Labour would hike its new spending to $18.4b

David Cunliffe and Labour have actually increased their new spending promises for the next four years to $18.4 billion, despite putting some of their proposals such as New Zealand Power on the never-never, National Party Finance Spokesman Bill English says.

“David Cunliffe and David Parker have again been caught out under-costing their expensive promises,” Mr English says. “This is irresponsible and deceptive and confirms that under David Cunliffe, Labour is reverting to its failed spend and tax recipe of the past.

“We saw what happened the last time around – under Labour in 2008, floating mortgage rates reached almost 11 per cent, inflation exceeded 5 per cent and the economy went into recession well before the global financial crisis.”

Labour’s latest costings attempt, which it released on Monday, confirm its untried New Zealand Power proposal, which would give politicians control of the electricity industry and push up power prices, would be postponed until 1 January 2018.

And in another example of it attempting to dress up its numbers, Labour has also pushed back free GP visits for over 65s and other groups to 1 January 2017.

“So while David Cunliffe is going around New Zealand making expensive promises, he is quietly pushing some of them back beyond two elections because he knows they are unaffordable,” Mr English says.

“But he has again failed to hide Labour’s real spending agenda because he has not added in promises made over the last two weeks.

“Even using Labour’s own numbers, the cost of its promises over the next four years is now $17.3 billion – up from its claimed $16.4 billion when it first attempted to cost its policies.

“But when the real costs of its proposed R&D tax credit, compulsory KiwiSaver and New Zealand Power are included, the tally jumps to $18.4 billion – up from

around $18 billion the last time around.

“As Labour’s numbers come under scrutiny, they keep changing them,” Mr English says. “David Cunliffe has tried to say he would spend less, but when you add it all up he is actually spending more.”

Authorised by G. Hamilton, 41 Pipitea Street, Wellington.

Labour Party Election 2014 Spending Announcements - as at 27 August 2014

Four year costings as per Labour documents unless noted
$m
27-Jan-14 Best Start Policy 614
27-Jan-14 Extended Paid Parental Leave 245
27-Jan-14 Maternity Policies 50
27-Jan-14 Early Childhood Education Announcements 352
19-Mar-14 Forestry Policy 28
14-Apr-14 Bowel Screening Programme 56
23-Apr-14 Veterans Pension Extension 37
23-Jun-14 Canterbury Policies 116
25-Jun-14 R & D Tax Credit* 1,079
25-Jun-14 Accelerated Depreciation 210
25-Jun-14 Universal KiwiSaver** 845
25-Jun-14 NZ Power*** 566
25-Jun-14 KiwiBuild 1,527
25-Jun-14 KiwiBuild Finance Costs 176
2-Jul-14 School Donation Policy 175
3-Jul-14 Family & Sexual Violence Policies 60
5-Jul-14 Digital Devices in Schools 120
5-Jul-14 Reading Recovery 140
5-Jul-14 Food in Schools 70
11-Jul-14 ICT policies 17
22-Jul-14 Regional Investment Fund 200
24-Jul-14 Digital and Connectivity Policy 21
30-Jul-14 Living wage for Public Sector 94
31-Jul-14 Centres of Vocational Excellence 40
4-Aug-14 Youth Employment Package 182
6-Aug-14 Primary Healthcare 150
8-Aug-14 ACC 40
10-Aug-14 Free Doctors’ Visits 540
18-Aug-14 Tertiary Education (incl ACE) 130
20-Aug-14 Aged Care 222
22-Aug-14 Welfare Policy 78
24-Aug-14 Immediate Funding of City Rail Link**** 800
25-Aug-14 Other Education Initiatives 45
25-Aug-14 Other Smaller Initiatives 80
25-Aug-14 Maintain Real Value of Spending in Public Services 9,000
25-Aug-14 Policy Soon to be Announced 289
Total Announced Spending Pledges 18,394

*Adjusted to reflect Treasury's forecast costs of the previous R & D Tax credit

**Adjusted to include the average Kiwisaver tax credit paid to new Kiwisaver members

***Adjusted to remove the claimed fiscal offset for wider benefits in one part of the economy that ignores wider costs elsewhere

****Labour says it would reprioritise existing transport spend but most of first 4 yrs committed/contracted

Note: some costs differ from the original Labour releases as a result of fiscal tables released 25 August.

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