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National to balance the books sooner, repay debt

National to balance the books sooner, repay debt

National is on track to get the Government's books back to surplus by 2014/15 and start repaying debt when most other countries are still running deficits and borrowing more, National Party Leader John Key and Finance Spokesman Bill English said today.

This is in stark contrast to Labour, whose gimmicks and growing list of expensive promises will create a black hole of more than $16 billion in the government's accounts over the next four years alone - costing thousands of jobs and pushing up interest rates for families and businesses.

"National has a straightforward and comprehensive plan to build a more competitive economy," Mr Key said today in launching National's finance policy in Wellington.

"First, we're balancing the books sooner by getting back to surplus in three years.

That's important because it means less debt and lower interest rates for households and businesses.

"The Savings Working Group said getting back to surplus is the most important thing we can do to increase genuine national savings and reduce New Zealand's longstanding reliance on foreign debt.

"Second, we're creating incentives for people to work hard, save and get ahead, through changes to tax and welfare.

"And third, we're building better roads, broadband and other infrastructure so businesses can grow.

"Through these actions, we're creating a more competitive economy and backing Kiwis' ability to get out there and take on the world."

Mr English confirmed National will keep a tight rein on spending over the next three years to achieve budget surplus, as part of its wider programme of responsible and balanced economic management.

"We will need to work hard and remain focused to get back to surplus," Mr English said. "National will stick to its annual operating allowances of no more than $800 million in 2012/13 and 2013/14, and $1.2 billion in 2014/15.

"This new spending will go to health, education and a few carefully-targeted initiatives.

"There will be no new capital allowances until Budget 2017. Instead, the estimated $5-$7 billion proceeds from the mixed ownership model will be invested in National's new Future Investment Fund for priority new assets like modern schools, hospital redevelopments and transport projects.

"We will make these investments without having to borrow from foreign lenders," Mr English said. "That's important when the assets we are managing on behalf of taxpayers are forecast to increase by $22 billion to $267 billion over the next four years.

Mr Key and Mr English said National will continue with its clear plan to build a more competitive economy that sells more to the rest of the world, creates new jobs and provides higher incomes for New Zealanders.

"By contrast, it's the same old Labour wanting to take New Zealand backwards with more borrowing, more spending, more taxes and more costs on businesses," they said.

"These kinds of policies have failed under Labour's watch in the past and they would fail again - at the cost of jobs and living standards for New Zealanders.

"The answer to a debt problem is not to run up more debt," Mr Key and Mr English said.

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