JUST $16 A WEEK – THE BLOCK OF CHEESE BUDGET

Kiwis have waited nine long years for Michael Cullen to admit he’s wrong and deliver tax cuts. And after those nine long years he says he will give the average wage earner just $16 a week – the equivalent of a family-size block of cheese – a few weeks out from the election.

Then, once the election is over, the average wage earner will have to wait a couple of years to get just $6 more. It will be a very long time between toasted sandwiches.

No finance minister in New Zealand history has had the opportunity to cut taxes like Michael Cullen. Yet after more than 3,000 days in office, he says he will finally deliver – just days from an election. New Zealanders will see this as the desperate and cynical move it is.

Labour has squandered the golden economic weather of the past nine years, and failed to future-proof the economy. Their Budget is all about survival, not a sense of real priorities about New Zealand’s future direction.

Tax cuts are a top priority for National. They are an essential part of our five-point plan for the economy to make New Zealand a wealthier, more successful country. This plan includes:

- An ongoing programme of personal tax cuts. We will put the right incentives in place to encourage people to work and save and get ahead under their own steam. Boosting after-tax wages will help stem the flow of Kiwis overseas. It will help New Zealand keep the skilled workers we need to grow our economy and improve our public services.

- Bringing discipline to government spending. The government should be just as careful with your tax dollars as your household is with the weekly budget. National will direct spending away from low-quality programmes that push up inflation, towards frontline services like doctors, nurses, teachers, and police.

- Tackling bureaucracy and red tape. We will cap the number of bureaucrats in the core public service, and we will reform the Resource Management Act and the Building Act. We want to cut the high compliance costs that bog down everything from growing a business to building a deck.

- An unwavering focus on lifting education standards. We will introduce National Education Standards in primary and intermediate schools to improve literacy and numeracy. We will boost trades in schools and encourage teenagers to get the skills they need to make the most of themselves.

- Boosting infrastructure to help this country grow. We have a $1.5 billion plan to bring ultra-fast broadband to businesses, schools, hospitals, and homes. And we will work with the private sector to substantially boost investment in roads, electricity, and water.

Our plan for the economy is focused on getting New Zealand onto a much stronger path of economic growth and opportunity, and building a wealthier future for all New Zealanders.

GETTING EMISSIONS TRADING RIGHT

In a speech http://johnkey.co.nz/index.php?/archives/383-SPEECH-Lower-North-Island-Regional-Conference.html I gave to the National Party’s Lower North Island Regional Conference on Sunday, I called for a delay in the emissions trading legislation currently going through Parliament.

As a responsible international citizen, New Zealand must do its best to reduce greenhouse gas emissions. A well-designed, carefully-balanced Emissions Trading Scheme (ETS) is the best tool available for efficiently reducing emissions across the economy. But Labour has been racing towards a political deadline - the 2008 election – to set up the ETS and it has been prepared to cut corners to get there.

We are not prepared to cut those corners – not when the financial security of Kiwis is at risk, and not when getting the ETS wrong means exporting jobs, ratcheting up inflation, and viciously squeezing household budgets.

National believes that the current rushed timetable for the design of the ETS and the select committee process is reckless, given the importance of the issue. That’s why we will not support the bill going to a second reading until we are satisfied that it meets six key principles:

1. The ETS must strike a balance between New Zealand's environmental and economic interests. It should not attempt to make New Zealand a world leader on climate change. Kiwis simply can't afford to pay the price for that particular experiment.

2. It should be fiscally neutral rather than providing billions of dollars in windfall gains to the government accounts at the expense of businesses and consumers. National does not think it's responsible for government to use green initiatives to pad the Crown’s coffers while thinning out Kiwis' wallets.

3. It should be as closely aligned as possible with the planned Australian ETS, with common compliance regimes and tradability. In my second speech as National Party Leader, I called for close co-operation with our biggest trading partner on this issue, and I continue to call for it. Given the Australian timetable for developing an ETS, I believe it's still possible.

4. The ETS should encourage the use of technologies that improve efficiency and reduce emissions intensity, rather than encourage an exodus of industries and their skilled staff to other countries.

5. It needs to recognise the importance of small and medium enterprise to New Zealand and not discriminate against them in allocating emissions permits.

6. It should have the flexibility to respond to progress in international negotiations rather than setting a rigid schedule. This way, industry obligations can be kept in line with those of foreign competitors.

National does not expect to be the sole judge of whether the revised bill meets these principles. We believe that the views of New Zealanders must be heard and responded to.

For that reason, significant amendments to the bill should be tabled in Parliament, referred to the select committee alongside the bill, and subject to public submissions. 

This will most likely mean carrying the legislation into the next Parliament. I believe that's a small price to pay for ensuring New Zealand gets the best ETS possible.

John Key MP
Leader of the National Party