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Joyce gets it wrong on Labour’s Fiscal Plan

Labour’s Fiscal Plan is robust, the numbers are correct and we stand by them despite the desperate and disingenuous digging from an out-the-door Finance Minister, says Labour’s Finance spokesperson Grant Robertson.

“Steven Joyce has embarrassed himself. This is a desperate, cynical stunt to create a diversion. Our plan has been approved by BERL and they continue to stand by this plan. We stand by this plan. These numbers are robust and I refute Joyce’s allegations.

“Our operating expenses are above the line and are clearly stated. 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.

“This is a desperate act from a flailing Finance Minister. He knows that we have accounted for our expenditure in health and education going out into future years, He’s being disingenuous and trying to mislead the New Zealand public. I’m sure they’ll see through it.

“We have quite clearly put in the spending requirements to meet the promises we have made. Our fiscal plan adds up. We are absolutely clear that we have the money to meet the commitments that we’ve made.

“I challenge Mr Joyce. Is he going to fund health and education for the cost pressures of inflation and demographic changes? He needs to be up front with New Zealanders, because that’s what we’ve done.

“Labour’s Fiscal Plan details funding for housing, health, education, transport, police and other priorities, while running surpluses and paying down debt. We can afford to do this because we have put those priorities ahead of National’s plan for tax cuts that deliver $400m a year to the top 10 per cent.

“National has serious questions to answer about their own fiscals – they haven’t allowed $8.5b for cost pressures in health and education. They haven’t funded their GP policy properly. They haven’t said where the money for their $11b of capital spending will come from.

“We’ve been transparent, which is something that the National Party has never been. We’ve produced a detailed fiscal plan, they’ve produced a double-sided piece of A4 that lists their campaign promises,” says Grant Robertson.

Response to Steven Joyce’s claims:

 

Failing to roll out their operating allowances for each year into subsequent years ($9.4b)

  • National have made a simple mistake – Labour has put the money that National hides within the operating allowance in the accounts. Doing it this way is more transparent as New Zealanders can see how much more money will be going into the system.
  • National on the other hand has not done this, In 2018/19 National will have to provide $650m for inflation in health and education alone. Once you take this from their operating allowance they have less available than Labour.

 

Failing to allow for any increase in Paid Parental Leave in their family incomes package despite saying they have included it ($567m)

  • The money for this is incorporated within the Families Package Line within the Fiscal Plan. This has always been Labour’s position – and we have led the debate on PPL for the past three years.
  • The costing is based upon the MBIE advice to Ministers that was provided to the Select Committee that examined Sue Moroney’s original Bill.

 

Counting additional BEPS multinational tax revenue when Treasury has already counted it in the PREFU update ($902m)

  • Page 202 of Vote Revenue shows that for every dollar spent on investigations $7 of discrepancies are found. This has been a consistent message from IRD in select committees and in their publications. We are going to provide them with $30m of additional revenue for investigation activities so that they properly assess multinationals’ taxation statements.

 

Only including costs of their Family Package from 1 July 2018 when they said it would begin on 1st April 2018 ($289m)

  • Both versions of the Fiscal Plan have been clear that the Families Package will commence on the 1st July 2018. We will need to pass legislation to make this happen and to undo the $400m tax cut for the top 10 per cent of earners.
  • The website of the Labour Party did have a statement saying under the Families Package when it was first announced that it would be 1 April. But in terms of the numbers in the fiscal plan they have not changed at all, it has always been 1 July 2018.

 

Further finance costs associated with extra borrowing ($580m)

  • This is an erroneous figure. If indeed we were missing $11b in spending then we would need to find that finance cost. However, as is clear from P.14 of the Fiscal Plan we have accounted for the additional finance costs that our fully costed programme would deliver (see line “additional finance costs”).

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