National launches growth plan

Press, 18 February 1989, Page 8

National launches growth plan

By

OLIVER RIDDELL

in Wellington National has launched a “Path to Growth” strategy document to promote sustainable economic growth and productive employment. This follows a three-day Parliamentary caucus in Auckland and discussion of objectives and principles in the run-up to the 1990 election. National would commit itself before then to policies which would: • Encourage savings and investment as the foundation for economic growth and productive employment. . • Diminish the demands of the State on the country’s economic resources. • Enable individuals to do more to secure their

own wellbeing and that of their families. • Enhance New Zealand’s competitiveness in international trade. “The Labour Government has locked New Zealand into a cycle of despair,” said the Leader of the Opposition, Mr Bolger. “It is a cycle of economic decline and rising unemployment leading to increased taxes and further economic decline.

“National will move immediately to break the cycle,” he said. The party would promote sustainable economic growth and productive employment, so diminishing the demand for increased welfare spending and eliminating the need for tax increases.

Mr Bolger said the economic policies would be designed to revive con-

fidence in the economy’s fundamental strengths and so set people back on the path to growth; jobs and a decent standard of living.

National would work to achieve savings, investment, growth and employment objectives through policies based on the combination of low taxes, low inflation, low interest rates and the stimulus of competition. Two immediate steps would be taken to boost savings and capital formation — both now at dangerously low levels, he said.

First, National would introduce tax deductibility for long-term contractual savings made for the purpose of creating income in retirement

Second, National would remove the superannuation surtax which

penalised savers.

A new climate of confidence for investors would be created by requiring proper disclosure of information by companies, greater protection for the rights of minority shareholders, more accountability from directors, a more efficient stock exchange, and by making more resources available for the enforcement of these new disciplines on market behaviour. “We will move quickly to put the Government’s own house in order,” Mr Bolger said. Government t spending would be reigned in, with a budget balanced as quickly as possible. This would relieve the pressure the Government had been putting on the loan market through borrowing to finance the de-

ficit. The taxation burden must not be increased, he said. State activities would be transferred to the private sector wherever the citizen could get a better service at a better price. On exchange rates, Mr Bolger said a ■ National Government’s commitment to combine its own fiscal responsibility with more flexible labour-mar-ket conditions and appropriate monetary policies would ensure that the international value of the New Zealand dollar was maintained at stable and competitive levels. That would make a further contribution to the confidence of investors and business managers and, consequently, to economic growth and employment, he said. ,