Labour’s fiscal plan sets out its priority differences
Labour is promising to spend $20 billion more than National over the next four years, mainly on health, education and its families package in a plan Labour hopes will offer voters a stark choice.
It has also set aside $10b in unallocated spending over that time from which it could fund some of the large spending promises of potential coalition partners New Zealand First and the Greens.
Outlining Labour’s fiscal plan, finance spokesman Grant Robertson said the party would spend $8b more on health, $4b more on education and $5b more on low-income families.
“We have different priorities than the National Party. They are prioritising tax cuts. We are saying no. The time is right to invest in those social services and to invest in the future,” Robertson said. “This is about very different priorities and I am proud to stand by ours.”
Robertson has used Treasury’s economic forecasts from the May Budget on which to base his own plans for income and expenditure.
Those forecasts will be revised in Treasury’s Pre-election Fiscal Update on August 23.
“But we believe this is a plan that is progressive, that will build a fairer New Zealand and is properly and adequately costed.”
Among the big-ticket spending capital items in the four-year plan is $2b on the Kiwibuild policy, aimed at building 10,000 new homes a year for 10 years, and $3.85b to the New Zealand Superannuation Fund.
Labour has several revenue-earners for its four-year plan:
$8b by cancelling the tax cuts in National’s Budget.
$300 million by extending the capital gains tax on investment houses to those sold within five years instead of the current two years, and banning the right to claim tax losses on investment properties.
$800m from pursuing multinationals to pay more tax;
$105m from as-yet-unannounced changes — likely to be a tourist levy floated by leader Andrew Little.
The plan would see Labour posting surpluses every year from $4.3b in 2018-19 to $7.4b by 2021-22, a little less than National forecasts.
Labour has a slightly slower debt track than National. It would get net debt as a percentage of GDP to 20 per cent within five years, a little later than National’s target of 2020.
Robertson said the spending had been planned within a very responsible set of budget rules.
Finance Minister Steven Joyce said it was “a classic Labour tax and spend approach”.