NATIONAL’S TAX CUTS

JUST CRAZY

What did the PREFU tell us was available to spend over the next 3 years (OBERAC):

05/06 06/07 07/08 08/09 TOTAL

7,293 6,344 4,217 5,512 23,366

All figures $ Million

Where is that committed?

Over the next 4 years that is committed to:

New Zealand Superannuation Fund : $13.13 Billion

New Zealand Superannuation Fund : $13.13 Billion

Loans (Student Loans, etc): $3.28 Billion

Over the next 4 years that is committed to:

New Zealand Superannuation Fund : $13.13 Billion

Loans (Student Loans, etc): $3.28 Billion

Investment in hospitals, Crown entities, SOEs etc : $4.027 Billion

Over the next 4 years that is committed to:

New Zealand Superannuation Fund : $13.13 Billion

Loans (Student Loans, etc): $3.28 Billion

Investment in hospitals, Crown entities, SOEs etc : $4.027 Billion

Investment in assets (schools, roads, etc) : $7.09 Billion

Over the next 4 years that is committed to:

OBERAC

Investments already

committed

Balance

05/06 06/07 07/08 08/09 TOTAL

All figures $ Million

What is left?

548 -747-

2,615-

1,346-4,160

7,293 6,344 4,217 5,512 23,366

-6,745-

7,091-

6,832-

6,858-

27,526

Conclusion:

There is no uncommitted surplus.

Cost of National’stax cuts

Labour’s Family Tax Relief and

ECE

Total extra cost of National’s tax

cuts

05/06 06/07 07/08 08/09 TOTAL

Extra cost of National’s tax cuts over Labour’s spend

All figures $ Million

550 1,900 2,800 3,400 8,650

95 380 479 494 1,447

455 1,520 2,321 2,906 7,203

Where will the $7.2 billionhave to come from?

Two places:• Additional borrowing

• Cuts to expenditure

National’s borrowing

Increased borrowing

signalled by National

05/06 06/07 07/08 08/09 TOTAL

All figures $ Million

01,00

01,20

01,30

03,50

0

Still to find: $3.7 Billion

Spending cuts

Spending cuts already identified

Still to find through cuts

Total cuts needed

05/06

06/07 07/08 08/09 TOTAL

All figures $ Million

0 100 348 503 951

455 420 773 1,104 2,752

455 5201,12

11,60

63,70

3

SUMMARY

Extra costs of national’s tax cuts: $7.2 Billion

Requires:

Extra borrowing $3.5 Billion

Cuts to health, education or somewhere else $3.7

Billion

NATIONAL’S TAX CUTS

JUST CRAZY