4 November 2009 Media Statement

Bill English decisions on Super and ACC short-sighted

The Government’s $175 million operating deficit for the first three months of the financial year would be far worse if Super Fund and ACC investments had not made gains, says Labour Finance spokesperson David Cunliffe.

“The gains from these investments offset drops in tax revenue, and mean that the deficit is much better than Finance Minister Bill English forecast in May,” David Cunliffe said.

“It shows how short-sighted the Finance Minister has been deferring Government contributions to Super for a decade and casting doubt on the future viability of ACC. The $1.4 billion higher-than-forecast investment returns from the Super Fund makes a mockery of Bill English’s claim that it is a nonsense to borrow to invest.

“New Zealand would have been far better off if the Government had maintained contributions to the Super Fund. Suspending superannuation investment has proved to be nonsensical as the better than expected results from the fund’s portfolio has offset other losses,” David Cunliffe said.

“Bill English tries to spin that he inherited government books that were in trouble. Nothing is more wrong. He inherited net debt at zero and gross debt halved. That is a far cry from the fiscal bleeding of today, and 3.4% unemployment under Labour looks really good now we've hit 6 percent --- and still growing --- under National.

“Of course the global recession has been an outside shock, but hard working Kiwi families are still waiting to see a plan from National on how to deal with it and bounce back,” David Cunliffe said.

“National has got away for a year or so coasting on the stimulus of the 2008 Labour Budget and pretending their ‘rolling maul’ of bits and pieces is a plan.

“Today’s numbers show Bill English has no plan and has lost control of the basics.”

ENDS

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