No 'lolly scramble' in Budget, Key says

John Key
John Key
Prime Minister John Key is ruling out ''election bribes'' either in the Budget next month or in the election campaign, saying anything more than a modest increase in spending means higher interest rates.

In a pre-Budget speech in Auckland yesterday, Mr Key said while some increase in interest rates was an inevitable consequence of a healthy and growing economy, the Government needed to do everything it could to help keep rate rises to a minimum.

''And we believe we have the support of New Zealanders who can remember the dashed hopes of debt-fuelled growth and floating mortgage rates above 10%.

''So there is not going to be a lolly scramble in this year's Budget. And we also won't be doing that in the election campaign later this year.''

In this year's Budget, the Government would stick to its new spending allowance of $1 billion, he said.

Together with some savings, that allowed the Government to focus new spending mainly on health and education - which were always at the heart of National-led government Budgets - and on families and children.

Sticking to the allowance would enable a small Budget surplus to be posited in 2014-15, something long promised, Mr Key said.

''In future Budgets, we will be posting consistent and larger surpluses. Those surpluses will allow us to begin reducing debt as a proportion of GDP.

''We need to get on and reduce our debt instead of using taxpayers' money in a series of election bribes - which is the Opposition's approach.''

The Budget would show the Government remaining on track to reduce net government debt to below 20% of GDP by 2020, Mr Key said.

Reducing debt?

Mr Key states "We need to get on and reduce our debt instead of using taxpayers' money in a series of election bribes - which is the Opposition's approach.''

This ignores the fact the previous labour government had a strong focus on reducing our debt and had reduced it to record lows.

This from the party that has raised it from 18bil to 76 billion (was over 80 billion before asset sales, in fact the asset sales = approx 1.5 years interest payments or the lost income from tax since national lowered the top tax rated to date) since being elected in 2008 . This has gone from a record low of 17.4% of GDP in 2008 to 39.48% of GDP today. 

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