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Labour says National using 'cynical, desperate' tactics

Labour says National using 'cynical, desperate' tactic with Budget blowout claim

By Pattrick Smellie

Sept. 4 (BusinessDesk) - Labour Party finance spokesman Grant Robertson has hit back at claims by National Party campaign chair and Finance Minister Steven Joyce of an $11.7 billion "hole" in Labour's budget plans, but has still been left exposed on Labour's ability to afford spending increases outside health and education.

Joyce claimed Labour had failed to include the cumulative impact of new spending in health and education in its recently published fiscal plan, but Robertson rubbished that claim, saying each year's new spending was included and just accounted for differently from the way the Treasury presents its regular fiscal updates.

National says it has an allowance for new spending in each of the next four years of up to $1.8 billion a year, based on the Treasury's pre-election economic and fiscal update. Labour agrees with that figure but has bundled some $8.5 billion new health and education spending over that period into its "above the line" Budget figures.

"This is the desperate act from a flailing finance minister," said Robertson at a press conference called after Joyce released analysis undertaken in his office without assistance from the Treasury or independent analysts. "What he's tried to do here is disingenuous in my view. He knows that we have accounted for our expenditure in health and education going out into future years."

"That $6.7 billion for health and $1.8 billion for education, that's in there," said Robertson. "Our fiscal plan adds up. We're absolutely clear that we have the money to meet the commitments that we've made."

However, he appeared to concede that by committing so much expenditure in those two areas, Labour would struggle to fund what Joyce claims are routine claims from the rest of the public sector for extra funding of at least $1 billion extra every year.

Joyce said at his press conference where the original claims were made: "There are generally about a billion dollars or so outside of education and health that just has to be done in the course of doing government. There's no way they have spare revenue hiding around to put against that stuff unless they're talking about doing those taxes that they don't want to talk about."

Robertson said, in response to questions about such inflation and demographic costs in other areas: "There is still some money available within what we've called our operating allowance. We'll also be looking to govt departments to reassess their spending. We will have some different priorities.

"Obviously, we do intend to grow the economy as well to make sure that we have additional resources available. Like any government, we'll make those choices when we get into government," said Robertson. Labour's fiscal plan expects to have some $7.5 billion in accumulated unspent funds available for other purposes over the four year period, starting at $913 million in the current financial year.

Joyce's claims come ahead of tonight's second debate between the National and Labour leaders Bill English and Jacinda Ardern and the start of early voting next Monday, Sept. 11.

"National has serious questions to answer about their own fiscals," said Robertson. "They haven't allowed $8.5 billion for cost pressures in health and education. They haven't funded their GP (doctors' visits) policy properly. They haven't said where the money for their $11 billion of capital spending will come from."

In part, Labour was funding its plans by canning tax cuts worth $400 million for the top 10 percent of income earners.

(BusinessDesk)

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