Deficit strategy ‘short on detail’

Press, 28 July 1989, Page 4

Deficit strategy ‘short on detail’

PA Wellington Failure to eliminate the deficit, rein in Government spending, and fundamentally reform accident compensation, are big shortcomings of Mr Caygill’s Budget, says a Business Roundtable spokesman, Mr Bob Matthew. He said the Budget was short on specifics in. areas ranging from over-all strategy to plans for the new superannuation scheme. Mr Matthew, who is chief executive of Brierley Investments’ New Zealand operations, welcomed however the Budget’s confirmation of the Government’s intentions to stick to its financial and general economic policies. He praised the Government for resisting the temptation to stoke the economy coming into election year, and said the promise of more of the same “will be a positive contribution to economic recovery.”

Lower domestic cost structures were benefiting the export sector and laying the foundations for a durable recovery. “However, the Business Roundtable would have preferred to see an elimination of the financial deficit this year,” he said. “It is also disturbed that the over-all surplus will not be used to retire overseas debt. “The forward projections for the financial deficit are not encouraging and do not do enough to support the policy framework of the Reserve Bank Bill in contributing to lower inflation and interest rates.” It was unfortunate that deficit reduction had to rely on tax increases announced in March. “The Budget tables show the strong upwards trend in Government spending has still not been reversed,” Mr Matthew said.