Budget called a landmark

Press, 29 July 1989, Page 3

Budget called a landmark

By

BRENDON BURNS

The Budget, delivered on Thursday, was a landmark for New Zealand, the Prime Minister, Mr Lange said yesterday. He told Dunedin businessmen that the Budget cemented in the economic reforms of the last five years. Mr Lange did not disguise his delight that his Government had introduced a Budget which devoted itself to social policy rather than further radical reforms. “A sustainable economic recovery is gathering pace,” he said. “And it is with considerable pleasure for many of us in the Labour • Government that attention has turned to social policy.” The economic consistency of Mr Douglas’s Budgets had been continued by that from Mr Caygill. The decision to repay domestic debt — rather than overseas loans — would mean a “significant” reduction in the pressure on financial markets. “The market is already saying that will help lower interest rates,” said Mr Lange. "That is good for growth and employment in this respect.” He expressed confidence that interest rates would continue to move down gradually. Mr Lange said he was particularly pleased that the Budget demonstrated the Government’s conviction that education was

the key to New Zealand’s future. Education is his portfolio. The biggest increase went to the pre-school sector, where he said each dollar is an excellent investment. A 23 per cent increase in housing assistance funding would allow 23,000 more housing units, he said. After careful study of the superannuation issue, it was concluded that many existing features should be maintained. Mr Lange said targeting the tax which funds the guaranteed retirement income allowed people to see how much the scheme was costing, with the certainty of knowing it remained affordable. “Taxpayers will support the scheme because they can see the benefits,” said Mr Lange. While details of the changes to the A.C.C. were to be worked out, the Government wanted to avoid increasing the burden on taxpayers and exployers. “To do so would be to undermine our determination to generate new jobs in this country,” he said. The fact that A.C.C. employer levies would be cut was a signal of the Government’s commitment in this area. Mr Lange said New Zealand had experienced a series of radical reforms in the last five years. The Budget signalled the abilitifeto now rebuild social semces.