PREFU shows need to focus on quality of expenditure

The red ink revealed in today’s Pre-election Economic & Fiscal Update brings a need to focus on the quality of government spending, says Business NZ.

Chief Executive Phil O’Reilly says the new government, whoever that may be, will need to exercise great discipline.

“The accounts show no room for anything other than quality spending. Examples of poor quality spending are not hard to find – giving free money to students, for example, or recycling money through Working for Families with its wasteful churning effect.

“On the other hand, well designed tax reform or quality infrastructure development more likely come under the category of quality spending, as these provide incentives for productivity and growth.

“Business NZ will apply the litmus test of ‘quality spending’ to all political party promises around future expenditure.”