Labour's fiscal plan: responsible, balanced and fully costed
We’ve released our fiscal plan for next term, and it shows how we’ll continue to manage the Government books responsibly if re-elected on October 17th.
Now more than ever, New Zealanders need stability and certainty as we navigate our recovery and rebuild from COVID-19. Labour has proven we have what it takes to run a strong, stable Government that keeps New Zealanders safe, while protecting jobs, businesses and the economy.
Prior to the release of our fiscal plan, we outlined how we’ll keep a lid on debt in the Pre-election Economic and Fiscal Update (PREFU). The key difference between this fiscal plan and PREFU is that this plan incorporates the extra revenue raised from our new income tax rate on the top 2% of earners. This additional revenue will mean we can increase operating allowances slightly - the money we set aside to cover things like inflation, population changes and the implementation of new policies. With our new income tax rate, we can increase this allowance to $2.625 billion over the next four Budgets.
Our fiscal plan accounts for policies already announced during the election campaign, and sets aside funding for contingencies and policies that are yet to be announced. The government books already include our planned infrastructure investment of $42 billion over the next four years, and also money for additional capital investment over the next four years.
The extension to the Small Business Cashflow Loan Scheme, and promise to reintroduce the Training Incentive Allowance, will be funded from the COVID Fund, because of these policies’ importance to New Zealand’s recovery from COVID-19. However, our plan still leaves $12.1 billion protected in the COVID Fund. This is the right thing to do: it means if there were another resurgence, we are ready to keep New Zealanders safe, support businesses and protect jobs.
In contrast, National want to spend these reserves, which would leave New Zealanders high and dry if we were to have another resurgence. National’s plan puts New Zealanders’ lives and livelihoods at risk - cutting funding to vital services just to try and make National’s election promise sums add up. Their error-ridden, bungled budget would mean cuts to health and education in the middle of a global pandemic and economic recession. That is the very definition of irresponsible fiscal management.
We know that New Zealand, along with the rest of the world, is facing a 1-in-100 year shock due to the impacts of COVID-19. It is more important than ever is to have a plan that adds up, and one continues our progress for economic recovery. With Labour’s responsible, balanced and fully-costed plan, we’re on the right track. New Zealanders deserve a Government with a plan they can rely on to recover and rebuild - and Labour is making that happen.
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