.

“If he’s not borrowing for tax cuts, he must be borrowing for the multimillion-dollar advertising campaigns that his departments are running in election year.”

Mr English says the February Financial Statements show that Labour has increased gross sovereign-issued debt by around $800 million year-on-year, and that it is forecast to go higher still.

“That confirms Dr Cullen’s hints in Parliament yesterday when he said the Government’s debt target is 20% of GDP, when it is currently well below that.

“Dr Cullen is leaving himself plenty of room to borrow more for election-year lollynomics. He’s speaking out of both sides of his mouth.

“He and his colleagues are going on a desperate election-year spending spree, just like they did in 2007 when Dr Cullen warned them to rope in spending or else interest rates would stay higher for longer.

“But Labour did embark on a record spending budget, which has helped keep New Zealand’s interest rates as the second highest in the OECD.

"In Budget 2007, Dr Cullen sacrificed borrowers who faced rising costs of living and over-taxation so Labour could spend more taxpayers’ money on pet projects.

“Not only that, but he cancelled the only personal tax cuts he has ever offered because Labour needed the money to cover its spending promises.

“That ill discipline, and the decision to talk the economy into a recession, has sent business and consumer confidence into a nose-dive. It has slumped to levels not seen in 23 years.

“After eight long years, Dr Cullen is effectively telling Kiwis that despite the economic buoyancy of recent times, and the rampant over-taxation of hard-working New Zealanders, Labour has spent the gains and is borrowing in a bid for re-election.”


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