Cycleway: Job Shuffling Not Job Creation

Prime Minister John Key's argument that his pet project of building a cycle way will create jobs is economic nonsense, ACT New Zealand Finance Spokesman Sir Roger Douglas said today.

"The supposed 'creation of jobs' argument is a fallacy as in reality the cycleway will not create any additional jobs at all," Sir Roger said.

"The Government must either use taxes or debt to finance the $50 million cost of the cycleway. A tax of $50 million reduces both consumer spending and private savings by $50 million - thereby destroying as many jobs as the Government spending will create.

"Alternatively if the cycleway is financed by $50 million dollars of debt, the borrowing will help lead to higher interest cost and a decline in private investment - again destroying jobs.

"The result is merely job shuffling not job creation.

"Does this mean his project should not go ahead? Not necessarily – but the project should stand or fall on its overall benefit to tourism, not whether it creates more jobs," Sir Roger said.

ENDS