Dollar for dollar commitment stands

  • Bill English
Treasurer

Treasurer Bill English today reconfirmed National's commitment to the dollar for dollar pledge to match tax reductions with increased social spending.

"Claims by some media today that National had abandoned its dollar for dollar commitment are quite wrong.

"Increases in social spending will come from two sources. Baseline increases built into the PREFU forecasts and unallocated funds set aside for future policy initiatives.

"PREFU baselines include allowances for things like health care for a growing and ageing population, and forecast changes in numbers of students and beneficiaries. They also include money available for new initiatives, for instance in health we have recently announced an extra $175 million in 2000/01 for new and enhanced health services.

"These baseline increases in social spending add up to $1.5 billion by the third year, and on their own meet the dollar for dollar commitment.

"However, on top of the baseline increases, we have also taken the prudent approach of setting aside some unallocated funds as a provision for future policy initiatives. Not all of these funds will go on social spending, but a significant amount is likely to based on what's happened in previous years. These provisions reach almost $1.5 billion by the third year.

"Money from these provisions will be incorporated into social spending baselines as Budget decisions are made over the next three years. There is absolutely no question that we will deliver on the dollar for dollar commitment," said Mr English.