Nats: Debt with no plan
National leader Simon Bridges says the Government’s Budget loads New Zealand up with debt, without a focused plan to grow the economy.
But his criticism of the Government is somewhat muted, with a frank acknowledgement that any government would be borrowing a lot of money now to keep the economy afloat through the coronavirus crash.
He opted not to call for a traditional vote of no confidence before his Budget speech, and says the extension of the wage subsidy in a more targeted form makes sense.
The Budget does see the Government leave behind its treasured Budget Responsibility Rules for large amounts of borrowing, albeit at low interest rates.
Debt balloons out to over 50 per cent of GDP, high for New Zealand, but lower than most Western countries.
‘‘I’m not saying that we shouldn’t be borrowing, and I’m not saying we shouldn’t be borrowing significantly,’’ Bridges told Stuff in a post-Budget interview.
‘‘The issue with $200b in total of debt is for households inevitably it means, future governments – Labour governments – will have to increase taxes somewhere to recoup that. ’’
‘‘The spending is the easy bit. I didn’t see a strong plan for jobs and economic growth in this Budget.’’
Treasury estimates a deep recession for the economy followed by a fairly rapid bounce back in two years, with unemployment peaking this September at 9.6 per cent.
Bridges said Treasury’s projections seemed very very optimistic to him.
He queried the Government’s priorities, comparing the $1.4b to rail to the $400m tourism package.
‘‘There’s 400,000 jobs [in tourism] as opposed to rail where it’s more like 4000.’’ He said a National-led Government’s Budget would have focused more on small to medium businesses, rather than ‘‘pet projects’’ like the rail boost.
‘‘I’m not saying it doesn’t have some worth. But it’s a lot of money. A National-led government’s Budget would have looked quite different, in as much as that investment would have gone into cash-flowing businesses.’’
Bridges also criticised the $20b left unallocated in the Covid-19 war chest, describing it as a slush fund that could be unleashed before the election.
‘‘That is enormous money. It will all have to be paid back by hardworking Kiwis.’’
Bridges said much of the money would never in fact get spent however, as the Government had such a problem delivering – pointing to failures in light rail and KiwiBuild.
Asked about how he would reduce the debt if elected, he said National would run a ruler over promised spending that was low priority, but promised no cuts to core public services.
He said National would release its own alternative Budget in coming weeks.