Bold budget needed, Business NZ told

Now is the time for a bold budget, Labour Finance spokesman David Cunliffe told a private Business New Zealand audience this morning.

“Given the magnitude of the debt mountain in front of us and the depth of the rut our real economy is stuck in, [now is the time] for decisive moves that will actually fix the structural problems holding us back, not slap on a coat of paint, or pretend that merely balancing the Crown accounts is a substitute for structural change,” Mr Cunliffe said.

It is unlikely the budget will signal that the government is going to address those structural problems, he said.

“National’s solution to the situation it has created is widespread spending cuts that will affect the things that will help us get back on our feet – like KiwiSaver, which allows all New Zealanders to make regular contributions with a mix of their own deductions, government and employer contributions.”

Mr Cunliffe did not release any specific policy to Business New Zealand, instead focusing on the four economic issues Labour thought the budget should address.

It had to grow the economy in a sustainable way, it had to see savings grow and debts fall, it had to focus on the creation of well-paid jobs and it had to ensure that New Zealand is a more equal society, where everyone had the opportunity to achieve their full potential, Mr Cunliffe said.

The fiscal situation facing New Zealand is serious and tough decisions needed to be made to address that, he said.

“We will not oppose prudent fiscal measures just because they involve cutting spending,” Mr Cunliffe said.

“But we will relentlessly expose the hypocrisy of those who preach restraint to the squeezed middle class while practicing favouritism to themselves and to privileged constituencies who either don’t pay their fair share or who need help the least.”

Labour will not allow the government to pretend that fiscal entrenchment is a substitute for a proper economic strategy that will address the key drivers of growth, Mr Cunliffe said.