Govt seeks ways to pay for Christchurch earthquake

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Last updated 15:19 01/03/2011

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Finance Minister Bill English is refusing to rule out cuts to Working for Families payments or interest free student loans as the Government looks for ways to pay for the reconstruction of Christchurch.

Mr English said he was not ruling any thing in or out, though he said in terms of income support the Government would continue to "protect the vulnerable'' - a likely signal that any cuts to Working for Families would only be made at the top end of income earners.

He said he did not want to loosen the Government's short and long term targets for debt reduction, but that was also not ruled out.

A slower return to surplus than the current forecast 2014 was also possible, but the Treasury was still working on the details.

He said the Government wanted to stick to its framework of reducing debt and returning to surplus "but we will have to be a bit flexible".

"We want to deal with this issue within the fraemwork without being rigid about it."

It was also possible to delay big ticket infrastructure spending, such as the roll out of ultrafast broadband or the Auckland CBD loop road, to give Christchurch infrastructure a higher priority.

Labour leader Phil Goff said cuts in areas such as KiwiSaver, Working for Families and student loans were the wrong way to go.

"It would be wrong to cut financial assistance to families and students who rely on that support, especially when the cost of living is sky high. That would simply slow the economy down. We must keep money in the pockets of people who will spend it,'' Mr Goff said.

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