8 July 2002

“New Zealand has performed well through the global downturn and is projected to continue growing at around 3 per cent a year over the next four years,” Finance Minister Michael Cullen said today.

“But to return to the top half of the OECD, we need to lift our sustainable growth rate and - because we are Labour - we are determined to do this while also protecting the environment and promoting social equity.

“We have established our credentials as economic and fiscal managers and have successfully asserted a constructive role for the government in the economy. We know there is no single bullet solution and that for change to succeed, it needs to be supported by the majority of the population.

“So we have sought to progress incrementally across a broad front and to work in partnership with other stakeholders, including local government, the tertiary sector, business and the union movement.

“We will continue with this approach in our next term,” Dr Cullen said.

Specific commitments include:

- promoting economic transformation through support for research, science and technology and through the innovation and growth framework

- ensuring that the Policy Targets Agreement negotiated with the next Reserve Bank Governor clearly reflects the government’s intention that the conduct of monetary policy be sufficiently flexible to maintain price stability while also supporting growth

- initiating discussions between business, the unions and relevant government agencies to identify ways to lift productivity

- encouraging the development of employment based but portable superannuation schemes

- reforming the cross border tax regime

- addressing the infrastructural deficit inherited from nine years of National-led government, including through the formation of public-private partnerships

- securing the future of New Zealand Superannuation through contributions to the New Zealand Superannuation Fund

- continuing to reduce business compliance costs and to simplify the tax system, especially for small and medium-sized businesses

- examining the introduction of a dedicated health tax to replace an equivalent amount of income tax

- expanding and fine-tuning the supports provided to business and the regions through Industry New Zealand

- promoting the New Zealand brand abroad, and attracting more productive foreign direct investment to New Zealand.

“The next Labour government will achieve progress in all these areas while also maintaining a strong set of Crown accounts. We will continue to run operating surpluses sufficient to meet our payments to the Super Fund while also meeting our fiscal target of keeping gross debt below 30 percent of GDP on average across the economic cycle.

“No other political party is offering such a balanced, far-sighted and responsible set of policies and objectives,” Dr Cullen said.

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