Act's so-called economic policy is nothing more than a repetition of creative accounting plus a belief that poorly argued economic theory will somehow create a miraculous number of jobs and lead to fiscal outcomes that can be justified, says Labour deputy leader Michael Cullen.

"When one cuts down Act's policy to what it is actually trying to say we end up with three very clear elements," Dr Cullen said.

"Firstly, if we fail to provide additional expenditure in areas like health and education then the rich can have a large tax cut even though this will mean a lower standard of living for low and middle income families.

"Secondly, and most extraordinarily, Act continues to argue that it has somehow found a buyer for TVNZ who will pay $1200 million more than it is worth on the government's books. Without that initial $1200 million in the first Budget, Act's budgets fall to pieces completely. Act is yet to explain who this strange business is that is going to pay for TVNZ many times the value that the government itself places upon it.

"Thirdly, Act continues to rely on studies commissioned by the IRD which have been shown by many independent experts to be totally unreliable and fallacious. These studies are not, as Act claims, IRD's own studies. They are ones commissioned by the IRD. The basic economic model on which these studies were based bears no relationship to any real economy. The data included in these studies bears no relationship to any known economic series published in New Zealand. The economic and statistical analysis of the data is nonsense by any proper and recognised standards.

"Mr Prebble keeps insisting, along with Mr Hide, that public policy can be based on studies which have been uniformly scorned by serious economic analysts. Labour certainly does not base its economic policies on such dubious studies.

"The facts are very simple. Under Act's policies, Mrs Shipley gets a $450 a week tax cut. The bulk of low and middle income families have to pay more for health, more for education, and have a less secure superannuation scheme to look forward to," Dr Cullen said.

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