Reacting to Labour’s newly announced “Best Start” policy, National launched into a wholly predictable – and somewhat repetitive – reactionary condemnation of the plan.
According to “Economic Development” Minister, Steven Joyce,
“Once again, the moment we get a lift in the economy, they want to start bribing people with massive extra spending. We haven’t even got to the end of January and Labour and the Greens are already promising to spend the thick end of an extra three quarters of a billion dollars a year. You can’t spend your way to prosperity. This Government understands that and is building a stronger economy to provide higher incomes for Kiwi families.”
“Several months ago I made it clear that our tax plans would be hermetically sealed from other government spending tracks. That continues to be the case.
Paying for this package will not require additional borrowing. It will not require any cuts to public services.”
Unfortunately, like so many of Key’s promises, it was hollow rhetoric. Blatant lies, to be more accurate.
By March 2009, as the GFC and recession impacted on our economy, government revenue was already falling,
“The New Zealand government’s operating balance before gains and losses (OBEGAL) for the seven months ended January 31 was NZ$600 million, which was NZ$800 million below the pre-election update and NZ$300 million below December forecasts, Treasury said. Tax revenue and receipts during the period were NZ$500 million lower than the pre-election forecast.
Meanwhile, Treasury also disclosed a NZ$15.4 billion rise in Gross Sovereign Issued Debt to NZ$45.4 billion (25.3% of GDP) from the pre-election forecast.”
Despite worsening indicators and falling government tax revenue, in April 2009, the newly-elected National Government enacted it’s first round of tax cuts. The second was scheduled for October 2010.
The result was wholly predictable. As the government lost hundreds of millions in foregone revenue, National cut state sector services – despite Key’s promise not to make such cuts,
“Government biosecurity cut backs leaves billion dollar industry vulnerable
The National Government’s decision to make more than 50 workers whose job it is to protect New Zealand from biosecurity risks leaves this country’s primary production industries vulnerable, Labour Biosecurity spokesperson Damien O’Connor says.”
As Andrea Vance wrote in October 2010,
“More than 2000 positions have been cut from the core public service since the Government capped numbers soon after it came to power.
State Services Minister Tony Ryall said yesterday more jobs were likely to go as many government departments would have little or no increase in funding in the next few years.”
“The Government is refusing to rule out further cuts to early childhood education as reductions affecting more than 2200 centres kick in today.
The Government announced at last year’s Budget it would eliminate the top rate of funding to early childhood centres.
Later in the year, Education Minister Anne Tolley announced an ECE taskforce would review the effectiveness of spending in the sector and propose new ideas.
Asked yesterday if she could rule out further cuts in this year’s Budget, she said: “Any budget decisions will be announced on Budget day.”
Tolley said the Government was “bringing spending under control”.
Labour says thousands of families will face average fee increases of $20 to $45 as a result of the funding cuts.
It has promised to restore funding and will today put its name to a petition against any more cuts.
Ministry of Education figures show 2249 of the country’s 5251 services will be affected by the cut.“
“David Cunliffe’s developing a reputation around Parliament for being very tricky. He [Cunliffe] just needs to learn to be up front with the public so they can actually trust his word. I read his speeches and now after a number of examples of this, I really question whether the guy is telling me the truth …”
Labour Party: Best Start Package
Marketwatch: The fall of Lehman Brothers
CNN Money: New recession worry: Bank failures
Washington Post: Treasury to Rescue Fannie and Freddie
Huffington Post: Russia Halts Trading After 17% Share Price Fall
NZ Herald: Recession confirmed – GDP falls
Fairfax media: NZ Super Fund drops $880.75m
NZ Herald: National sticking to $50-a-week tax cuts
Dominion Post: Cullen to Nats: will you borrow for tax cuts?
John Key Website: NEWS: Economic plan: A tax package for the times
John Key Website: SPEECH: National’s Economic Management Plan
Scoop Media: Biosecurity cut backs leaves industry vulnerable
Fairfax media: ‘Unrealistic’ workloads on civil servants after cuts
NZ Herald: Govt borrowing $380m a week
Fairfax media: Government debt rises to $71.6 billion
Fairfax media: Further early childhood education cuts possible
Scoop Media: National Election Pledge Card
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The Standard: Gower plays a shocker
Above image acknowledgment: Francis Owen
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