Election year begins with promises and prospects
The two major political parties have given a kick-start to the Election Year, with a number of promises to woo voters but just how New Zealanders consider them would be known only on the date of Election.
Prime Minister John Key and his Opposition Leader Phil Goff have both given their respective State of the Nation addresses, without of course losing the opportunity to have a swipe at each other. But both agreed on one major issue – that the economy should be lifted from its current state of nervousness and delivered to the path of growth.
While Mr Key believes that his National-led Government has the right recipe for progress and that 2011 will be a better year than 2010.
He quoted the Treasury’s prediction of ‘more than 3% growth, accompanied by higher wages and falling unemployment’ in his State of the Nation Address delivered at the Trusts Stadium in Henderson (Auckland) on January 26.
“The challenge is to build a lasting recovery based on savings, exports and productive investment. New Zealand has been through a recession and a global financial crisis. We have a chance, now that the economy is gathering steam again, to build a solid platform for future growth,” he said.
According to Mr Key, unfavourable balance of payments, an overvalued exchange rate, the possibility of downgraded credit rating and deficit financing are among the greatest challenges for the current Government.
He said Government borrowing, at $300 million a week, was ‘essential’ during recession but was upbeat about the Treasury forecast of returning to surplus by 2015-2016 financial year.
Mr Goff was equally optimistic in his State of the Nation Address delivered on January 25 at the New Lynn Community Centre in Auckland, proposing tax relief for all taxpayers but a higher rate of taxation for the rich.
But the real battle between the two parties, leaving voters in a state of confusion would be Mr Key’s proposal to divest interests from a number of State-owned enterprises. Although not yet final, it appears that the National would sell up to 49% of the investments that the Government holds in the power, transportation and banking sectors.
“That is the right thing to do. I am sure many New Zealanders will be interested in buying quality assets,” Mr Key said, also hinting that public spending will be slashed in this year’s budget.
However, Mr Goff sees the proposal as a ‘recipe for disaster.”
“New Zealanders will face higher power prices and cuts to essential services like schools and hospitals under Mr Key’s plan to privatise assets and slash spending.
The Government does not have an economic plan; it is simply rehashing the failed policies of the past,” he said.
Private sector bosses understandably backed Mr Key’s proposal, which was in essence ‘mixed ownership.’
Business NZ Chief Executive Phil O’Reilly described the policy of mixed ownership as progressive and moderate.
“Broadening the pool of investment opportunities for New Zealand families is a key step towards a more vibrant economy. Greater involvement by more stakeholders also fosters accountability and better performance,” he said.
Indian Newslink will analyse the pros and cons of the Government’s move in its ensuing editions. Meanwhile, please read our Editorial, Containing the Politics of Privatisation on Page 12.