John Key MP
National Party Finance Spokesman

15 September 2005

Labour inflation claim doesn’t stack up

National Party Finance spokesman John Key says Labour’s desperate last stand on interest rates does not stack up.

“Just a day after being forced to release Treasury costings showing how deceptive Labour has been on its student loans bribe, Michael Cullen is again trying to mislead New Zealanders on the effects of National’s fair tax plan.”

Mr Key is commenting on the Reserve Bank Governor’s decision today to leave the official cash rate unchanged.

“National has a balanced fiscal strategy which has been released and cleared by independent experts.

“Tax cuts reduce costs in the economy and improve work incentives, thereby reducing capacity constraints and reducing inflation pressures.

“Under Labour there will be more public spending, less incentive to work, greater incentive to rely on other taxpayers for your income, and thus greater inflation pressure and more upward pressure on interest rates.

“We are seeing that already under Labour. Labour's policies are a recipe for higher interest rates.

“Only National has a fair tax plan that will give the right incentives for working Kiwis,” says Mr Key.

ENDS

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