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Economy Below Worst-Case Track, Says Reserve Bank

Economy Below Worst-Case Track, Says Reserve Bank

9 December 2010 – Media Release

Labour’s Finance spokesperson David Cunliffe says the New Zealand economy is tracking below worst case projections, according to today’s Reserve Bank monetary policy statement.

“The recovery is mired, the Government has done nothing to help, and the result is that Kiwis are worse off now than the day National was elected,” David Cunliffe said.

“Today’s very serious Reserve Bank projections show growth projections for mid-2011 cut by a full percent (compared to just three months ago), unemployment staying above 6 percent until after the next election, and fiscal deficits skyrocketing.

“The result is an economic track as bad as, or worse than, the worst case scenario laid out in Budget 2010,” David Cunliffe said.

“Quite simply this is conclusive proof Bill English and John Key have utterly failed the test of economic management.

“Their toxic combination of unaffordable tax cuts for the rich, higher GST, government charges and higher inflation for everyone, as well as the abject lack of a plan for growth and jobs, has seen New Zealand slip backward, not move forward.

“Kiwis are worse off today than they were during the recession.

“The Reserve Bank’s latest projections of inflation rising to 5 percent next year while growth drops a full percent to only 1.7 percent in mid-2011 risks stagflation if the National Government responds with further fiscal cuts that take demand out of the economy.

“Catching Australia has now long since become a vain hope,” David Cunliffe said. “Catching up to where New Zealand was in 2008 will be the first priority job for the next Labour Government.”


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