ACT leader David Seymour said Finance Minister Grant Robertson's poor economic management has been revealed in the pre-election forecasts issued by the Treasury.
"The next government will need to take real action to balance its budget so Kiwis can balance theirs," Seymour said.
"PREFU shows Labour has no plan for paying off debt, no plan for turning things around, every year forecast the country borrows more and more until we lose first world status."
Meanwhile, National said the Pre-Election Economic and Fiscal Update show that six years of Labour's economic mismanagement has taken a toll on New Zealand, with "more pain to come".
Leader Christopher Luxon said Labour's high spending meant the economic slowdown would last another 18 months.
Despite the opposition's assessment the economic outlook, released this afternoon, is a bit more positive than expected, with a more moderate slowdown now predicted over the next few years.
The recovery will be largely driven by high levels of migration, that have helped stabilise house prices and fill critical skills shortages, it said.
But that comes with warnings about the potential impact on housing demand and inflation. Unemployment is expected to peak at 5.4 percent in 2025.
The update shows New Zealand should avoid recession in the coming months, but will return to surplus later than forecast in the Budget, and deliver larger deficits in the meantime.
During a media standup at parliament, Seymour said the country needed to go in a new direction that focused on reducing wasteful spending rather than having high spending, borrowing, debt and interest repayments and a large current account deficit that would take the country to 59 percent of GDP total foreign debt by 2026-27.
ACT would release an alternative budget to offer some hope to escape "the long, slow slip" next week.
He promised "fiscal responsibility" if ACT was part of a new government.
"Unfortunately this government has left us with no more money - they've run out of other people's money and we're now going to end up spending more on interest repayments than primary and secondary education."
Seymour said in a media release the update showed that within three years spending will be 11 billion higher than forecast last year which would lead to even more borrowing with net debt forecast to reach $100 billion by 2025.
"More debt means more interest. The interest bill is forecast to be $9.2 billion by 2026, exactly twice the $4.6 billion expected in BEFU 2022.
"New Zealand is now spending more as a country on interest than primary and secondary school education, and twice as much as is spent on police, courts and corrections combined. Kiwis' taxes aren't paying for public services, they're paying for Labour's mismanagement."
Seymour said government spending and borrowing was contributing to New Zealand's current account deficit blowout which remained in the negative throughout the forecast period.
"New Zealand is marking time and borrowing money to stand still, it's like we're still in Covid paralysis while the rest of the world has moved on."
Labour had gone from spending $80 billion a year to $139 billion a year.
In his comments Seymour also took a swipe at potential coalition partner National, saying its plans for savings of $2b a year have already been offset by PREFU forecasting for more than $2b in extra core Crown expenses in 2024 alone.
"Criticising but then keeping wasteful programmes like Fees-Free and free school lunches [which National has announced it will retain] is not the real change of direction New Zealand needs," Seymour said.
'Life shouldn't be this tough'
The economic forecasts show that six years of Labour's economic mismanagement have taken a toll on New Zealand, with forecasts showing a sustained economic slowdown, high inflation and high interest rates, Luxon said.
"Treasury's latest forecasts show the economy isn't working for Kiwis. The economic slowdown is expected to last for another 18 months, as interest rates stay high for longer in an attempt to combat persistently high inflation driven by Labour's addiction to spending."
"New Zealanders deserve better. Wages have been growing slower than inflation, the fortnightly cost of a $500,000 mortgage has increased by $750 in the last two years, and food prices have been increasing at rates not seen since the 1980s.
"As a result of our economic conditions, too many of our people are looking at opportunities overseas, with nearly 40,000 Kiwis permanently leaving the country in the last year.
"It is clear that Labour is out of ideas and has no plan to turn things around. New Zealand can do so much better."
At a media briefing, Luxon with finance spokesperson Nicola Willis alongside said: "Make no mistake, Labour's addiction to spending is driving this economic pain."
He said it was not just about the figures. Behind all the data, families were having to face tough decisions, such as taking on second jobs and giving up things like swimming lessons for their children.
"Life shouldn't be this tough," Luxon said.
"Labour has had no plan to grow the economy, other than spend more money."
Despite spending $1 billion more a week, the current government had little to show for it, citing a slip in educational standards, pressures on the health system and rising crime.
Willis said: "Labour has left the cupboard bare. After years of spending up a storm, the day of reckoning is now here."
Debt blowing out, the longest string of deficits (seven years), flat real GDP to the end of 2024 and high interest rates were among disturbing signs, she said.
By 2027 government debt would be $129b - $13b more than was projected in the Budget in May.
"There's a $13b hole in the economy which we learned about an hour ago."
She said Robertson had never curbed his spending and was not about to start now.
"We need to get discipline back in government spending and stop the waste."
Willis said after looking at the forecasts National remained committed to its plans for tax cuts.
"But we are also committing that every dollar taken in tax will be spent carefully."
Willis said the Nats had been "very conservative" in their projections to ensure they could provide tax cuts without penalising frontline services such as health and education which would actually be allocated higher funding every year.
Luxon said the country was seeing economic mismanagement on a scale it had not seen before, labelling Robertson "one of the worst finance ministers this country has seen". Better fiscal outcomes were required than what had been shown today, he added.
Like ACT, National would also be releasing a full fiscal plan, Willis said. It would be available before early voting started, Luxon said.
