David Cunliffe and Labour are still committed to irresponsibly spending all of the next four Budgets before the election, despite yesterday attempting – and failing – to recast their ropey fiscal forecasts, National Party Finance Spokesman Bill English says.
“New Zealanders can now see that under David Cunliffe economic history would repeat itself,” he says.
“Having been part of a Labour government that left New Zealand in recession with high interest rates, forecasts of never-ending deficits and ever-rising debt, David Cunliffe has again confirmed he has learnt nothing from the fiscal and economic mess Labour left for New Zealanders.
“Two election campaigns on, he has reverted to form with new spending promises still totalling nearly $18 billion over four years. Having been criticised for being fiscally irresponsible, he belatedly realised he had over-stretched and has attempted to back down. But it hasn’t worked.
“David Cunliffe has scared New Zealanders with his spending plans and he’s scared his partners the Greens. He’s now even scared himself. No wonder the Greens are calling for a full audit of Labour’s numbers.
“The trouble for Labour is that its claims of trimming extra spending just don’t stack up because proper costings of Labour’s tweaked promises still add up to around $18 billion over four years. And that’s before you add the Greens’ promises to spend an extra $10 billion over the same period – and who knows how many billions more by the Dotcom party.
“By contrast, National has committed only a small fraction of future Budgets. This will provide us with flexibility to deal with future shocks, speed up debt repayment or provide future tax reductions should there be room to do so.”
Labour’s spending is predicated on more tax income on the back of higher tax rates and new taxes, including a Capital Gains Tax.
It ignores the fact that increasing the tax rate and adding new taxes doesn’t bring in a corresponding increase in the tax take and can reduce it.
On top of that its less flexible employment law and other costs to and constraints on business will act as a handbrake on economic growth, wage rises and job prospects.
And that’s without taking into accounts the expensive price it will have to pay to cobble together a coalition with the Green, New Zealand First and Internet Mana parties.