We think it sensible that Governments borrow to fund essential infrastructure. This allows the burdon to be spread across generations. But it was Labour who said that this was crazy, as little as two months ago. We therefore welcome this flip flop. From the Dominion Post
Labour is promising to borrow even more if it is needed to stimulate the economy and stop it "slipping into a depression".
Finance spokesman Michael Cullen said: "The Government is not going to allow the economy to slip into a depression because it has some fear of lifting its short-term borrowing position. That is not sensible fiscal economic management."
The Government is already facing a debt blowout after the Treasury forecast a decade of deficits.
But Dr Cullen said he would borrow more if necessary to fund road, infrastructure, forestry, housing and rail projects, including expanding the electrified network to Auckland's North Shore and a rail tunnel under Waitemata Harbour.
His plan marks a U-turn from Labour's scathing attacks on National's plan to borrow more to spend on infrastructure.
In August, Prime Minister Helen Clark said: "I just think it's mind-bogglingly stupid. You go out and borrow at a time when the international markets are in crisis."
