No new spending in May budget - Key

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No new spending in May budget - Key

3News NZ

Prime Minister John Key (NZPA file)

Prime Minister John Key (NZPA file)

By Duncan Garner

Prime Minister John Key says it is now likely the Government will not spend any new money in this year's budget.

The Government had planned to spend $800 million more in the May budget but Mr Key says because of the Christchurch earthquake - that now will not happen.

“Certainly I wouldn't expect a lot of new spending if there's any in the budget,” says Mr Key.

The Government plans to borrow up to $10 billion to pay for the damage caused by the Christchurch earthquake.

And that means its budget plans have changed.

It will take money from certain departments and spend that money in health and education - meaning no additional new money will be spent in this year's budget at all.

Last year the Government had a $1.1 billion cap for new spending in the budget.

But it cut that to $800 million for this year - now that has been cut too.

And Labour says people should be concerned.

“Clearly pulling $800 million out will affect low and middle income New Zealand,” says Labour leader Phil Goff.

Greens co-leader Russel Norman says the cuts will be significant.

“It’s going to come from somewhere but it can't be just little cuts here and there - its too much money - its going to be significant cuts,” he says.

Labour too needs to reprioritise and ditch some of its hefty promises.

But Mr Goff says Working for Families shouldn't be touched.

And he won't dump his $10 a week tax cut costing $1.3 billion - because he says it stacks up.

“I think so and I’ve said the reasons why I think it's affordable,” says Mr Goff.

The Greens are also pushing for a one off levy or tax to pay for the damage caused by the Christchurch earthquake.

Mr Key says he doesn't agree with it and he was supported by Mr Goff today.

Mr Goff says like Mr Key it is best to borrow more money from overseas to rebuild the garden city.

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Comments

22/03/2011 4:20:55 p.m.

Tammy wrote:

The Christchurch earthquake was good for the national party in that it provided a sinkhole excuse for their burgeoning national deficit (before the quake they were borrowing 25 mil a week); it provided their leader John Key with numerous sympathetic photo opportunities, which he took full advantage of; and it created a distraction from their ongoing policy decisions affecting privatisation and sales of public assets. However, the national party has reverted to type in that for a long time it was really only concerned about the CBD's viability, leaving the residents of the outlying suburbs to fend for themselves, until an angry hue and cry went out, and that should not be forgotten. The mainstream media, as always, is on the national party's side; if a left-leaning party had been so slow in getting help to the suburbs, they would have been pilloried in the news. As it was, the reportage was muted and no accountability on the government's part was demanded.
I shudder to think what the cuts will be, but rest assured, the poor and middle-income NZers WILL be much worse off, while the rich remain sipping bolly in their mansions.

22/03/2011 12:26:55 p.m.

Greg wrote:

Also, ACT says that 800 mil is not enough.
But I question the actual existence of the ACT party as an entity truly separate from the nats. I believe that there is no 'ACT party', only another arm of the nats whose brief it is to make outrageous demands on NZers, designed to make what the nats propose seem, by comparison, the 'lesser of two evils'. My response to that is, what about the third option, one which helps low and middle-income NZers to cope better, instead of making it harder for them.
A vote for ACT is really a vote for the nats.

21/03/2011 7:10:42 p.m.

Ruz wrote:

Budget cuts will be needed but on no account are the perks of current or former MPs' to be changed.