Asian Crisis no excuse for spend-up

  • Bill English
Associate Treasurer

Labour and the Alliance should not be using the Asian Crisis as an excuse to spend more and more taxpayers' money and increase debt, Acting Treasurer Bill English said today.

"Economic commentators are saying moving into deficit at this time - when the economy has been hit hard by Asia - is not a reason for panic.

"But sound Government finances are crucial to the long term health of the economy. Running Budget surpluses has to remain a longer-term target as long as New Zealand has continuing high public debt.

"The Asian Crisis does not mean we should suddenly give up good quality management of taxpayers' money, or not look to put policies on a sound long-term basis. Helen Clark and Jim Anderton might want to forget, but New Zealanders remember the cost of deficits and debt.

"That debt had been cut to 24.4% this June, down from 52% in June 1992, and net foreign currency debt has been eliminated.

"Labour and the Alliance continue to promise more spending. Today Labour promised to reintroduce income-related rents for Housing New Zealand tenants and that policy alone is estimated to cost $280 million.

"In 1990/91, every New Zealand man, woman and child was paying $1,363 in interest on Government debt. This was more than the Government spent on health at $1,175 per head, and education at $1,298. Under National, for the current financial year per capita debt servicing is budgeted to be $684, less than half what it was a decade ago. Education spending per person will be $1,567 a head, and per capita health spending was $1,695.

"This Government has been eliminating spending on dead money - on interest payments - and spending it where we can achieve a real return for New Zealanders.

"The Asian economic crisis is forecast to slip the Government into deficit in 1999/2000 and 2000/2001. That impact is understandable and is not a reason for panic. At the same time, however, we should not be complacent about moving into deficit or increasing debt.

"This Government will continue to focus on competent economic management, which protects jobs as far as possible through this downturn.

"Opposition parties should remember that someone has to earn the money they keep wanting to spend," said Mr English.