Hon Michael Cullen
Minister of Finance

5 September 2005 Media Statement

National must be made to come clean

Finance Minister Michael Cullen today accused National of trying to buy their way to power and challenged it to come clean about how it plans to fund its tax cuts and other promises.

“National’s tax cuts would cost a whopping $9.95 billion over four years. They claim they would fund this from projected operating surpluses and through a mix of extra borrowing and spending cuts. But, as the [attached] analysis shows, National’s numbers don’t add up,” Dr Cullen said.

“First, there is no uncommitted surplus. Instead Treasury is projecting a cash deficit over the four year forecast period of $4.16 billion.

“National’s additional borrowing would be on top of that amount.”

Dr Cullen said the net cost of National’s tax cuts over and above what a Labour government would spend was $7.2 billion. Deduct from this the $3.5 billion in extra debt they say they would take on, and they still had a further $3.7 billion to find by way of spending cuts.

“Make no mistake, this is a significant amount and would entail cuts to health and education and other public services valued by New Zealanders.

“National has identified some cuts – the abolition of KiwiSaver, the removal of the indexation of tax thresholds and the scrapping of the planned $10 per child per week increase in Working for Families. But this leaves them with a $2.75 billion shortfall.

“This analysis shows National’s numbers simply don’t stack up. Clearly they are planning much deeper spending cuts than they are prepared to tell the public about in this election campaign,” Dr Cullen said.

Attached: analysis of National’s spending and tax commitments

ENDS

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