Spend the Surplus

Despite the much of our media having spent the last few years playing the part of the tax cuts lobby the New Zealand public has different ideas:

More support public spending than tax cuts

Research New Zealand is surprised at the results of its latest poll, which asked whether the Government should spend its cash surplus on tax cuts or public services.

Director Emanuel Kalafatelis says 48 percent of respondents said they want the Government to spend the surplus on public works, while 37 percent want it spent on tax cuts. He says people living in major urban areas are more likely to support increasing spending on public works than those in smaller towns.

Mr Kalafatelis says twice as many people with tertiary qualifications supported the surplus being used for more public services than those with no qualifications.

The poll was taken following the Government's announcement it has a multi-billion dollar cash surplus in early October.

Me, if the choice is the one presented above, I'm with the majority of New Zealanders: what we need now is more spending on things like health not lower taxes. Of course, if we are to follow sound macro-economic policy, then we should keep the surplus until inflationary pressures ease and fund additional spending from increased taxes (this is my preferred position). But if we have to break from best practice, I'd prefer we invested in health and education, not tax cuts .