Labour’s prudent fiscal package will stand New Zealand in good stead

Turbulence in world financial markets validates Labour’s prudent fiscal stance and balanced tax package, says Labour’s Finance spokesperson David Cunliffe.

David Cunliffe said falls today in the NZX and Australia’s S&P/ASX 200 Index, which opened 3.8 percent lower, followed overnight instability in the US and Europe as equity markets slumped.

Concerns were continuing regarding European debt, the delayed resolution of US budget issues and on-going fiscal constraints in Japan, he said.

“We recognise that in the face of such instability it is important that New Zealand’s debt levels are reduced, and that our productive economy is strengthened to help carry New Zealand through.

“New Zealand is relatively better placed than many countries with a strong story to tell in terms of agricultural exports into the growing Asian region, manageable levels of public debt, and a highly-skilled workforce,” David Cunliffe said.

“Labour’s fiscal framework and capital gains tax proposal will ensure that a broad, sound revenue base assists efforts to reduce public debt to zero, and to improve investment incentives for productive enterprise.
“At the same time, income tax rebalancing to improve the affordability of the basics for low-income New Zealanders will help bolster domestic demand,” David Cunliffe said.

“Labour remains committed to prudent and responsible fiscal management in the long-term interests of all New Zealanders.”

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