22 December 2004

Cullen's GDP claims ludicrous, says Key

National Party Finance spokesman John Key describes Finance Minister Michael Cullen's comments today on the September quarter GDP statistics as ludicrous.

"His suggestion that GDP growth over the past five years has translated to a 15% increase in real income per person is so obviously out of step with official figures that you have to wonder whether he actually understands the statistics he is reporting," Mr Key says.

"His own figures, supplied by the Treasury, show that household incomes, when adjusted for inflation and tax, have remained static over the past five years.

Treasury figures show that the average after-tax household income has increased from $49,050 to $54,020, or an increase of 10.1% since 1999/2000.

"But inflation has risen 10.2% over the same period, so, there was no increase in real terms at all," Mr Key says.

"What has happened is that profitability has expanded through the current debt-fuelled property and consumption boom, with incomes rising only slowly, and household debt rising from 100% to over 130% of income over the past five years.

"The size of government has increased, and the slice of tax taken by the Government has increased.

"The only thing that hasn't increased are real household incomes, and Dr Cullen should stop putting spurious figures to pretend otherwise," Mr Key says.

ENDS

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