Surprise Cut First Step Only

ACT leader Richard Prebble welcomed today the Reserve Bank's surprise cut in interest rates.

"This is confirmation of what I have been saying all year - that the economy is slowing. To sustain economic growth it's been clear for some time there was a need to change economic policy.

"Monetary policy changes would be much more effective if they were coupled with a change in the budget.

"The Government's proposal to overtax the country by $4 billion is economically counter-productive.

"The economy would receive a much needed boost with a well-designed tax cut along the lines of the McLeod tax report recommendations to return the surplus to taxpayers," said Mr Prebble.

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