News release

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04 July 2007
NEWS: Papers confirm higher tax and bigger spending

National Party Leader John Key says Cabinet papers confirm in stark terms the high tax, big spending choices that the Helen Clark-led Government has made over the past eight years.

"It's now patently clear to hardworking Kiwis that Labour won't be sharing any of the gains from recent economic buoyancy by lowering taxes.  They can't be trusted on tax."

The papers say that not only is Labour unwilling to deliver tax cuts in the medium term, but also that the Government is effectively counting on tax to rise in order to fund its runaway spending. 

"The chewing gum tax cuts were axed to pay for Labour's promises at the last election.  Clearly, under Labour the over-taxation of New Zealanders will always take second place to things like departmental advertising budgets, bonuses for corrections staff, prison landscaping and bureaucrats."

"A National-led Government will introduce a credible programme of tax cuts."

Mr Key says exporters who are also feeling the pinch from the soaring Kiwi dollar would welcome Government restraint.

"The Reserve Bank Governor has been repeatedly warning Helen Clark that her big spending plans are putting pressure on interest rates and subsequently helping to keep the dollar high.

"Because of Labour, the dollar and interest rates will stay higher for longer.  Householders and exporters will continue to pay the price for Labour's lack of discipline.

"Helen Clark and Labour keep trying to say the economic climate is someone else's problem.  Unfortunately for them, the Treasury papers lay a good portion of blame back in their laps."