New Zealand well prepared for global slowdown

Labour’s commitment to protecting the security of families will not be compromised during the current period of turbulent global financial markets, Finance Minister Michael Cullen said today.

In an opinion piece released today, Dr Cullen said the Labour-led government’s fiscal policy means that New Zealand is well-prepared to weather the current global slowdown, driven primarily by the weak United States economy.

“Labour has over the past eight years worked very hard to slash the Crown’s gross debt level by half and to strongly build-up financial assets in the Superannuation Fund,” Dr Cullen said. “Labour’s policy has been designed to put all New Zealanders in the best possible position to cope with overseas shocks that can affect our economy from time to time.

“What that means in practice in 2008 is that New Zealanders can count on the government using the strong financial position built-up under Labour to continue to implement policies that will best protect middle and low income families, including the retired, during these times of turbulence in global financial markets.”

Dr Cullen said Labour’s policy is the opposite approach taken from National when it was last in government.

“National’s record is that when the going got tough, it smashed middle and low income families hard, including those on fixed incomes. When the National Party was in government during Asian financial market turbulence in the late 1990s, for example, its policy response was to cut the floor of New Zealand Superannuation.

“When the National Party says it would cut ‘non-growth enhancing government spending,’ we know from its record that what that means in plain English is that it would use any development, including international market turbulence, as an opportunity to hit vulnerable New Zealanders hard,” Michael Cullen said.