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Home / Politics

Public at odds with parties over deficit

John Roughan
By John Roughan
Opinion Writer·NZ Herald·
10 Oct, 2008 03:00 PM3 mins to read

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KEY POINTS:

Voters surveyed by the Weekend Herald think the next government should cut spending and balance the Budget before it cuts taxes, a striking contrast to the approaches of both major parties at the coming election.

The Weekend Herald's panel of demographically selected voters nationwide were asked to consider
possible solutions to the Budget deficit revealed in the Treasury's pre-election economic and fiscal update this week.

Deficits are forecast to last 10 years on current spending and Labour's scheduled tax reductions. The focus group exercise was held after National released its tax cutting programme on Wednesday.

The panel were given four options:

* Restrict public spending to balance the Budget as soon as possible.

* Cut taxes as planned and accept the deficits.

* Cancel further tax cuts until the economy produces surpluses.

* Make deeper tax cuts in hope they will stimulate the economy.

Of the 81 panellists who stated a preference, 43 wanted spending restricted. They include just seven who want tax cuts at the same time and five who wanted tax cuts cancelled until spending was down.

Little more than a quarter of the survey (23) wanted planned tax cuts to proceed and could live with the deficits, which was the response of both major parties this week.

A further 18 thought tax cuts should be cancelled for the time being but spending should be maintained.

And only nine wanted even deeper tax cuts in the belief they could stimulate the economy and fix the deficit.

When it came to choosing between the tax reduction programmes of Labour and National, a majority preferred National's.

Among the majority who would give priority to reducing public spending, many cited "overspending on bureaucrats", executive salaries and loose cost controls in the public sector.

One suggested the Government was paying the same people twice by providing Working for Families grants and free childcare. "One needs to go."

Another nominated cuts to public spending on events such as the America's Cup and Rugby World Cup.

Many complained at the amounts spent on social welfare and others thought the public sector had grown to be too large.

Of those who would take tax cuts and live with deficits, most said the cuts would stimulate the economy.

"Overseas debt levels are so low," said one, "deficits for the next few years are less alarming than no tax cuts and slashing spending. Confidence needs to be restored now."

QUESTIONS
* Should the next Government: (i) Restrict spending to balance budget? (ii) Cut taxes as scheduled, accept deficits? (iii) Cancel further tax cuts? (iv) Cut taxes more to stimulate economy?
* Both Labour and National have now announced tax-cutting plans. Which party's do you prefer?

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