National leader John Key has promised to spend an extra $5 billion on infrastructure by 2014, but Labour has labelled its plans to borrow to pay for it as "reckless".
Mr Key today outlined a bold plan to jump start New Zealand's faltering economy by fast-tracking the planning and building of key infrastructure projects such as roads.
But his plan to pay for it by lifting Crown debt by about 10 percent has opened up a key election battleground, with Prime Minister Helen Clark accusing National of taking risks with the economy.
Mr Key's infrastructure salvo follows his announcement to National's annual conference yesterday the party would bring forward a second round of tax cuts to April next year and deliver a third in April 2010.
National would not borrow for its bigger, faster tax cuts, but Mr Key signalled cuts in other areas were likely.
There would be "modest" changes to KiwiSaver and National would alter the shape of the second and third rounds of Labour's promised tax cuts.
"We've made some choices, we've got some priorities," he told reporters.
"New Zealanders will have to assess the relative merits of what we are supporting and what we are not."
However finance spokesman Bill English assured conference delegates National would tolerate budget deficits in order to maintain core social spending.
Mr Key refused to say if average wage earners could expect a $50 a week tax cut under National -- a figure he mentioned in interviews ahead of this year's budget -- with the details being kept under wraps until the election campaign.
Mr Key outlined the central parts of National's infrastructure plan to the party's annual conference in Wellington today.
He said National would spend up to $500 million more than Labour on key infrastructure projects.
Taking into account its six year $1.5 billion broadband plan, it would spend about $5 billion extra on infrastructure by 2014, lifting the country's debt to GDP ratio from about 20 percent to 22 percent.
But Mr Key said the extra spending would boost growth in the long term.
"National believes building better infrastructure is essential to fuelling higher levels of non-inflationary economic growth for years to come."
Key features include developing a 20-year national infrastructure plan, a streamlined consent process for priority projects that would see decisions made within nine months, and appointing an infrastructure minister.
National would make greater use of infrastructure bonds and public-private partnerships to fund projects and reform the Resource Management Act in its first 100 days of office.
But Prime Minister Helen Clark said National's borrowing plan was "reckless" and amounted to "gambling with the future".
Road, school and hospital building was already going "full tilt" and National's plan was similar to former prime minister Sir Robert Muldoon's debt-ridden "Think Big" programme, she said on TVNZ's Agenda programme.
Finance Minister Michael Cullen said it was impossible to separate National's borrowing from its tax cut plans and the increased debt could do "serious damage" to New Zealand's reputation as an investment destination.
International borrowing costs were rising and now was the wrong time to join the "credit card bandwagon".
I n his conference speech Mr Key also outlined 10 election pledges including retaining superannuation entitlements, capping bureaucrat numbers and a referendum on MMP no later than 2011.
Mr Key and National Party president Judy Kirk warned delegates against complacency in the face of National's large poll lead, saying Labour would do anything to stay in power.
The mood of the 700 delegates attending the conference was buoyant.
This article is tagged with the following keywords. Find out more about MyNBR Tags
Most listened to
- No knockout blows in first presidential debate, says NBR's Nevil Gibson
- Intueri's problems raise questions for the board, says Martin Watson of the Shareholders Association
- ANZ's Philip Borkin and NBR's Jason Walls on what's next for the kiwi dollar on Currency Talk
- AngelEquity's Bill Murphy on why his platform won't cater for retail investors
- Spark exec Jason Paris defends his company's honour after it tops ComCom's most-complained-about list
- FMA lawyer Justin Smith counters the Goldman Sachs defence