Labour has borrowed too much, spent too much and wasted too much.
The Pre-election Economic and Fiscal Update (PREFU) gives very clear evidence of Labour’s mismanagement :
Treasury’s pre-election economic forecasts show that six years of Labour’s economic mismanagement has taken a toll on New Zealand, with forecasts showing a sustained economic slowdown, high inflation and high interest rates, National Leader Christopher Luxon says.
“Treasury’s latest forecasts show the economy isn’t working for Kiwis. The economic slowdown is expected to last for another 18 months, as interest rates stay high for longer in an attempt to combat persistently high inflation driven by Labour’s addiction to spending.
“Government spending is up by $6.5 billion over the coming years, the return to surplus has been delayed for the third time and Government debt has blown out by $13 billion, soaring above $100 billion next year.
“As Treasury says, ‘households and businesses are expected to remain under pressure’.
“New Zealanders deserve better. Wages have been growing slower than inflation, the fortnightly cost of a $500,000 mortgage has increased by $750 in the last two years, and food prices have been increasing at rates not seen since the 1980s.
“Sadly, there’s more pain to come with Treasury now forecasting:
- the economic slowdown to persist through to the end of 2024,
- inflation to stay above target levels until the end of 2024,
- interest rates to stay higher for longer in an attempt to combat inflation,
- a delay in the return to surplus to 2027 – meaning seven straight years of deficits, and
- debt servicing costs rising to $11 billion per year.
“These figures assume Labour will stick to their proposed spending limits – something they have never done. In the 2020 PREFU, spending was expected to be $116 billion this year. But Finance Minister Grant Robertson’s excessive spending has lifted this to $139 billion – a $23 billion blow-out. Indeed, Treasury even includes a scenario in their forecasts where the Government does not stick to their Budget allowances.
“Overall, it all equates to Labour spending over $1 billion more per week than when they took office in 2017.
“The economic outlook is a distinctly New Zealand problem. New Zealand is the only country in the Asia-Pacific region in recession and the IMF is forecasting that New Zealand’s economic growth prospects next year are among the very worst in the world. In contrast, Australia’s books are in surplus.
“As a result of our economic conditions, too many of our people are looking at opportunities overseas, with nearly 40,000 Kiwis permanently leaving the country in the last year.
“It is clear that Labour is out of ideas and has no plan to turn things around. New Zealand can do so much better.
“This election is an opportunity for change and a chance to get the economy working for all New Zealanders. National has a plan to do exactly that.
“National’s plan to rebuild the economy includes:
- stopping wasteful spending and getting the books back in order,
- delivering tax relief to encourage hard work and ease the cost of living crisis,
- cutting red tape to make it easier to invest and grow,
- building infrastructure for growth like roads and public transport,
- growing skills to expand our workforce,
- driving technology and innovation, and
- being open to the world by supporting trade and investment.
“National will rebuild the economy because that is how we lift wages, grow jobs and help Kiwis get ahead. A strong economy is how we end the cost of living crisis and get mortgage rates under control. It is also how we afford the quality public services we all rely on and deserve.
“New Zealanders now have a clear choice this election – a strong stable National-led Government with a plan to rebuild the economy. Or three more years of a high taxing, high spending Labour-led Government with no plan to address the economic issues facing New Zealanders.”
When National took over in 2008 it faced a decade of Labour-led deficits. Good management by National managed to return to surplus earlier than Treasury predicted and it will take a new National government to do that again.
The PREFU has confirmed what a majority of people believe – the country is on the wrong track:
Although there is too much variation in the current polling to be confident of what specifically will happen on election night, we can say, with some certainty, a change of Government is coming.
We can say that because, if for no other reason, we have yet another poll that asks the questions that give it all away – is the country going in the right direction? Is the country on the right track?
The Post/Freshwater Strategy poll says ‘no’. Not only does it say no, it tells us 63% think it’s going the wrong way. 21% think it’s OK and 15% aren’t convinced either way.
Here is the critical point; even if you allow for plus or minus, even if you asked the questions a different way, even if you did the poll over again, the number for the wrong way is so large it can’t be wrong.
It might be 61% or 59% or 66% or 68% but it is indisputably the majority of the country thinking the same thing.
We are not heading the right way. . .
Labour’s borrowing, spending and wasting is responsible for the dire state of the economy and the people who did the damage can’t be trusted to repair it.
The interest bill alone is now around $5 billion. That’s an eyewatering amount of money that isn’t available for education, health, infrastructure and other essentials.
The solution isn’t the left’s usual tax-more and waste-more policies.
The solution won’t come from Labour which is responsible for much of the problem.
The solution is sound economic management that fosters productivity, rewards effort and provides a strong foundation for growth.