More spending, borrowing – when will Labour learn?

Labour continues to make expensive spending promises it could not afford without borrowing hundreds of millions of dollars more from overseas lenders, Finance Minister Bill English says.

“In the past week, it has proposed doubling paid parental leave entitlements, which would cost taxpayers another $150 million a year. “And today, Labour’s leader confirms he backs research and development tax credits, which would cost at least $300 million a year. 

He claims this could be paid for from a new capital gains tax, but that’s not possible as Labour already concedes this would raise little extra revenue in its first few years. “This from a leader who says he will be thrifty with taxpayers’ money, but in reality wants to spend more, borrow more and tax more. 

“Together, these two Labour promises alone would amount to almost $2 billion of more debt over a four-year forecast period. Labour has clearly learned nothing from its past extravagance. Less than five months since the election, it is already going back to its bad old habits. 

 “New Zealanders and businesses are being careful with their own money, prioritising their spending and getting on top of debt. They expect nothing less of the Government. We need only look to many other countries to see the dire consequences of governments spending and borrowing too much.

“This Government does not want that for New Zealand. That’s why we’re focused on getting back to surplus by 2014/15, which will provide us with more choices such as repaying debt, delivering better results from public services and building a more competitive economy based on higher savings and less debt. “It’s time Labour was honest with New Zealanders about precisely how it will pay for its spending promises,” Mr English says.