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Shallow, gimmicky, wrong

Labour
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"More childish fibs from Bill English. If he was less preoccupied with trying to impress his mates in caucus and more serious about New Zealand, he'd spend less time on these cheap gimmicks and more addressing the structural problems in the economy," Labour finance spokesperson Michael Cullen said today.

"Mr English's figures are simply wrong.

"If he had read Labour's industry policy, he would know the additional commitment of $100 million spending will not be reached until the end of the first term, not the first year as he suggests.

"The foreign aid costing is a huge beat-up as Mr English well knows. Labour would not expect to reach the 0.7 percent goal for many years and would expect to make slow progress during the first three years given the difficult fiscal position we stand to inherit from National.

"It's also worth noting that National is already signed up to the OECD's 0.7 percent target.
Are we to conclude therefore that the real difference between the two parties is that Labour is sincere while National is thoroughly cynical in its commitment to the humanitarian goals set by the OECD?

"But it is on the super issue that Mr English really excels himself. Our superannuation policy is not a spending policy but a saving policy. The Superannuation Fund will be raised from existing income taxes. It will not require a tax increase but the commitment it represents will also preclude Labour from cutting personal income taxes.

"That is a key difference between Labour and National. We plan to keep taxes slightly higher in order to pre-fund the costs of supporting the baby boomers in their retirement. National's lower taxes now will mean higher taxes for the workers of the future.

"The additional $1.5 billion to which Mr English refers will be funded by dividing the budget surplus into two parts. The larger part will be held in the Superannuation Fund. The rest will go on to the general Government accounts. Both are forms of saving.

"Mr English has also ignored the extra gst revenue Labour would get as a consequence of restoring the wage floor for the pension back to 65 percent of the average ordinary time weekly wage.

"He is just as much at sea on the macro-figures. Has he forgotten that National has already committed itself to a further $800 million in spending - $400 million in tax cuts and the rest through its dollar for dollar pledge.

"The actual difference in commitments announced so far by Labour and National is only approximately $200 million by the third year. That is more than covered by the $400 million tax increase on incomes over $60,000 that Labour has already announced.

"In fact, taking account of the 1999 budget provision for future initiatives plus Labour's increased revenue less Labour's announced spending commitments and additional expenditure such as the teachers' salary increase already committed by National, there is still about $800 million left in the third year for future initiatives.

"Put it all together and you have more than enough to cover Labour's programme," Dr Cullen said.

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