New Zealand's Prime Minister John Key Smiles After the General Election in Auckland.
New Zealand's Prime Minister John Key smiles after the general election in Auckland November 26, 2011. Reuters/Stringer

It is time New Zealand dumped its herky-jerky approach to economic reforms and learnt from Australia on boosting economic development through consistent economic reforms, advised Prime Minister John Key.

Key reiterated the election message of the National Party for a strong and stable government in an article contributed to the Australian Financial Review. He said stability was the most important factor in economic growth, reported Stuff.co. Nz

Key warned against changing course with unproven policies that would stagnate New Zealand's economy and invite higher taxes and wasteful government expenditure. The PM observed that the economic success of Australia in the past 30 years had been the result of its consistent policy improvement. However, New Zealand is faced with the scenario of change and years of inactivity or complacency.

Key sees consistency in economic policies as the virtue behind the higher incomes enjoyed by Australians compared to New Zealanders. So, the goal will be to bring about a similar change in New Zealand by heading a government that will deliver more jobs and higher incomes.

Tax Reduction

Key promised, if re-elected, his government would pursue expenditure control with emphasis on revenue surplus and debt reduction. The ACC levies on households and businesses will also be reduced. Similarly income tax for the lower and middle income earners will be lowered by 2017, provided the fiscal conditions are rosy.

Reserve Bank Policy

Despite the enthusiasm of the Prime Minister, the decision of the New Zealand Reserve Bank to hold interest rates has given John Key a breather, reported The Wall Street Journal.

The apex Bank on Thursday kept the rates at 3.5 per cent, giving the hint that it would not be raising the rates this year, despite a drop in export prices and a strong local currency, calling for a hard economic outlook.

New Zealand's economy boomed recently, with the central bank raising interest rates four times in 2014. The kiwi economy has been surging on the back of better performance in exports of agricultural commodities. In fact, New Zealand was one of the few countries to have raised interest rates since the global financial crisis.