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Hon Dr Michael Cullen
Minister of Finance

21 September 2005 Media Statement

BOP deficit shows risks in National’s policies

“The sharp deterioration in the current account reinforces my warnings about the risks in National’s election policies,” Finance Minister Michael Cullen said today.

Dr Cullen was commenting on the balance of payments figures for the June quarter showing a deficit for the year of close to $12 billion or around 8 per cent of GDP.

“These results demonstrate that this is no time to be stimulating demand in the economy through across the board tax cuts. Instead the focus must be on assisting exporters and, in the longer term, on encouraging New Zealanders to save more through initiatives such as KiwiSaver.

“They also reinforce the need to maintain a strong fiscal position to lean against the effects of high, debt-financed consumption in the household sector,” Dr Cullen said.

ENDS

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