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Alliance Release Alternative Budget

The Alliance released its alternative budget today, devoting its heaviest spending to health care, tertiary education, jobs, superannuation and housing.

Alliance leader and finance spokesperson Jim Anderton said the Alliance policy would deliver a higher rate of economic growth and more jobs than the National party would deliver, with a significantly lower current account deficit and higher operating surpluses.

The Alliance would spend $2909 million more than National in its third year, or a total of $6492 million over three years. The costings were prepared by independent economic consultancy firm, IES.

'The Alliance is planning to spend amounts comparable to the sums National has given away in tax cuts. The main difference is that where most of the benefit of National's tax cuts went to the highest income earners, the Alliance is spending most heavily on jobs, health care, education and superannuation.

'The Alliance budget differs from other parties because we say that if you want to spend more, you have to raise the revenue. If you want more pie, you have to pay for more pie.

'There has been far too much wish-list politics, where hoped for revenue is being spent before it even exists. Treasurer Bill English announced $400 million of social spending to match his $400 million tax cuts, when in fact he is not really spending an extra $400 million on social services at all. Then he claimed to have unallocated spending of $400 million. The trouble is, that's the money he is giving away in tax cuts. So he has spent the same money three times and can't possibly deliver. If he tries to, he would blow out the current account deficit, which is already precarious.

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'Every other party has seized on Mr English's glib claims and they're all planning to spend the phantom cash as well. Mr English can't call their bluff because he too is planning to spend cash which doesn't exist.

'The Alliance is not playing the wishing and hoping game. We are clearly raising the revenue to pay for our promises.

'The top 5% of income earners will pay more tax, though they will still pay much less than they would pay in Australia. 95% of income earners – everyone earning less than $60,000 a year -- won't pay more income tax under the Alliance.

'The other main source of revenue is a $1 billion tariff on imports from countries other than Australia which will help to reduce the balance of payments deficit and also to protect New Zealand jobs,' Jim Anderton said.

A feature of the Alliance budget is that welfare spending actually declines because of the number of jobs created through the tariff on imports from countries other than Australia, and because of the heavy programme of investment in job-rich new industries.

In all, 90,000 more full-time and part-time jobs would be created.

The budget also makes deep cuts to bureaucracy, such as cutting the $112 million Health Funding Authority and reducing expenditure on state sector consultants and senior executive salaries by $50 million a year.

Instead the money goes directly to front line services, such as making medical prescriptions and doctors visits free, removing tertiary fees and boosting the cash value of NZ Superannuation by $20 a week.


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