Promises made on the never-never

20:18, Nov 23 2011

The 2011 election is fast drawing to an end but at times you could have been forgiven for thinking you were in the 2014 – or even 2017 – campaign.

National's tight fiscal plans, including a zero allowance for new spending this year, have left little room for extravagant policies as the party aims to put last year's record $18.4billion deficit behind it and bring the books back into the black by the 2014 election.

Labour, too, has been keen to appear fiscally responsible, and is also promising to return to surplus in the 2014-15 year, though it will have to run a higher debt track in the short term because it will not have the income from the assets National is planning to sell, plus it is also pledging to put $6b into the Cullen superannuation fund to pre-fund the cost of pensions.

But the cross-party consensus on the need for austerity has seen many spending promises made on the never-never, meaning they may still be in the future when we next go to the polls in 2014.

So National will activate its "soft compulsion" option to enrol workers in KiwiSaver only when the books are back in the surplus – in other words, in 2014-15, provided there are no hiccups or meltdowns on the global stage.

A resumption of contributions to the Cullen fund is similarly on the backburner till the surplus allows, in about 2017.


Labour has approached the problem tangentially, by finding ways to fund its plans through long-term economic plans and promising far-reaching – and far-off – measures.

So its plan to raise the state pension age from 65 to 67 starts in two-month steps in 2020 and would be completed by 2033.

Its 15 per cent capital gains tax will only start delivering serious money – $250million – in 2014-15, and will not reap $1b annually until 2018-19.

Labour's extra help for the poor, by extending the in-work tax credit to beneficiaries, will be phased in from 2013 till the election after the election after next.

At times it has been hard to know whether the parties are campaigning for this election or the next, or the one after.

But in tough times, it is proving easier to spend tomorrow's money today, rather than finding the cash up front.

The Dominion Post