Labour challenged to come clean on $18.2b bill
Labour needs to come clean about how it is going to close the $18.2 billion gap between its spending plans and revenue intentions, National Party finance spokesperson Nicola Willis says.
“Labour leader Chris Hipkins and senior Labour MPs have repeatedly claimed they would come clean after the Budget on their plans to meet the cost of their growing list of election promises.
“Instead, this week Labour announced yet another dubiously-costed policy that will cost at least a quarter of a billion dollars, with no credible plan to pay for it.
“There is no magic money tree that can be plucked to pay for Labour’s election promises. The government’s books are in deficit.
“Any spending by Labour will have to be funded either by higher taxes or further ratcheting up New Zealand’s debt-servicing costs which already amount to $9 billion a year, almost as much as gets invested in primary and secondary education.
“Labour’s track record in Government shows that approach is a recipe for higher inflation, higher interest rates and more pressure on the cost of living.
“As of this week, Labour’s promises total $21 billion over the forecast period. That is a conservative estimate, based on publicly available information including Labour’s own costings and Budget documents.
“The only tax policy Labour has announced so far is a capital gains tax forecast to raise $2.8 billion in revenue, which leaves a funding shortfall of $18.2 billion.
“New Zealanders deserve to know how Labour will raise the rest of the money required to pay for their promises.
“Is it by abandoning the path back to surplus, and saddling New Zealanders with more debt?
“Is it by reversing the tax relief delivered in Budget 2024 that saved households an average of $102 each fortnight?
“Is it by expanding their capital gains tax to target farms, listed shares and other business assets?
“Is it by scrapping Investment Boost, the tax deduction scheme that is incentivising business to invest in productivity-enhancing equipment, machinery and tools?
“Or is it a combination of all of the above?”
Labour’s spending commitments to date include:
- Reinstating its deeply flawed pay equity scheme ($11 billion)
- Transferring the dividends from Crown owned companies to its Future Fund ($2.8 billion)
- Reversing public sector savings ($2.8 billion)
- Reversing income-related rent changes ($542 million)
- Returning to locally made school lunches ($427 million)
- Capping public transport fares ($260 million)
- Three free doctors’ visits for everyone ($2 billion)
- Free cervical screening ($82 million); and
- Other additional health spending ($1.2 billion)
“Those commitments do not include some of the other policies Labour has declined to rule out such as Chris Hipkins’s failed Fees Free scheme or the Government decisions it has railed against including the decoupling of benefits from wage rates, the scrapping of the GIDI fund and the disestablishment of the Māori Health Authority.
“It is now just five months until the election and New Zealanders still have no idea how Labour would meet its commitments or whether it will reverse Government decisions it has disagreed with.
“Given that Labour’s profligate spending when last in government drove up inflation and saddled Kiwis with an additional $120 billion of debt, New Zealanders deserve to know what Labour, in partnership with the Greens and Te Pati Māori, would do differently this time.
“The Budget clearly sets out the state of the government’s finances. Labour no longer has any excuse to withhold how it will pay for its spending plans. It should come clean with the public about its hidden bill.”
LINK to Labour's Hidden Bill HERE