The National government’s “upside” forecast is an even more unbalanced two-speed economy, says Labour’s Finance spokesperson David Parker.
“The Government’s central projection in its budget shows just modest growth. But their so-called “Upside Scenario” is in reality even worse.
The budget document (see BEFU p. 53) states: ‘The upside scenario is based on higher prices for existing and new houses, along with an associated increase in complementary household spending].
“I kid you not! In other words, their upside – more tax for the Government – relies on even more rampant house price inflation, higher mortgages and debt fuelled consumption.
“This is yet more proof that National confuses what is good for themselves politically, with what is good for the economy and our country.
“They are happy to ignore the need to encourage the economy away from house speculation into productive jobs and exports.
“The tax and investment drivers of housing speculation remain untouched by National. They ignore IMF and OECD advice calling for a capital gains tax. Labour’s CGT (excluding the family home) will make a huge difference.
“It’s not that complicated. There is a shortage of affordable homes. The market is not building them, so the government should get stuck in and get the job done. Labour’s KiwiBuild policy will build 10,000 affordable homes a year. That will make a real difference.
“National’s so called “Upside Scenario” shows what they really want. They are content with an unbalanced two-speed economy, which is what you get when you allow an overvalued currency to damage your export sector,” says David Parker.
19 May 2013 MEDIA STATEMENT