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Cameron Burnell / Stuff
Labor’s Grant Robertson has criticized National for getting the basics wrong.
Labor Party finance spokesman Grant Robertson says he has found a $ 4 billion hole in the National Party’s fiscal and economic plan over the next decade.
National admits he’s a “fair cop” but says he won’t change the plan, released Friday, in any major way.
National’s plan, which included curbing spending and a large temporary tax cut, also planned to suspend contributions to the New Zealand Superannuation Fund as a way to free up money and pay off debt faster.
It is the accounting for this change that seems to have stumbled the party. Instead of using the figures from last week’s Pre-election Fiscal and Economic Update (PREFU), it used the figures from the May Budget (Fiscal and Economic Update of the Budget).
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The Treasury revised downward projections for the size of retirement fund contributions over the next decade last week from $ 19.1 billion to $ 14.8 billion, leaving a deficit of $ 4.3 billion.
A comparison of the BEFU and PREFU tables shows that the difference over the official forecast period for the next four years is $ 1.72 billion.
Nationals finance spokesman Paul Goldsmith called the mistake “fair police,” but National says it would only increase National’s top debt-to-GDP level by one percentage point, still well below Labor.
“What we didn’t realize was that Labor made a reduction in its own contributions to the New Zealand Super Fund without announcing it or telling anyone,” said Goldsmith.
“So instead of reaching 35 percent of debt to GDP, we ended up at 36 percent, which is much lower than 48 percent, but good.”
A comparison of the BEFU and PREFU tables shows that the difference over the official forecast period for the next four years is $ 580,000.
The change would not affect the temporary tax cuts proposed by the National Party, which are being paid for by withdrawing $ 4.9 billion of the $ 14 billion that Robertson had set aside from the Covid-19 Response and Recovery Fund for future Covid policies, if necessary.
Instead, it would affect the pool of money available for National’s ongoing spending plans or to pay off debt. But since the changes are over a decade old, the impact is not huge.
Robertson lashed out at National for getting the basics wrong.
Ross Giblin / Stuff
Paul Goldsmith has admitted that the complaint is a “fair cop” but says it will not change the party’s plans.
“If National can’t even do the required basics on their own policy costs, they can’t be trusted to run the country. Making mistakes like this has real world consequences that New Zealand does not need at this challenging time in our history, ”said Robertson.
The Labor Party figures have been verified by the economic consultancy Infometrics.
“The mistake means they have $ 4 billion less than so-called ‘savings’ to pay for their ill-thought-out plan. This raises the question of whether there are other errors in his plan. “
Unlike some cost disputes in previous elections, the apparent error appears to be a transparent case of using slightly outdated figures (for May instead of September), not the result of using controversial assumptions or making heroic predictions.
“But we were surprised, given all the attacks they have made on us for not contributing to the superfund, they have quietly reduced their contributions,” Goldsmith said.
“It means that in the end we end up with a maximum of 36% of debt to GDP, not 35%.”
