12 February 2001 Media Statement

Act and National just plain silly - Cullen

"Claims by National and Act that workers' living standards fell last year and that somehow it is the Government's fault are just plain silly," Finance Minister Michael Cullen said today.

"The annual increase in inflation of 4 percent was strongly influenced by increases in petrol and tobacco.

"It would be illogical to increase tobacco taxes to encourage people to quit smoking, then expect incomes to rise to cover the higher costs. And when petrol prices rise internationally, New Zealanders as a whole are worse off.

"We cannot wish the higher prices away or try to inflate our way around them and it is grossly irresponsible for National and Act to imply we can," Dr Cullen said.

"The fact is that this Government has a policy to protect living standards.
We are protecting the value of the minimum wage and have replaced the Employment Contracts Act with fair labour law. We have raised the pension by $20 a week.

"We have reduced the cost to students of the student loans scheme and have introduced income related state house rentals.

"We are also putting policies in place to increase the number and quality of jobs - and already they are delivering results. A combination of more people in employment, better paid jobs and access to more hours of work pushed total earnings across the workforce as a whole up 6 percent last year.

"This increase is real. It is non-inflationary and based on more production. People are spending what they are earning, not what they are borrowing. The previous government tried to prop up spending with asset sales and unsustainable tax cuts. These were short term "solutions" and damaging.

"Our approach is much healthier as the figures show: the lowest unemployment rate for 12 years, and more money in more pay packets. The facts are what people experience, not the mindless games-playing of the Opposition," Dr Cullen said.

ENDS

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