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Borrow and hope: National must stop passing the buck

14 December 2010 Media Statement

Borrow and hope: National must stop passing the buck

After two years passing the buck, National must now take responsibility for its mismanagement of the economy and the government finances, says Labour’s Associate Finance spokesperson David Parker.

Commenting on today’s HYEFU and Budget Policy Statement, David Parker said: “The chickens are well and truly coming home to roost for National, and they now need to accept it is the decisions they have made that have caused the accounts to deteriorate.

“John Key and Bill English have made every excuse in the world for New Zealand’s deteriorating position and its stumbling progress out of recession,” David Parker said. “They’ve blamed the former Labour government, they’ve blamed the Canterbury earthquake, despite record commodity prices they’ve blamed a slower than expected recovery, they’ve blamed a decline in the tax take, which they say is unexpected--- but they haven’t blamed themselves.

“They can’t shun responsibility any longer. Their recipe of a tax switch which delivers only for the wealthy coupled with a national cycleway that has only provided a handful of jobs is no substitute for an economic plan to drive the recovery.”

David Parker said the Government could no longer escape the economic facts for which they were responsible.

o The forecast deficit has blown out by $2.5 billion over the past six months.

o Revenue is down across the board, but especially in the corporate tax take, as the recovery stalls.

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o Growth is down and is forecast to remain muted in the foreseeable future except for one year as quake recovery work and the Rugby World Cup kick in.

o Net debt is predicted to double over the next five years.

o Every day it’s becoming clearer that tax cuts for the wealthy are being financed out of borrowing. National’s strategy is ‘borrow and hope’.

“National needs to front up and admit that New Zealand is going backward under its economic mismanagement,” David Parker said.

“Having run up such a large deficit, National now admits it intends further cuts to education, health and other social services that New Zealanders rely upon. Look out also for National borrowing more money via SOEs to disguise the size of the hole they have created. National came to office lacking a sound economic plan. Their only significant policy – tax cuts weighted to those best off – is not working, and was never going to.”

ENDS

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