New Zealand Labour Party

Panic and back-flips can’t hide twin deficits

National’s token measures to fight fires they have left burning for seven long years can’t hide a Budget that is long on broken promises, short on vision and fails to reach surplus, says Labour’s Finance spokesperson Grant Robertson.

“After being bystanders to the housing crisis and growing inequality, they have been forced to backflip and admit they are problems facing many New Zealanders. The solutions are woefully short of what is needed.

“The years of neglect leave their twin deficits of ideas and money as the ultimate legacy of this Budget. There is no plan to boost growth, support business and create the jobs and opportunities needed in the new economy. Cutting KiwiSaver will reduce savings at a time we need to increase them. We need long term thinking, not short term.

“National has failed the test they set themselves to get into surplus this year and broken their promise of two election campaigns. Not reaching surplus at the peak of the economic cycle is a huge failure and makes a mockery of National’s claims to be good economic managers.

“Despite their wafer-thin forecasts it looks highly likely they will post their eighth deficit in a row next year because there is no clear path to get the books back in the black.

“Today’s policies will not fix the problems that have built up for so long. Forecasts today show we are at the top of the cycle with annual growth set to tail off to 1.8 per cent in mid-2019. There is nothing in this Budget to transform the economy and support growth and innovation.

“During similar growth in 2006 the last Labour Government posted a $7 billion surplus and unemployment was at 3.7 per cent, compared to National’s $684 million deficit and jobless rate of nearly 6 per cent. That’s tens of thousands of missed opportunities.

“What is missing from this Budget is the direction or vision to give New Zealanders a sense of hope and opportunity. It’s only last minute panicking, tweaking and twiddling. 

“Critically, they have continued to neglect the urgent need to diversify the economy and boost exports. National needed to take action today to stop New Zealanders’ economy, jobs and opportunities from remaining at the mercy of commodity prices. This meandering path will mean more New Zealanders will be left out and left behind.

“National neglected to take action on four key areas: supporting the regions, diversifying the economy, fully addressing the Auckland housing bubble, and developing the skills New Zealand workers need in the new economy.

“After spending seven years saying there were no problems in housing, child poverty or the surplus target National has hit the panic button and done backflip after backflip. The backflips are well short of what is needed.

“For the seventh year in a row National has failed to reach surplus. For the seventh year in a row this Government has failed New Zealanders,” Grant Robertson says.