National accuses Labour of $11.7b spending plan error, Labour says National got it wrong

HAMISH RUTHERFORD
Last updated 17:37 04/09/2017
ROBERT KITCHIN/STUFF

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Labour leader Jacinda Ardern defended her party's fiscal plan as robust.

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National campaign manager Steven Joyce has accused Labour of making basic errors in its budget plan which could add billions to government spending.

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National claims basic errors in Labour's fiscal plan could add billions to New Zealand's debt over the next five years.

Labour has quickly dismissed the attack as deliberate misinterpretation of its figures.

On Monday National finance spokesman Steven Joyce released claims that Labour's fiscal plan - which has been audited by economics consultancy BERL - contained at least four major errors.

Built mostly around the claim that Labour has mistakenly failed to include increases in operating allowances beyond the year they are introduced, Joyce claims the error amounts to an "$11.7 billion hole".

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"That level of spending and increased debt can only lead to one thing - higher interest rates for Kiwi mortgage holders."

Joyce said the operating allowances issue amounted to a basic error.

"If you pay increased salaries to police out of an operating allowance for a year, that then must continue in subsequent years," Joyce said, claiming that Labour had failed to do this.

"They're in effect only one-off items of expenditure [in Labour's plan]," Joyce said.

But Labour has dismissed the claims, saying the use of its term operating allowance was different to that Joyce had assumed, effectively meaning "leftover cash".

"Our operating expenses are above the line and are clearly stated," Robertson said.

"For health and education, which represent the lion's share within any year's operating allowance, there is around $6.7b for health, and around $1.8b for education, both clearly stated in our fiscal plan."

Meanwhile BERL executive director Ganesh Nana issued a statement last night disputing that there were errors in the work.

"The alleged 'hole' is a fiction arising from a disagreement over definitions," Nana said.

"[W]e make no assessment of the individual policies themselves, nor do we judge their worth. That is for the voters of New Zealand to judge. But the numbers do make sense."

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Robertson accused National of cynicism, in deliberately choosing to misinterpret its plan.

"I think this is a desperate act from a flailing Finance Minister," Robertson said.

"He's trying to, I believe, mislead the New Zealand public. I believe they'll see through it."

National's other claims were that Labour had failed to include the cost of paid parental leave in its families package, had included the same increase in tax collection from law changes twice and had failed to include the cost of the first three months of its families package.

Labour dismissed the paid parental leave claim, saying it was included in the families package, and the cost put on the programme by Joyce was inflated.

Robertson denied the party had made an error on tax collection, with the fiscal plan outlining an additional spend on tax collectors, backing IRD's claim that for every dollar it spends detecting tax avoidance, it recovers an additional $7.

Labour blamed the issue of the timing of its families package on the difference between the date on its website (April 1, 2018) and in its fiscal plan (July 1, 2018).

While Robertson said the party always intended to launch the programme in July, Joyce last night posted documents on Twitter showing as recently as yesterday Labour had been claiming the programme would be introduced in April.

- Stuff

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