New Zealand Labour Party

Govt ignored warning of spending blowout

Treasury warned National that it could not meet its public promises on spending from the proceeds of asset sales, and this would lead to a $2 billion shortfall, Labour’s Finance spokesperson Grant Robertson says.

“Documents released to Labour under the Official Information Act show that officials warned ministers in February the Future Investment Fund – made up from asset sales revenue – would not be able to cover the raft of promises the Government said it would cover. 

“Most New Zealanders hated the idea of asset sales. Now the Government is rubbing salt into the wound by not following through on their health and education spending commitments.

“After promising a billion each for health and education from the $4.7 billion of asset sale proceeds, the Government was advised that fulfilling that commitment would contribute to a $2 billion dollar blowout that would have to be covered from other areas or by deferring spending to later years.

“National has chosen to break yet another election promise. This is poor financial management, and it is misleading the public. A responsible government shouldn’t promise what it can’t deliver.

“National promised that close to half the proceeds from asset sales would fund new schools and hospitals, yet just over a quarter of the funds have gone into health and education.

“Instead, documents show that ministers have treated asset sale proceeds as a slush fund for pet projects, including: maintenance on the Beehive and Government House, relocating the Christchurch Archives office, a World Bank subscription and a labour market ‘vision’ document.

“These may be worthy projects but they are not what New Zealanders thought they were getting. 

“This is not just National breaking its word to New Zealanders, these broken promises are worth billions of dollars,” Grant Robertson says.