27 January 2011

Govt books show asset sales to pay for tax cuts

John Key is driving the Government into debt then using that debt to justify his privatisation plans, the Green Party said today.

The Government today released the latest update on the government’s books showing a cash deficit of $9.1 billion for the five months to November 2010. Gross government debt is projected to hit $67 billion by June this year.

“This Government is driving the budget into the red, and then using the deficit as an excuse to sell strategic assets,” said Green Party Co-leader Russel Norman.

“National’s tax cuts added $15 billion to government debt over four years and poor quality spending on new motorways will add another $10 billion.”

The tax cuts favoured upper income earners, Dr Norman noted. New Zealanders on the median income received a tax cut of $14 a week, while Westpac’s CEO, on an annual salary of $5.6 million, was given $5000 a week in tax cuts.

“Selling assets to cover a budget deficit driven by tax cuts directed to the most wealthy is short term thinking. It’s like selling the family business to give the cash to Uncle John to buy his third Porsche.

“Once the assets are privatised, government will no longer receive the dividends from the assets, and so the government’s fiscal position will be worse. And consumers will face monopoly electricity generators,” said Dr Norman.

ENDS

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