February 8, 2011

Selling assets and cutting yet more public services will not lift New Zealand’s economy says the Public Service Association (PSA).

Speaking at the opening of Parliament today the Prime Minister said the government would focus on savings, investment and exports and continue to rein in spending.

But PSA National Secretary Richard Wagstaff says it is time the government came clean on its debt message.

“New Zealand has one of the lowest levels of public debt in the OECD. Cutting services and selling public assets at bargain basement prices won’t solve our debt problem because the majority of New Zealand’s debt is private not public.

“Selling assets simply means the government will lose for ever the income they generate.

“International evidence shows that governments often have to bail out the assets even after they’ve been sold.

“We’ve been warning against this for some time and have brought privatisation expert David Hall out from the UK this week to talk to ministers and the public about the high risks associated with asset sales and public-private partnerships.

“Over 150 years of research in countries around the world shows economic growth and development is intrinsically linked to a country’s investment in public services.

“It’s time John Key and his government acted on the evidence that shows asset sales and public-private partnerships don’t work.

“The Prime Minister’s speech shows a worrying lack of vision from the government.

“Sticking with old, tired messages and falsehoods about trimming bureaucracy in favour of frontline services isn’t enough anymore.

If affordability was the really the issue why did the government introduce tax cuts last year?

“Three years ago John Key promised there would be no wholesale restructuring of the public sector, no cuts to public services and that tax cuts would not come at their expense.

“The National government has done all of the above. It’s time it admitted it’s not working,” says Richard Wagstaff.

ENDS

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