The New Zealand Herald

Ardern may have to ditch one of her nice-to-haves

- Claire Trevett comment

This week’s warning from Prime Minister Jacinda Ardern that the Budget was bare of treats was startling enough for the former Finance Minister to break from tweeting about the pesto ingredient­s harvested from his Albany vegetable garden.

Upon hearing Ardern say all the money would be sucked up by fixing hospitals, schools and miscellane­ous business and blaming “nine years of neglect by National”, Steven Joyce wasted no time tweeting. New Zealand’s version of Cassandra the false prophet was about to be vindicated — he could almost smell his much mocked fiscal hole finally emerging.

“Ardern is talking an unmitigate­d pile of political tosh,” he pronounced, saying he had warned repeatedly during the campaign that Labour’s Budget figures were too tight and now they were “trying to point the finger instead of admit it”.

So we enter the smog of he said, she said about how bad things really are, whose fault it is and how to pay for it.

Finance Minister Grant Robertson cast it in household terms, saying National was so busy trying to get back to surplus that it neglected basic maintenanc­e. He argued it was like somebody putting all their money into a savings account while their washing machine stood broken.

Robertson now says he will fix the washing machine but will not break the savings account (Labour’s “fiscal responsibi­lity rules”) to do so.

Those rules stipulate it must remain in surplus and pay down debt — which are very similar to the same goals Robertson had criticised National for.

Actually if there is a compelling enough reason to “break” a promise it should be done. If the public can be convinced of it, they will accept it, albeit begrudging­ly.

There would be a fuss and inevitable “told you so” yelps from the likes of Joyce, but that won’t be unsurvivab­le.

In particular there is leeway for a new and popular Government to go back on a promise because it usually has the political capital to withstand it.

Ardern ran on a platform of hope and change. She cannot stop after the first half.

If those fiscal rules are preventing her doing little more than tarring the ship she needs to look at them again.

They effectivel­y mean one promise is preventing them fulfilling other promises — not helped by the cost of the support parties’ promises.

Others have made the argument for Labour to break those rules, especially given low interest rates for debt.

They include Green co-leader James Shaw, who willingly signed up to the same fiscal responsibi­lity rules with Labour before the election.

Newsroom’s Bernard Hickey has suggested they treat infrastruc­ture issues and population growth in Auckland like a “shock” similar to the Christchur­ch earthquake. That could then justify drawing down extra debt.

When National was confronted with that very disaster it dropped some of its own wishlist — it downsized and delayed its own tax-cut programme from the 2008 campaign because of the global financial crisis and Christchur­ch earthquake. Instead it did the swap of a GST increase for income tax cuts in 2010.

National’s approach was based on then Finance Minister Bill English’s distinctio­n between the “must haves” and the “nice to haves”. Those on the right, including Act, are arguing that rather than abandon its rules Labour should pay for this by dropping some of its own nice-to-haves.

The chief nice-to-have Act points to is the fees-free policy for tertiary-level students at universiti­es or other institutio­ns.

Ardern does not see that as a nice-tohave, although it undoubtedl­y is so for at least some given it is applied universall­y.

But she cannot back away from it now — it was a cornerston­e promise of her election campaign, one of two pledges she pointed to as a stamp of her own leadership rather than a continuati­on of Andrew Little’s.

At the behest of NZ First the Prime Minister has already had to drop another of those key policies — the “water tax” on commercial users, such as irrigation, to pay for water-quality measures.

On the bright side, the debate has at least diverted attention away from Labour’s plans to raise fuel taxes.

And within two days, Joyce was back to the issues that bedevil a Dairy Flat gardener, tweeting about the weather.

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