Labour and Alliance Budgets donÆt add up
Five reasons why the Labour and Alliance Budgets donÆt add up
Sunday 14th Nov 1999
Rodney Hide
1. WhereÆs
the missing $6 billion?
Labour was promising an extra
$8.4 billion in 1996 over three years. Now
itÆs
promising just $2.4 billion. Labour has not
explained what policies have been
dropped to save $6
billion.
Alliance was promising an extra $12.4 billion
in 1996 over three years. Now
its promising an extra
$6.5 billion. Alliance has not explained what
policies
have been dropped to save $6 billion.
2. Heroic growth assumptions
Labour (like the Alliance)
assumes growth of over three percent a year. This
wonÆt
happen with an 18 percent increase in the top rate of tax,
a return to
union domination, and re-nationalising
ACC.
3. Health cuts?
LabourÆs Budget increases
Health spending by just $315 million over three
years.
Treasury is allowing for a $534 million increase. What
Labour is
promising is less spending than National but
as a credit card commitment will
ôcut waiting times for
surgeryö. It doesnÆt add up.
4. Tariffs make poor people poorer
The AllianceÆs ten percent
across-the-board tariff will put up the price of
goods
by ten percent. Low income people will have to
pay more û for
everything.
5. Financial Transactions Tax wonÆt work
The Alliance assume
that every dollar spent goes through the banking
system
hundreds of times. This isnÆt so now, and will
be even less so if AllianceÆs
Financial Transaction Tax
was introduced. Ninety percent of all transactions
are
performed by a small group of traders who can easily
shift transactions
offshore. Big traders will switch
from gross reconciliation to net. They will
also settle
up less frequently. The Alliance Financial Transactions Tax
will
raise less than ten percent of what the Alliance
assume.
ENDS