Labour’s recipe for government is more tax, more spending and more debt:
. . To help cover the additional spending, Labour would ditch National’s promised tax adjustments, extend the bright line test to tax capital gains on residential housing, aggressively target multinational corporate tax avoidance, and impose a tourist levy, which would cumulatively reap some $9.73 billion over the period. Labour would also take a slower path to cutting debt a proportion of the economy, with net debt peaking at $68.09 billion, or 21.9 percent of gross domestic product, in 2019/20, adding an additional $1.11 billion interest bill to the government over the horizon. . .
It’s the same old tax and spend:
Labour is once again proving they’re the same old Labour Party with plans for big increases in both government spending and debt over the next four years, National Party Campaign Chair Steven Joyce says.
“In their fiscal plan released this morning, Labour has committed to $13.7 billion in additional spending over the next four years funded by cancelling tax changes for Kiwi families and increasing debt,” Mr Joyce says.
Cancelling the tax cuts would leave people on middle incomes paying more because of bracket creep.
It also shows Labour thinks it’s better to spend more of other people’s money than to leave a little more with them to spend, or save, as they choose.
“This nearly doubles the additional expenditure of $17 billion over four years already allowed for in the pre-election fiscal update. All up Labour is proposing to add more than $30 billion in new operating spending over the next four years. And then there’s additional capital spending as well.
“All this flows through into increased debt. Again by their own numbers, Labour will increase debt by $11 billion over four years compared with the pre-election fiscal update. This is not the stage of the economic cycle to be increasing debt. We should be reducing debt and putting money aside for the next rainy day.
The natural and financial disasters of the last nine years reinforce the importance of lower debt to provide headroom for more when the next one strikes.
“Labour’s tertiary policy announced today alone has an additional $3.4 billion over four years in expenditure in just one announcement.
“And the ink had hardly dried on their fiscal plan when they made another commitment to fund 26 weeks paid parental leave, which isn’t listed anywhere in the document.
“Labour also has some questions to answer about how their numbers add together. For example, their remaining annual operating allowances don’t seem to be cumulative.
“Big increases in expenditure and debt can only flow through into higher interest rates, and that would be bad for Kiwi businesses and homeowners. That’s before you even get in to Labour’s extra taxes.
Higher taxes and higher interest rates would put pressure on businesses and households.
“We need to keep the country moving in the right direction and Labour’s approach to spending and debt would only slow the country down and put up costs for consumers.”
It’s the same old Labour Party with the same old recipe which will increase the burden of government, undo a lot of the good that’s been done in the last nine years and act as a hand brake on the growth needed to generate the income required for first world services.