Labour plus Greens equals billions more debt

Hon Steven Joyce

National Party
Campaign Chair & Associate Finance Spokesman

22 November 2011 Media Statement

Labour plus Greens equals billions more debt

National Party Associate Finance spokesman and Campaign Chair Steven Joyce says a short analysis of the Greens’ spending promises means that a Labour-Greens Government would drive New Zealand billions of dollars further into debt at the worst possible time.

"The Greens have a huge number of spending policies and none of them are costed. Some are eye-wateringly expensive. We've calculated that just nine of the Greens’ centrepiece policies would add about $25 billion to debt over the next four years, in addition to what Labour is already planning.

"Even if Labour agrees to just 25 per cent of these policies promoted by the Greens as part of a coalition deal, we would be looking at extra debt of more than $6 billion over four years, on top of the $15.6 billion that Labour is already promising to borrow. New Zealand simply can't afford a big-spending Government like that at this time. That would take the total to around $22 billion of extra borrowing.

"Taken together, the Greens and Labour policies would cost tens of thousands of jobs and massively ramp up debt."

Mr Joyce says the pricey Greens proposals include (costs over four years):
• Extending paid parental leave to 13 months = $4 billion
• Extending the 'In-Work' tax credit to beneficiaries = $1.7 billion
• Extending unemployment benefit to all students over summer = $1.6 billion
• Universal Student Allowance at the level of unemployment benefit = $4.2 billion
• Free 'wellness checks and dental check' = $3.6 billion
• Wiping one year's student debt for each year worked in New Zealand = $3 billion
• Green jobs initiatives = $3.2 billion.

And these are just a few of the Greens policies.

There would also be significant new costs for employers such as raising the minimum wage to 66 per cent of the average wage, increasing company tax to 30 per cent as part of the earthquake levy and imposing a 35-hour working week. That would cost thousands more jobs,” says Mr Joyce.

"It is clear that any Labour-Green-based government would quickly revert New Zealand to the high-spending ways of its predecessor, which ramped up government spending by 50 per cent in its last five years in office. That high spending, high debt scenario is the exact opposite of what the vulnerable world economic situation demands of New Zealand.

"Only National can provide a strong stable Government that keeps debt down and delivers on jobs. The alternative is big spending, big borrowing, and huge uncertainty. Any way you look at it - a Labour-led Government would owe our future.”