Treasury BIM exposes National's shortcomings

The Treasury’s briefing paper underlines the poverty of National’s ‘recipe’ for economic recovery in New Zealand, says Labour’s Finance spokesperson David Parker.

“Under National’s economic settings, the country continues to get poorer,” David Parker said.

“A combination of the sale of New Zealand land and other asset sales and an under-performing economy will mean that our net international liabilities --- what we owe the rest of the world --- are projected to get worse by 10 per cent of GDP over the next five years.

“The underlying theme of the briefing is that structural problems need structural solutions, but Treasury is light on specific strategies,” David Parker said. “In that respect, it is a mirror of National’s own inadequacies.

“Retrenchment is an insufficient plan to get our economy growing and stop our international liabilities growing.

“The Government needs to get the investment signal right to encourage investment in the productive export sector. That means an initiative such as a capital gains tax, but the Government is too gutless to go down such a path.

“The Treasury implies a need to get real about the age of entitlement to national superannuation, even if it fails to declare its hand on what should be done,” David Parker said. “But don’t expect National to get real any time soon, because that would entail having a plan.

“The real risk ahead is that National will continue to ignore important parts of the economic mix.

“It will leave the investment signal unbalanced, so that middle New Zealanders continue to pay too much for services that are constantly being squeezed, and that may, in some cases, disappear altogether.

“We are getting poorer as a nation because we are not saving enough, and because we are not directing our investment into the productive export economy,” David Parker said. “The best way to get out of debt is to generate growth.”