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Bill English A Sheep In Cullen's Clothing

Posted on 29 Apr 2009

ACT New Zealand Finance Spokesman Sir Roger Douglas today described Finance Minister Bill English as nothing more than a National Party version of Dr Michael Cullen - who promised New Zealand tax cuts but never actually delivered the goods.

"The Government pretends it has no choice but to renege on the promised tax cuts - Mr English is just too scared to get his hands dirty and actually make the much-needed, tough decisions," Sir Roger said.

"But National is down-playing the fact that it actually has two options: honour its tax cut promises and make up for reduced tax revenue by cutting low-quality Government spending, or continue to collect high taxes to throw at low-quality Government projects - as it is now.

"While the first is the quality option, we can be sure that Mr English will take the second.

"Thanks to Labour we are now well-versed in the outcome of high Government spending: high taxes, low productivity, and low wages. To break this cycle we must lower Government spending which, in turn, will allow us to lower taxes and result in high productivity growth.

"Government spending is not a panacea for our problems. Our net external debt currently stands at $167 billion - should we really wait until it reaches $200 billion before we do something about it?

"It's time for National to put New Zealand first - to stop blaming Labour for poor quality spending and start dealing to it. National must live up to the principles it claims to stand for: individual freedom, competitive enterprise, and limited Government.

"New Zealanders voted for National because it was time for a change - so isn't it time for National and Mr English to actually make some changes?" Sir Roger said


English Talks The Talk - Doesn't Walk The Walk

Posted on 23 Apr 2009

ACT New Zealand Finance Spokesman Sir Roger Douglas today urged Finance Minister Bill English to stop simply paying lip service to New Zealand's economic problems and start focussing on developing real solutions for the good of the country.

"When will the Minister actually front up with a coherent plan to tame the Government spending that he likes to talk about so much?" Sir Roger said.

"Mr English talks of excessive spending - a 51 percent increase in the past five years - and the harms of debt estimated to reach $30,000 for every New Zealander by 2023. But then he crows that 'his Budget would allow for more spending than Labour's last year'.

"This is an embarrassment - more borrow-and-spend from a Party that supposedly supports limited Government? Get real.
"Any promise of considerable new spending in this and future Budgets is really a promise for higher debt, more interest payments - and, ultimately, higher taxes.

"Government cannot borrow and spend indefinitely. There's only one solution: cap spending at current levels, allowing increases only for inflation and population growth. No one can spend more than they earn in the long term - a lesson the Government must learn.

"Worse still, rather than cutting spending and taxes, Mr English is reneging on tax cuts and INCREASING spending. For a man who's supposedly willing to make tough trade-offs, he's picking the soft-options … business as usual for Government, I suppose," Sir Roger said.


Do We Really Want More Of The Same?

Posted on 21 Apr 2009

The OECD report released last week confirms all of ACT's warnings: New Zealand is one of the world's most indebted countries, has one of the largest current account deficits, and has had low productivity growth for the past 12 years.

This has created a low-wage economy - but Finance Minister Bill English is unwilling to heed the report's advice.

Denying reality is never a good way to determine policy. National must seriously consider the OECD's advice and, unless he considers all the options on the table, Mr English cannot claim to be genuinely interested in fixing the economy.

But Mr English continues to either sit on his hands or move in the wrong direction. While the OECD tells us to sell poorly-managed State assets, National promised to retain State assets - and is now beginning to stack them with political appointments just as Labour did.

The OECD reports that health spending is out of control and can only be tamed by introducing greater public/private competition. National TALKS about allowing competition in health services - but we need action. We need to privatise ACC and utilise private health services before we will see any benefits.

Further, the burgeoning cost of superannuation caused by retiring baby boomers is unsustainable. If we act now, we can decrease the pain in the long term. In the short term, the age of entitlement will have to rise - as the OECD advises - or we will continue to slide behind other nations even faster. In the longer term, we must move away from the current superannuation system towards one that encourages people to save.

