Most important budget since 1984

The Herald reports:

Next week’s Budget is one of the most important in over a quarter of a century, says Treasury Secretary John Whitehead.

Mr Whitehead, who has been directly or indirectly associated with Budgets stretching back to the last years of the Muldoon Administration, said next Thursday’s was the most critical since Labour’s Budget to confront the economic and currency crisis in 1984.

Now Whitehead is no ideological Rogernome. In fact Whitehead is a former Deputy Director of the Labour Research Unit (when Muldoon was PM), so I think the left should listen to him when he stresses how important the budget is.

During a round of meetings with business groups, banks and media in Auckland yesterday, Mr Whitehead emphasised the importance of the Budget’s role in retaining the country’s credit rating to keep Government and business borrowing costs down.

The Standard & Poor’s rating agency already has New Zealand on a negative outlook and has said the Budget will be critical in re-rating the country.

It is worth remembering how precarious our position is. Not only will a credit downgrade cost the Government $600 million a year, it will increase credit costs to every business.

And everytime you see Labour complaining that National is saving money through a more efficient public service, remember that without these savings the Government would be facing a permament structural deficit of $10 billion a year.

Have you heard a single proposal from Labour (or the Greens) on how to cut (annual) expenditure to stop the descent into permament deficit and debt?

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