31 Oct 2011

Labour confident of 2014 return to surplus

6:29 pm on 31 October 2011

The Labour Party says it can return the country's books to surplus by the 2014/2015 financial year, the same year as National expects to.

National Party finance spokesperson Bill English and Labour's David Cunliffe debated economic matters on Radio New Zealand's Nine to Noon programme.

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Mr Cunliffe told the programme the long-term fiscal picture would be far better under a Labour Government.

"I can confirm today that we will be returning our books to surplus in the same year that National is projecting and I agree with Bill English, it's not an easy job."

"We're going to be putting in place ... structural policies, capital gains tax, the compulsory KiwiSaver, changing the superannuation qualifying age."

Bill English reiterated his party's estimate that Labour has a $16 billion hole in its spending plan.

"Labour's stuff's all on the never never - a lot of spending now, GST off vegetables, tax-free thresholds and claw it back 15 years later."

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Mr English said National laid out its plan to return the books to surplus by 2014 in the May Budget and the mixed ownership model is part of that plan.

He said the $5 - $7 billion to be raised from partial state asset sales can be applied to other investments that a government needs to make, without having to borrow money on international markets.

Mr Cunliffe said the difference is that Labour is covering the costs of keeping the country's assets, which means an initial debit of about $5 - $7 billion but that would be covered in the long term by revenue from a capital gains tax.

Labour's savings policy includes making KiwiSaver compulsory but Bill English says people who have opted out have done so for good reason.

"Incomes aren't high enough. We need to grow incomes which means getting capital and people into a strong export sector with healthy businesses that can afford to invest."

Mr Cunliffe says workers would be better off with compulsory KiwiSaver as they would also be getting the first $5000 of income tax free, GST would be removed from fruit and vegetables and the minimum wage would be increased.