Posted By

Tags

Politicians pledge more spending with no debt repayment plan

Jane Patterson

Jane Patterson

Political Editor, RNZ
Wellington, September 12, 2020

        

Labour’s Finance Minister Grant Robertson, Green Party Co-Leader James Shaw, New Zealand First Party Leader Winston Peters, National Party Leader Judith Collins and ACT Party Leader David Seymour (RNZ Photo)

 

Politicians are travelling the length and breadth of the country making big spending promises, but when will the public know if it all stacks up?

The Covid-19 response has already cost New Zealand billions of dollars, but political parties are still announcing policies with hefty price tags.

Labour is accusing National of gearing up to slash public services in pursuit of its debt target, with National hitting back at the vast amounts of money being borrowed and spent by its opponent.

Challenging environment

The campaign has roared into gear and politicians are adjusting to the new way of campaigning, with masks at hand and social distancing a new, and challenging, requirement.

But what is not new this election is the fierce debate over how each party would spend New Zealanders’ hard-earned taxpayer dollars, and how much more they are going to borrow.

In 2017, there was the $11.7 billion fiscal hole accusation from National, and the attempt by Labour to present itself as a credible manager of the economy.

In 2020 the shoe is on the other foot for Mr Robertson.

Trading accusations

“A major political party like National has a responsibility to say the cost of policies that they are announcing and I think this is the chaotic state of a Party that has had three leaders since Covid began, Is not sure of its policy footing, and is putting out things that just fuel uncertainty,” he said.

National Leader Judith Collins said that her Party will put out a fully-costed plan after the books are opened up for the Pre-Election Economic and Fiscal Update (PREFU) next week.

It is not just National that should be scrutinised for its spending, she said, with “irresponsible government spending loading a lot of extra debt and cost onto small businesses.”

“What I think is really important to understand is that we cannot simply borrow our way out of a recession, what we need to do is build our way out of it. A more worrying proposition if you add in the Greens, , a prospect that should scare the basically the bejesus out of people, frankly,” she said.

Green Caricature

Green Party Co-Leader James Shaw shot back: “National are doing down their brand when they say that they are good fiscal managers if they cannot even provide the electorate with proper numbers for this election campaign.”

The accusation that the Greens are poor economic managers was “always a caricature,” he said during his first media outing since having to apologise profusely for backing nearly $12 million of funding for the Green School.

NZ Party Plan

New Zealand First Leader Winston Peters said that his Party also intends to release its full spending plan and manifesto after the pre-election update.

“The first thing you got to know, is the latest updated information. I know others have got all their costings out there, now how they did that, I would not know. But we want to wait until the PREFU comes out, and we will know what we are dealing with,” he said.

Dark economic cloud

Debt is another major economic black cloud; net debt that pre-Covid-19 had 20% of the value of the economy will hit a peak of 53.6% of GDP in 2023, and is projected to go above 40% well into the 2030s.

National wants to pay it back more quickly than Labour – down to 30% within a decade.

Mr Robertson said that means slashing about $80 billion out of the budget.

“What that is about is not increasing health spending to keep up with inflation or population increase. It is not spending in the education sector, to make sure that we have got the resources for the number of children entering the sector. So, they actually have to be upfront about this is no free lunch here,” he said.

‘Fiscal Child abuse’

That was dismissed by Ms Collins as ‘PR spin’ from a “Finance Minister who does not understand that money needs to be borrowed, needs to be paid back.

“We are really focused on making sure that where we borrow, we are not just flittering around way, we are really, really focused on making sure that we when we borrow that we are building for the future, as well as today,” she said.

Debt is also on the mind of ACT leader David Seymour, who calls the current pathway “fiscal child abuse.”

“I think that we have been lulled into a false sense of security by interest rates that are low now, but may not be in years to come. It is people currently at intermediate school who will have the biggest cost from this and they do not even know the decisions being made for them,” he said.

Debt Destroyer Calculator

The Party’s Debt Destroyer calculator will help people see the true impact of various on the amount this country will have to borrow, Mr Seymour said.

The Treasury will release PREFU on September 16. 2020, giving an overall predication of the how the economy will perform, including the speed of recovery, the numbers of people heading for the unemployment queue and those debt tracks.

Before that though, voters will hear about Labour’s tax plan, to be announced later this morning.

Jane Robertson is Political Editor at Radio New Zealand. The above Report and Picture have been published under a Special Arrangement with www.rnz.co.nz

Share this story

Related Stories

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Indian Newslink

Previous slide
Next slide

Advertisement

Previous slide
Next slide

Advertisement

Previous slide
Next slide

Advertisement

Previous slide
Next slide

Advertisement

Previous slide
Next slide

Advertisement

Advertisement

Previous slide
Next slide

Advertisement

Previous slide
Next slide

Advertisement

Previous slide
Next slide

Advertisement