Spending figure ‘laughable’ response to deficit

WHERE there was smoke and mirrors, there was also Finance Minister Steven Joyce, Labour finance spokesman Grant Robertson said yesterday.

Reacting to Mr Joyce’s preBudget speech in Wellington, Mr Robertson said the $11 billion infrastructure spending announcement was an underwhelming response to the deficit National had created.

‘‘Steven Joyce has belatedly come to the realisation that everyone else has a long time ago: this country needs an urgent and enormous catchup from nine years of underinvestment by this government.’’

The $11 billion was only playing with numbers, he said.

When the numbers were peeled back, National was only promising to spend an extra $300 million a year on top of the promise made in the halfyear fiscal update.

‘‘This is just laughable. The new spending announced is only enough to buy 640 metres of the Auckland Central rail loop each year.’’

Act New Zealand leader David Seymour said the new public debt targets announced by Mr Joyce should be balanced with tax cuts to address private debt.

Mr Joyce announced a target of lowering net debt to 10% to 15% of GDP by 2025.

Mr Seymour said public debt remained relatively stable at just below $100 billion. However, private debt was set to breach $400 billion this year.

The International Monetary Fund had already highlighted New Zealand’s private debt levels as a risk to the economy.

It was important the Government had a longterm plan to steadily reduce public debt.

‘‘But when private debt is more than four times worse, the emphasis needs to be on returning government surpluses to households and businesses. The most obvious way is through tax cuts,’’ Mr Seymour said.

Debtladed New Zealanders, such as those struggling to pay off mortgages, deserved the right to pay off their own debt with the money they had earned, he said.