Today's decision by the Reserve Bank to cut the official cash rate despite a burgeoning housing bubble in Auckland is yet another warning to the Government that the economy is becoming increasingly vulnerable and unbalanced, Labour’s Finance spokesperson Grant Robertson says.
“Despite the risk of pouring petrol on an overheated Auckland housing market by cutting interest rates, the weakness of the economy, wages and exports has forced the Governor to cut the OCR.
The latest OECD Economic Survey on New Zealand is a stark warning that more must be done if future generations of New Zealanders are to have a decent standard of living and economic opportunity, says Labour’s Finance Spokesperson Grant Robertson.
"The OECD report finds that housing is increasingly unaffordable, inequality and poverty need to be tackled head on and the health of the economy is increasingly at risk from a further downturn in commodity prices. These are warnings that the National government must heed.
Bill English has been forced to admit the asset sales fund has run dry and the Government will have to borrow to build the schools and hospitals they promised would come from the sales proceeds, says Labour’s Finance Spokesperson Grant Robertson.
“Bill English has admitted he has overspent the asset sales Future Investment Fund. There is only $534 million left in the kitty but National has promised a further $680 million from the fund will be spent on schools and hospitals.
National has outstanding promises of almost $1 billion to be spent on health, education and agriculture from the Future Investment Fund but has only $536 million left in the fund, says Labour’s Finance spokesperson Grant Robertson.
“John Key and Bill English promised to spend $1 billion on health, $1 billion on schools and $400 million on irrigation from the proceeds of asset sales. Budget figures show that they don’t have that money and they will fall short by hundreds of millions of dollars.
Fonterra’s dramatic cut to its forecast farmgate payout over this season and next will lead to a $13 billion black hole over two years, and shows the need for a plan to diversify the economy, says Labour’s Finance spokesperson Grant Robertson.
“The milk price payout was $8.40 last season. It is dropping to $4.40 this season and will only recover to $5.25 next season.
Eight months after pledging “no new taxes” at the election Bill English today admitted he would bring in more sneaky taxes along the lines of the border tax, says Labour’s Finance spokesperson Grant Robertson.
“Not only did National bring in three new taxes in the Budget, Bill English today in Parliament admitted there are more ‘user charges’ on the way, saying they would ‘continue to use them’. A user charge is a tax, pure and simple.
National’s cutting of the KiwiSaver kickstart is incredibly short-term thinking, typical of a Budget that is woefully short on ideas to generate wealth and opportunity, Labour’s Finance spokesperson Grant Robertson says.
“New Zealand’s savings rate is far too low. KiwiSaver has seen a big improvement in that rate. Cutting it off at the knees makes no sense.
National’s token measures to fight fires they have left burning for seven long years can’t hide a Budget that is long on broken promises, short on vision and fails to reach surplus, says Labour’s Finance spokesperson Grant Robertson.
“After being bystanders to the housing crisis and growing inequality, they have been forced to backflip and admit they are problems facing many New Zealanders. The solutions are woefully short of what is needed.