Boost investment spend, cut taxes, admin costs: EMA recipe

The trouble with Treasury predictions about where the economy is headed is they are seldom if ever right, says Alasdair Thompson, chief executive of the Employers & Manufacturers Association (Northern).

“Treasury has rarely been right about the huge government surpluses over the past nine years and we have no reason to think they’ll be any better at predicting what’s coming up over the next few years,” Mr Thompson said.

“But Treasury projections are probably the best guide we have.

“To cope with the downturn, business backs the conventional wisdom that says in recession governments should boost investment spending in infrastructure, lower taxes and eliminate unnecessary government spending.

“Dr Cullen has always been reluctant to cut taxes or ramp up spending on infrastructure until recently, but now at least he agrees both are required.

“However in addition to these two factors, National is also committed to eliminating wasteful government spending on administration.

“National’s bigger tax cuts would also put more earnings back in the hands of the private sector for saving, investing or spending, all of which will help ward off the recession we are in.”