English promises jam in the future

Finance Minister Bill English is promising ''jam tomorrow'' for wage earners, as long as the Government is re-elected on September 20.

In a hark back to the days when Sir William Birch was finance minister and Mr English was his humble assistant, Mr English is looking to the future.

The average annual wage is expected to increase by $7500 to about $62,000 a year by 2018 ''if New Zealand achieves its economic growth forecasts over the next four years''.

Back in the days of Sir William, New Zealanders were promised tax cuts, as long as National was re-elected and other caveats.

Tax cuts eventually came, but were reversed by the next Labour administration.

It seems obvious, according to Mr English's pre-Budget 2014 speech yesterday, wages will rise because the Budget next month will be about thoughtful targeted spending, not a spend-up.

Mr English was in campaign mode in his speech, not beating around the bush.

In effect, the campaign has started already, with Labour releasing policies as leader David Cunliffe goes on a whirlwind tour of the country.

Mr English also took a swipe at local body planners and councillors for contributing to the country's housing unaffordability in the least-affordable cities.

He also promised to keep spending down to a $1 billion of new spending in the Budget as the Crown accounts return to a paper-thin surplus in 2014-15.

''Imagine the effect on interest rates - and the rest of the economy - of a return to the $3 billion-plus annual spending allowances we saw under the previous Labour government from 2005-08,'' he said.

Every 1% movement in mortgage interest rates was worth about $40 a week - or $2000 a year - for a family with a $200,000 mortgage.

''So when you hear politicians promising to ramp up spending to pay for expensive election promises, you should remember this would come at a significant cost to households and businesses.''

Mr English is playing a cool game on spending promises.

As a list MP from September 20, chances are Mr English will depart for overseas sometime in the next electoral term, no matter who wins.

But after 24 years as an MP, he will not want to let a third term slip away from Prime Minister John Key.

However, many New Zealanders rely on the Government for help with their accommodation needs through various forms of assistance.

As the economy recovers, voters may feel they deserve some extra spending.

While the country has got out of the way of huge election bribes in the past six years, Labour only needs to find one trigger for the game to change.

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