Big Surplus Conceals Huge Spending Budget
Media Release Thursday, May 23rd, 2002
Big surplus camouflages huge spending Budget
The huge $3.31 billion increase in new spending in the Budget for the next financial year is more than double the increase in new spending for the past two years combined, the Employers & Manufacturers Association (Northern) says.
"Despite the huge increase in spending, Government's surplus is a further $2.6 billion," said EMA chief executive, Alasdair Thompson.
"In other words, if Government made no spending increases it would have had a surplus of $6 billion, or about seven per cent of its total income.
"The figures are a reflection of the nation's economic performance due to robust export earnings enjoyed over the past year.
"The measure of the Budget is how well Government directs its spending to deliver far stronger economic growth, and raise our standards of living. It falls short of business expectations in that it lacks a sense of urgency over promoting the need for faster growth.
"The surpluses are expected to go on increasing up to $4.25 billion by 2006 though Government indebtedness also increases up to $40.7 billion in that year.
"Business would have preferred Government to pay off debt faster instead of spending as much, especially with our terms of trade sliding backwards now.
"Government also believes it knows not only how to spend better than people do, but also how to take more than it needs from them, and do our saving as well.
"Nevertheless among the encouraging items we welcome are:
* the goal of doubling those in modern apprentices to 6000 by 2003, with $41 million to help the goal.
* $14 million to the Industry Training Fund
over the next three years,
which is still not sufficient.
* the big commitment to rolling out broadband connectivity
* $100 million extra over the next four years to Vote: Research, Science and Technology, $48 million of which is to go into partnership research with private sector enterprises.
* $34 million more to go into basic research.
"The time Dr Cullen took to explain his opposition to lower taxes demonstrates he hasn't yet taken the time to consider the advantages of lowering company tax rates.
"He is plainly confused over the difference between the withholding taxation character of company taxes on the one hand and which we advocate, and personal taxes on the other."
Comments: Alasdair Thompson 09 367 0911 (b)
09 303 3951 (h)
0274 982 024