Labour’s Real Fiscal Plan Revealed: Endless Debt Spiral

Published: Tue 10 Oct 2023 06:30 AM
Labour’s real fiscal plan shows:The real costs of Labour’s GST and dental policies (an extra $736 million over four years)Labour's track record of blowing its budget operating allowances ($600 million per year each Budget)Permanent deficits, with the books never getting back to balanceDebt blowing out by $7 billion by 2027/28 and an endless debt spiral.
New Zealand faces the prospect of never-ending deficits and Government debt rising forever if Labour is re-elected, National’s Finance spokesperson Nicola Willis says.
“Today the National Party has released a corrected version of Labour’s fiscal plan which fixes errors in the original, including a blowout in the cost of Chris Hipkins’ absurd policy of removing GST from fruit and vegetables, a woefully undercosted dental policy, and the failure to account for Labour’s proven track record of overspending its budget allowances.
“Treasury has warned that Grant Robertson has blown his spending allowances by an average of $600 million a year, because he is simply unable to maintain fiscal discipline.
“This paints a bleak picture for New Zealand’s books, with debt rising every year and the Crown accounts never getting back to surplus. By 2027/28 debt would be $7 billion higher than in Labour’s uncorrected fiscal plan. All of this is before Labour agrees to the spending plans of the Greens and Te Pāti Māori.
“On top of the changes in the Labour’s real fiscal plan, they have failed to set aside funding for over $50 billion of policy commitments including Auckland and Wellington Light Rail, Lake Onslow, and the cost to the government of Labour’s income insurance scheme.
“The only way Labour and its likely coalition partners will pay for all of their spending promises is obvious: taxes. Labour loves tax like a shark loves blood and the Greens and Te Pāti Māori have said new forms of taxes are bottoms lines for coalition negotiations.
“Labour has increased spending by 80 per cent and caused debt to blow out from $5 billion in 2019 to $104 billion in the PREFU forecast.
“Grant Robertson’s claims around National’s fiscal plan are just not credible. National’s tax policy and fiscal plans have been independently checked by external experts and found to be cautious and consistent. Labour is a government that is out of ideas and out of time and looking increasingly desperate five days out from the election.
“National's fiscal plan will restore discipline to government spending, lower taxes and reduce net debt.
“New Zealand can’t afford another three years of Labour. National will rebuild the economy to reduce the cost of living, lift incomes and deliver better public services for all New Zealanders.”

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