Our fiscal plan shows New Zealanders that we will make the investments required to re-build our core public services, reduce inequality and poverty and invest for the long term benefit of New Zealand, while also responsibly managing our country’s finances.
The last nine years have seen a systematic under-funding of core public and social services by the National government. We need a fresh approach to put people first. The fiscal plan confirms that we have rejected National’s Budget tax cuts. This is the right thing to do. Now is the time to give more support to families, build houses and fund health and education properly.
At the same time, we will restart contributions to the New Zealand Superannuation Fund. The National Government has not put a single cent into the Fund since 2009. By saving now, we spread the cost of the ageing population out over decades, rather than leaving it to future taxpayers.
Restarting contributions to the Super Fund is in keeping with our Budget Responsibility Rules. These five rules, jointly announced in March with the Green Party, create the fiscal framework within which we have made spending and revenue decisions. They ensure that a future Labour-led government will continue to post surpluses, allowing us to pay down the record debt built up by the current Government.
Labour is determined to build durable public services, and that means ensuring that the Government’s fiscal position is robust and able to withstand future economic shocks.
Meeting our target under the Budget Responsibility Rules to ensure government spending as a ratio to GDP is around 30% will reverse the declining trend under National. It will mean that the health system, the education system, and the Police have the resources they need to do the jobs that New Zealanders expect of them.
Our Budget Responsibility Rules also require that we have a progressive, fair and balanced tax system. We will establish a tax working group in government with a mandate to get a better balance between how we tax assets, wealth, income and consumption. In the meantime we are proposing changes that move in that direction. We will also stop multinational corporations from free-loading on New Zealand — taking the benefits of the physical and legal infrastructure as well as our education and health systems without appropriately contributing to the taxes that pay for them.
In government we will ensure that the Budgets we produce are not just narrow fiscal documents. We will measure our success in how we improve the well-being of all New Zealanders, how we are reducing child poverty and improving sustainability. We will always remember that our fiscal plan is merely the means to the end of supporting New Zealanders to have lives of dignity, security and hope.
Labour Finance Spokesperson