Treasury slams Labour’s band-aid economics

Labour’s Backwards Budget does little to support struggling Kiwi households, with Treasury advising that the one-off cost of living payment is a poor mechanism for addressing a long-term problem, National’s Finance Spokesperson Nicola Willis says.

“Treasury recommended against Labour’s one-off cost of living payment, advising that it would be a poor mechanism for supporting Kiwi families with what is a long-term problem.

“This is band-aid economics made up on the fly, with Finance Minister Grant Robertson only developing the payment in the past few weeks. Treasury said the advice was prepared with such urgency that it may not have identified all of the problems it will create.

“The payment also places considerable pressure on Inland Revenue, with 750 frontline staff required to administer the payment. As well as needing to bring in more staff, Inland Revenue has acknowledged that the customer experience for Kiwis interacting with the department will be degraded.

“The public sector is already becoming bloated under Labour and measures like this will only make it worse.

“National’s plan for indexation of tax thresholds would not only be easier for Inland Revenue to administer, it would also deliver more relief, permanently, to more people, with median wage workers receiving $800 a year.

“Kiwis are experiencing the worst cost of living crisis in a generation. Inflation has risen to levels that haven’t been seen in New Zealand in over 30 years and is expected to persist.

“Labour’s economic mismanagement is sending New Zealand backwards faster than ever, yet they continue to believe they know best.”