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Thursday, May 20

Borrowing for tax cuts irresponsible, unfair

Borrowing to fund tax cuts for the wealthy, new motorways, and subsidies for greenhouse polluters is fiscally irresponsible, the Green Party said today.

“Now is not the time to add to the deficit position of the Government through poor quality spending,” said Green Party Co-leader Dr Russel Norman.

“Tax cuts for the wealthy are a poor quality spend. Levels of income tax are not a significant factor in economic prosperity, and there is no strong evidence that lower taxes assist economic development.

“On the other hand, there is a wealth of evidence that the widening inequality these tax cuts will fuel will hurt everyone, rich and poor alike. The more unequal a society is, the higher its rates of crime, mental illness, obesity, and incarceration.”

The Government has confirmed in Oral Questions earlier this month that they remain committed to their $11 billion programme of building new motorways with low benefit cost ratios, two of which have negative benefit cost ratios (Transmission Gully and the Pūhoi to Wellsford state highway).

“It’s not fiscally prudent for this Government to be borrowing while simultaneously investing in new motorways where the costs outweigh the benefits,” said Dr Norman.

“The Pūhoi to Wellsford motorway is a classic example of a holiday highway built by the National Government to secure them a seat in Rodney at the next election. This is not a prudent investment of taxpayer funds.

“Finally, the Government’s recent revisions of the Emissions Trading Scheme have resulted in hundreds of firms lining up to receive subsidies to pollute greenhouse gases. Taxpayers are effectively footing the bill to warm the climate.

“John Key’s Budget tomorrow will make it abundantly clear that their priority is to help big business and the wealthy. And they’re even willing to borrow to do this,” said Dr Norman.