Tax cuts key to growth, says New Zealand's new government

Wellington - New Zealand's newly elected conservative government pledged Tuesday to cut income taxes in each of the next three years to spur workers into raising productivity and revive the lagging economy.

A single-minded concentration on economic growth was the main feature of the National Party's policy programme, outlined at the official opening of the new Parliament following last month's general election.

The programme was set out in a speech prepared by Prime Minister John Key but read, according to tradition, by Governor-General Anand Satyanand, the representative of Queen Elizabeth, who is New Zealand's head of state.

Renouncing the socialist policies of the ousted Labour-led government, which right-wing critics accused of running a "nanny state," Satyanand said: "In pursuing this goal of economic growth, my government will be guided by the principle of individual freedom and a belief in the capacity and right of individuals to shape and improve their own lives.

"So my government will not seek to involve itself in decisions that are best made by New Zealanders within their own homes and their own communities," he said.

"The new government's vision is not to dictate the way in which New Zealanders should live their lives, but instead to ensure they have the opportunities they need to make the best choices for themselves."

Noting that the economy had been in recession this year and economic growth in 2009 was forecast to be slow, the government predicted it would run an operating deficit for some years to come.

As well as tax cuts, the government promised an accelerated infrastructure programme including new roads, schools, public transport projects and an ultra-fast broadband network across New Zealand, all to counter rising unemployment and stimulate the economy.

It promised not to cut government spending and social welfare but said the number of bureaucrats would be frozen and a transitional relief package introduced to help workers who lose their jobs in the current economic crisis.

The National Party-led government, which controls 69 seats in the 122-member Parliament, also pledged to act on campaign promises of law and order, including more police and tougher bail and parole provisions for violent criminals.

"The driving goal of the new government will be to grow the New Zealand economy in order to deliver greater prosperity, security and opportunities to all New Zealanders," the governor-general said. (dpa)

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