18 March 2008

Where would Key rein-in spending from?

National Party leader John Key needs to explain the economic and social rationale behind his demand in Parliament for the government to institute a series of spending cuts.

In the very first question in Parliament today, Mr Key questioned the Prime Minister as to why the Labour-led government has not cut its spending in response to weakness in the global economy.

“What is absolutely clear, as we enter into this period of global economic uncertainty due to weakness in the United States’ economy and financial markets, is that the National Party has not changed its spots since it was last in government in the 1990s,” Finance Minister Michael Cullen said.

“Being in government means you must make responsible choices on how to respond to issues as they arise. The Labour-led government has made the decision not to respond to weakness in the U.S. economy and markets by cutting social services or superannuation.

“When there was weakness in Asian financial markets in the late 1990s, in contrast, the National government of the day responded with what it absurdly called Policies For Progress – a package it proudly announced would deliver $400 million worth of savings in government spending over three years.

“That cruel package of cuts included reducing the floor or New Zealand Superannuation down to just 60 per cent of the average wage, compared with 65 per cent where it had previously been set.

“National’s policies of social services cuts, what it calls “savings,” helped deepen the economy’s weakness at that time.

“And while National in 2008 is on to its fourth new leader since the leader it had in the late 1990s, its proposed policies remain as impractical, and cruel, as ever,” Dr Cullen said.

“Mr Key is being slippery. He should be held to account for exactly how much he would reduce pensions by this time, if given half a chance,” Dr Cullen said.

ENDS

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