With the National/ACT government about to release its first budget, Libertarianz Deputy Finance Spokesman and Auckland economist J Darby warned that deficit spending, funded by borrowing, will have implications for the youngest in society. “An unbalanced budget has to be funded, and if this is funded by additional borrowing, then future generations will bear the burden of paying off the debt. This is ‘fiscal child abuse’,” said Darby. “A responsible political party and government would, at the very least, balance the budget,” he added.
Instead, in its first budget, the National/ACT government appears to be about to fund a series of deficits by borrowing, thereby mortgaging the lives of future generations. “While this demonstrates that they are irresponsible, what is outrageous is that they are about to renege on their promise of tax cuts, a promise which formed a central part of their election campaign,” noted Darby. “To blame the recession for breaking this promise is no excuse, for the effects of the recession were well known to everyone when this promise was made. They are either incompetent, or they willfully lied in order to get onto the Treasury benches,” continued Darby.
Libertarianz support tax reductions in all their forms. In fact, tax cuts are more important than ever so that money is returned to the productive members of society; for it is they who create wealth and jobs. It follows, therefore, that breaking the promise of tax cuts would hinder any recovery of New Zealand’s economy.
Darby pointed out that tax cuts must be accompanied by equivalent reductions in government spending. “It is essential that government spending is slashed. Many government departments and programmes can easily be eliminated saving significant sums of money and allowing the promised tax cuts to proceed. And yet,” highlights Darby, “this government has shown no interest in meaningful spending cuts. On the contrary, they are about to embark on a multi-billion dollar programme of spending on infrastructure and home insulation.”
Finally, Darby issued a warning. “This government is about to engage in fiscal child abuse by mortgaging the lives of future generations. They do this while breaking their central election promise of tax cuts and while creating significant spending programmes which will also hinder New Zealand’s economic recovery. Muldoon is alive and well in Wellington.”
For more information, please contact:
Libertarianz Deputy Finance Spokesman
Phone: 021 305 199
Libertarianz: More Freedom, Less Government