UPDATE: Robertson unmoved by CTU call to scrap 'budget responsibility rules'
by Pattrick Smellie
March 28 (BusinessDesk) - Finance Minister Grant Robertson has been quick to rule out scrapping the government's Budget Responsibility Rules after the Council of Trade Unions said today they were too restrictive to allow necessary investment in public services and infrastructure.
In a statement, CTU president Richard Wagstaff said: "Our political leadership must now reconsider the restrictive Budget Responsibility Rules plan and whether their revenue is sufficient to gut and repair the rot that’s built up in public services", as pressure mounts for substantial public sector pay claims and new evidence emerges of rundown public health and education facilities.
However, in a statement to BusinessDesk, Robertson held firm on the pre-election commitment to Budget Responsibility Rules that seek to reduce net Crown debt to 20 percent of gross domestic product by 2022, a two years slower path than the previous National Party-led government's forecast for reaching that point.
“The government is confident that it will meet the Budget Responsibility Rules while being able to begin the process of rebuilding our social and physical infrastructure,” said Robertson, who is putting final touches on his May 17 Budget, which may end up raiding some of the $1 billion a year Provincial Growth Fund in order to fund urgent regional social service requirements.
The rules, which have sparked criticism from the left of the Labour Party and elements of their support partner, the Greens, were adopted before the 2017 election as part of Labour's bid to establish credibility as a prudent economic manager and featured in its coalition agreement with New Zealand First.
"The responsible way to deal with any crisis is to reassess your game plan," said Wagstaff in a statement, leveraging Prime Minister Jacinda Ardern's comments this week that the capital needs in the public health sector were larger than the government had anticipated following reports of previously undisclosed major maintenance required on parts of Auckland's Middlemore Hospital.
His comments come also as nurses, teachers and the police force seek catch-up pay claims under a new government that they expect will be more sympathetic to the argument that their wages were screwed down hard during nine years of the National-led administration.
The New Zealand Nurses Union this week rejected a 2 percent wage increase offered by their district health board employers, leading Ardern to suggest government involvement in a process of independent mediation to try and avoid industrial action.
In his statement, Wagstaff said: "The prime minister has realised that underfunding in health goes even deeper than she expected when taking office. Mould is a visible symptom in our buildings, but it’s also visible in the unmet need for care in our community and the stress and burnout visible in health staff.
"This Government has committed not to present rosy budget figures at the expense of our people and our public assets."
Labour has also promised to continue running budget surpluses, albeit smaller than those projected under the previous government, and to keep government spending at around 30 percent of GDP, reversing the declining trend forecast under National.