Copeland calls for tax incentives for savings

United Future finance spokesman Gordon Copeland today questioned whether the Government had a plan for economic growth, and called upon it to urgently provide front end savings incentives via tax rebates or credits.

"We desperately need to recapitalise this country," he said. "Twenty years ago the problem was public debt. Today it is private debt."

Mr Copeland said the four "key drivers" of economic growth were population, lifting per capita productivity, increasing exports and capital accumulation -- and there was no sign that the Government was recognising these basics.

"New Zealand now has the highest net external debt to GDP level in the OECD. That, coupled with our high interest rates and ongoing balance of payments deficit, means that a high proportion of the wealth earned in this country goes immediately to service overseas debt.

"We urgently need to look at ways of working ourselves out of that situation, and we need to do two things immediately," he said.

"First, we need to encourage private savings, and realistically we are not going to build this country a savings culture unless we are prepared to give some front end incentives via tax rebates or tax credits.

"Second, we need to encourage New Zealanders to invest in this country. In that regard, I am sorry to say that the Government Super Fund Guardians give a poor lead by investing over 70 percent of their funds offshore," he said.

"It makes sense to give preference to onshore investment, otherwise we become part of the problem, not the solution."

Mr Copeland was also critical of the Government approach -- "or lack of it" -- to immigration.

"It is surprising that the Government does not have a population policy. If we look at the Budget policy statement for example, we simply see a bland, unsubstantiated immigration forecast of around 5000 in the years ahead.

"By contrast, United Future has a policy aimed at growing New Zealand's population through both the fertility rate and through consistent, rather than intermittent, long-term immigration," Mr Copeland said.

He said the Government also lacked policy to encourage per capita productivity and growth, while export growth was being "choked off by a premium on the New Zealand exchange rate flowing in turn from the fact that New Zealand's interest rates are now the highest of any developed country".

"That is a serious problem flowing from our present monetary policy mix and needs to be addressed if we are to lift exports to a sustainably higher."

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