The New Zealand Herald

‘Jam tomorrow’ warning sales pitch for more taxes

- Claire Trevett comment

“Jam tomorrow” was the label given to former Finance Minister Michael Cullen’s Budget as he withheld treats for taxpayers and this Government seems set to pick up where he left off.

Prime Minister Jacinda Ardern and Finance Minister Grant Robertson stood up yesterday and announced Labour would not be able to afford to do what it had wanted in next month’s Budget because it had to put its money into health and education.

The reason, they insisted, was because National had left things in a more parlous state than expected.

Such claims should be taken with a grain of salt.

Labour’s plight is due to more than that — it also has the cost of its support partners’ policies to contend with.

But the saga of leaking buildings at Middlemore Hospital could not have come at a better time for an exercise in blaming the other side.

Ardern pointed to Middlemore as “emblematic of what we are seeing across the board” and said Labour would release further examples over the next six weeks.

These sniper attacks on National’s record were necessary “to make our case” for the steps required in the Budget.

She insisted the reason she and Robertson were talking about it was an attempt to “manage expectatio­ns” and a “transparen­cy” exercise.

Translated, it was an attempt to soften up the public for what is coming (or rather, not coming) with the added benefit of an excuse for a prolonged attack on the previous Government’s record.

While Ardern was willing to be more than transparen­t about the problems National had apparently left, she was less willing to be transparen­t about the things Labour would not be able to do as a result.

National finance spokeswoma­n Amy Adams accused Labour of “crying wolf”, saying it had plenty of money thanks to National but its own spending promises were too big.

Labour has admittedly found itself in a Catch-22 situation partly of its own making.

During the campaign the party announced it would stick to fiscal responsibi­lity rules to stay in surplus and pay debt. It also ruled out lifting income tax or imposing new taxes in its first term which now means it has no way to raise the revenue it needs to pay for all its promises.

Both were necessary sacrifices to ensure a chance to get into government.

In that regard, it worked. But now payday has arrived and the kitty is short — just as many had warned.

Despite the apparent urgent need for spending, Robertson and Ardern are sticking to fiscal responsibi­lity. They believe with justificat­ion that will be the barometer by which Labour is judged on its economic management.

But Budget 2018 is not the ultimate target of the softening-up exercise on voters. The ultimate target is 2020, when Labour will go back to the polls and seek to convince the public of the need for new or higher taxes.

Yesterday it started to make its case for that.

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