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National blasts Labour's budget

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Last updated 19:32 11/08/2014

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National is ramping up claims of Labour extravagance, saying it has made reckless spending promises. 

But Labour has rubbished that, saying it has costed all its promises and will deliver surpluses over the next term of Government – as it did for nine years when it was last in office.

Associate Finance Minister Steven Joyce said Labour’s own numbers showed spending promises to date of $16.4 billion over four years, but he calculated the figure was almost $17.9b.

National’s own allowance for new spending is $1.5b a year – a total of $15b over the same four years.

“They have woefully underestimated the costs of introducing compulsory KiwiSaver, dismantling the electricity sector and paying a 12.5 per cent research and development tax credit,’’ Joyce said.

But Labour finance spokesman David Parker hit back, calling on Joyce to ‘‘put up or shut up’’ on his own spending plans for the years ahead.

Labour had set aside $1b a year to cover the impact of inflation and population changes on social spending – a total of more than $9b over four years to cover future cost pressures.

‘‘He’ll face them too, but he’s not accounting for them. We are,’’ Parker said.

‘‘Mr Joyce’s claims are riddled with what are either amateurish mistakes or intentional errors intended to mislead. ‘‘

But Joyce said the $17.9b cost National put on Labour’s promises would go higher, as it made ‘‘more desperate promises – and that’s not counting the big spending of their prospective coalition partners, the Greens’’.

“Labour is making very big spending commitments despite New Zealand being yet to post its first surplus since the GFC and the Canterbury earthquakes.’’

Joyce also questioned its estimate of the cost of universal KiwiSaver.

“It’s interesting that Labour’s costing of exactly the same policy in 2011 was more than two-and-a-half times higher than it is now in 2014, so it looks like they’ve cut a few corners this time around.”

But Parker said Labour’s numbers on KiwiSaver and its broader alternative plan were right.

‘‘Cleverer people than Steven Joyce have critiqued our budget for two months now, and we are absolutely confident our promises are paid for and we are in surplus.’’

Treasury will release up to date figures on the Budget track and the state of the economy in its pre-election update on August 19.

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