Two main parties in fight over finances

The election campaign finally got personal yesterday as Finance Minister Steven Joyce and Labour finance spokesman Grant Robertson exchanged insults and allegations.

Mr Joyce started the day by claiming Labour had an $11.7 billion hole in its fiscal plan that blew its debt out and broke its own budget responsibility pledge.

"Labour's recipe would lead to more debt, higher interest tax rates and a slower economy - not to mention the cost of extra and unexplained taxes they would impose on households and businesses.

"All of this would cost jobs and eat into family budgets.''

Mr Robertson said Labour's fiscal plan was robust.

Steven Joyce
Steven Joyce
"The numbers are correct and we stand by them despite the desperate and disingenuous digging from an out-the-door finance minister.

"Steven Joyce has embarrassed himself. This is a desperate, cynical stunt to create a diversion.''

Mr Robertson said Labour's plan had been approved by Business and Economic Research Ltd (Berl) which continued to stand by its analysis.

Mr Joyce outlined five errors he had identified in Labour's fiscal plan.

They were:

• Failing to roll out operating allowances for each year into subsequent years, expenditure of $9.4 billion;

• Failing to allow for any increase in paid parental leave, expenditure of $567 million;

• Counting additional multinational tax revenue when the Treasury had already counted it in the pre-election fiscal update, incorrect by $902 million

Grant Robertson
Grant Robertson
• Only including costs of the Family Package from July 1, 2018 when Labour said it would start on April 1, a cost of $289 million;

• Further finance costs associated with extra borrowing, a cost of $580 million.

The biggest error was Labour's failure to continue each year's operating allowances for additional expenditure into subsequent years, he said.

When operating expenditure was added, such as increase in wages for police, the expenditure continued into following years.

Labour's operating allowances did not allow for that to happen.

Once corrected, Labour's spending plans resulted in net debt increasing by nearly $20 billion from current levels of $60.6 billion to $79.3 billion over four years, Mr Joyce said.

"Labour's true spending plans as revealed in this analysis confirms behind the leadership change we are dealing with the same old irresponsible tax, borrow and spend Labour Party.''

Mr Robertson said Labour's operating expenses were above the line and were clearly stated.

For health and education, which represented the major share within any year's operating allowance, there was about $6.7 billion for health and about $1.8 billion for education, both clearly stated in the fiscal plan.

National had questions to answer about its own fiscal plans as it had not allowed $8.5 billion for cost pressures in health and education, he said.


 

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