Bill English MP
National Party Finance Spokesman
24 October 2007

Real surplus more than $10 billion?

National Party Finance spokesman Bill English says an unusually large debt write-off slashed the reported government surplus by nearly $2 billion.

Details in the government accounts published last week show that the government wrote off $1.9 billion of unpaid debts, way above the $419 million written off last year, and much higher than the $82 million average write-off during the six years between 1999 and 2005.

“Had that adjustment not been made, the surplus would have been an embarrassingly large $10 billion.”

Mr English says that apparently the one-off $1.9 billion reduction in the surplus is the result of a new way of calculating what debt should be written off. It includes overdue tax and child support payments, and unpaid court fines.

“Whatever the reason for change, the effect is clear - an $8.7 billion surplus would have come in at more than $10 billion.

“This confirms the OECD statistics last week showing New Zealand has now moved into the top half of developed countries for over-taxation.

“The cumulative effect of Michael Cullen’s hoarding has been that workers on the average wage are little better off after eight years of Labour, once inflation and extra taxation is taken into account.

“The case for lower taxes is absolutely clear. But what we now know is that Dr Cullen has been deliberately building up the ‘kitty’ for an election year spend-a-thon.

“The reality is that what most taxpayers want is the opportunity to make more of their own decisions with the money they work hard for.”

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