There are only three ways to get back to surplus. Tax more, spend less or expand the economy. Reducing marginal tax rates and paying for this with a rise in GST was politically brave, as is the asset sales plan Key has announced. But it is not enough.
The last government dramatically increased spending and this Government has done precious little to address this. National's only stated policy on reducing spending is to delay capital investment.
The rising cost of pensions, Working for Families, interest-free student loans, etc, are drags on the economy National is not going to address. That leaves us with raising growth and National's cupboard is bare. Their policies have many fine words but no substance.
This may be politically astute, as Key has recently discovered keeping your mouth shut is sometimes smarter than saying what you really think.
However, there is a concise, accessible and comprehensive blueprint for economic growth and the Government has already paid for two-thirds of it: the 2025 Taskforce. It was written by Don Brash, former Labour MP David Caygill, labour economist Judith Sloan and Roger Kerr's successor at the Business Roundtable, economist Dr Bryce Wilkinson.
The ideas range from the big (liquidating the Cullen Fund to repay debt) to the mundane (congestion charges for large cities). Many of the prescriptions are politically difficult, but there are no quick fixes to raising economic growth.
The Greeks and Italians waited too long and are having solutions imposed on them. We are heading in the same direction. Brash is stating what needs to be done. He deserves more support, both from the electorate and from the Act candidate for Epsom.
