Key admits he would borrow to fund tax cuts
Mr Key would rather take a risk with our futures as opposed to strengthening it by backing sensible long term tax policies as we have done with KiwiSaver.
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National leader John Key has once again exposed his shallow grasp of fiscal policy by indicating in Parliament today he would borrow to fund future tax cuts, Finance Minister Michael Cullen said today.
"This government is in a positive net asset position thanks to prudent fiscal policy and the build-up of assets in the New Zealand Superannuation Fund," said Dr Cullen. "But excluding the fund, we still have net debt equivalent to around 4.6 per cent of GDP.
"John Key clearly wants to add to that debt because he believes you can borrow against the assets of the fund to finance the tax cuts he so desperately wants.
"This is fiscal lunacy. The assets have been built up for the benefit of future generations, not to be used as collateral for tax cuts today.
"Our net asset position is the envy of countries around the world. It puts us in a strong position to meet the rising costs of an ageing population and help insulate New Zealand from any future economic shock.
"Mr Key should take heed of credit rating agency Standard & Poor's Budget 2007 analysis which stated 'it is very important that New Zealand continues to walk a steady path of fiscal restraint in the face of a range of domestic imbalances.'
"Mr Key would rather take a risk with our futures as opposed to strengthening it by backing sensible long term tax policies as we have done with KiwiSaver," said Dr Cullen.
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National leader John Key has once again exposed his shallow grasp of fiscal policy by indicating in Parliament today he would borrow to fund future tax cuts, Finance Minister Michael Cullen said today.
"This government is in a positive net asset position thanks to prudent fiscal policy and the build-up of assets in the New Zealand Superannuation Fund," said Dr Cullen. "But excluding the fund, we still have net debt equivalent to around 4.6 per cent of GDP.
"John Key clearly wants to add to that debt because he believes you can borrow against the assets of the fund to finance the tax cuts he so desperately wants.
"This is fiscal lunacy. The assets have been built up for the benefit of future generations, not to be used as collateral for tax cuts today.
"Our net asset position is the envy of countries around the world. It puts us in a strong position to meet the rising costs of an ageing population and help insulate New Zealand from any future economic shock.
"Mr Key should take heed of credit rating agency Standard & Poor's Budget 2007 analysis which stated 'it is very important that New Zealand continues to walk a steady path of fiscal restraint in the face of a range of domestic imbalances.'
"Mr Key would rather take a risk with our futures as opposed to strengthening it by backing sensible long term tax policies as we have done with KiwiSaver," said Dr Cullen.