When you're in a hole, you need to look at all possible ways to get out. We shouldn't ignore advice simply because Mr English doesn't want to hear it. In fact most of the advice, if followed, would create the kind of growth that occurred from 1984-96. While Mr English is not listening, Labour is moving in the opposite direction to that needed - continuing to have faith in politicians and bureaucrats to spend money more wisely than individuals.

There's an old saying: 'if you always do what you've always done, you'll always get what you've always got'. If we continue with what we've done in the past 12 years, the results will be predictable. Another 12 years of the same means soaring Government spending, increased taxes, and low job and wage growth.

Today, after 12 years of Labour, the average family is $50,000 worse off per year than they would have been with lower taxes and higher growth. Are you really willing to make that sacrifice again so that smug politicians in Wellington feel powerful?

Alternatively we can aim for productivity growth. The reforms of 1984-96 created a platform for high growth, high wages, and healthy economic wellbeing. The OECD is asking us to consider our options and, when you're stuck in a hole, you have little to lose. If we implemented the reforms well, we would all gain.

- Sir Roger Douglas


Time For A Fiscal Diet - Not A Tax Deferral

Posted on 31 Mar 2009

It is time for New Zealand to face facts and realise that the Government needs to go on a fiscal diet, ACT New Zealand Finance Spokesman Sir Roger Douglas said today.

"The bureaucracy has become engorged on an endless buffet of taxpayer dollars. Unless we address this problem, tax cuts are unaffordable and illusory," Sir Roger said today.

"No household can reduce the amount it earns while increasing the amount it spends - so why does the Government think that it is any different?

"Core Crown expenditure is set to rise under National, and it is lunacy to cut taxes at the same time. Real tax cuts require a corresponding reduction in Government spending.

"Any dollar we borrow for tax cuts must be repaid with interest. According to the 'New Zealand Herald', these tax cuts are worth $1 billion a year. In reality, five years from now this will cost us $1.4 billion once we include interest. The dollar cost of borrowing, assuming an interest rate of seven percent per annum, is shown below:

Year Total cost of borrowing

2008 $1.00
2009 $1.07
2010 $1.14
2011 $1.23
2012 $1.31
2013 $1.40

"What is needed is a leaner approach. ACT supports tax cuts, but what we are getting under National is a tax deferral. The only type of sustainable tax cuts are those coupled with a reduction in expenditure," said Sir Roger.


Govt Must Set Out Plan To Restore Growth

Posted on 27 Mar 2009

ACT New Zealand Finance Spokesman Sir Roger Douglas today urged the Government to set out a clear action plan to restore the country to growth, following the release of GDP figures showing that the national economy contracted in the fourth quarter of 2008 by 0.9 percent.

"We are today poorer than we were 12 months ago," Sir Roger said.

"National appears to buying into the wrong advice that it has been receiving from Treasury and - more particularly - the Reserve Bank, on when we will be out of the recession. It's time for all of us to realise the magnitude of our economic troubles.

"The only people who seem to be realising the full scale of our economic crisis are those actually experiencing it. Bureaucrats should be ashamed for complaining about small cuts in their numbers. They have some of the country's most secure jobs and are well paid. It's time the public sector bore more of the burden of economic contraction. That's only fair.

"If you're in a hole, stop digging. We must stop blaming the US financial collapse for our problems. We've been in a recession longer, and there's little we can do to stop international markets affecting us.

"Where we DO have control is at home. Our economic growth has been dragged down by a parasitic and bloated Government. If we make our economy more productive, we will be able to move out of the recession and make New Zealand wealthy again.

"Don't buy the lies. Spending is no solution to a recession, and Government debt cannot be a solution to household debt.

"So long as the Government is wedded to monopoly delivery of social services, we will continue to plod along. Only by restoring control and choice to the individual can we increase productivity in social services. That means more operations, better education, and a sustainable welfare insurance programme. It is good for the ordinary person.

"We all know that monopolies are inefficient, so let's end monopolistic State services and rely on competition to drive the productivity we so desperately need to become wealthy," Sir Roger said.