Billions in social spending pledged

"We can continue to run surpluses and pay down debt because, unlike National, we do not believe a tax cut can be justified at this time." Labour leader Andrew Little

Labour is promising multibilliondollar injections into health and education.

If elected, Labour Party leader Andrew Little said he would pump $8 billion more over four years into health and $4b into education, all the while maintaining surpluses of more than $4b.

The party released its fiscal plan at an event in Wellington’s Kilbirnie Medical Centre yesterday. It provided broad-brush numbers of what Labour would spend in the key social areas of health, education and housing.

Its plan was independently vetted by economic consultancy firm Berl, certifying it would stick within Labour’s own budget responsibility plan, jointly signed with the Green Party.

At the election, the Government invested $16.2b into health. Labour claimed the Government had underfunded health to the tune of $2.7b over the past nine years. Labour’s promise would add $8b on top of what the Government had already allocated.

‘‘Labour’s Fiscal Plan prioritises new investment in housing, health, education, and infrastructure. Our plan will boost the incomes for low and middleincome families, create opportunities for our young people, and improve the lives of all,’’ Little said.

‘‘Our fiscal plan shows New Zealanders that we will make the investments required to re-build our core public services, reduce inequality and poverty and invest for the long-term benefit of New Zealand, while also responsibly managing our country’s finances,’’ said Labour finance spokesman Grant Robertson.

The plan incorporated already-announced policies including $5b more for a families package to replace National’s and a $500 million kickstart to resume payments to the Super fund from next year.

A $2b kickstart for Labour’s Kiwibuild housing programme had been factored in, and $10b to make as-yet unannounced spending promises, negotiate with other parties for their spending promises and allow for new initiatives over the next four years.

Labour has railed strongly against what it calls Government cuts in health and education.

The policy document only provides overall investment figures, but says the extra health money would go to ‘‘mental health services, more affordable primary care, providing more operations and the latest medicines’’.

Its education funding would cover the cost of already-announced big-ticket items like the party’s policy to allow three years’ free tertiary education or training. It would also boost general funding to schools and early childhood education centres.

‘‘We can continue to run surpluses and pay down debt because, unlike National, we do not believe a tax cut can be justified at this time,’’ Little said.

‘‘It is simply not credible for the Government to say that $1000 tax cut for Bill English and me should be a priority over ensuring New Zealanders have homes to live in, modern schools, and world-class healthcare when they need it.’’

However, Finance Minister and National campaign chairman Steven Joyce said the plan was a ‘‘classic Labour tax and spend’’.

‘‘The Labour Party’s fiscal policy reveals they want to borrow $7.2b more than the Government over the next four years while still cancelling tax threshold changes for low and middle-income earners,’’ he said.

‘‘But this is the wrong time to be building up debt. We need to be reducing debt now to be ready for the next rainy day.’’

Under the joint Labour PartyGreen Party budget responsibility rules, both of the parties must agree to maintain operating surpluses, reduce debt to 20 per cent within five years and keep government spending to 30 per cent of GDP.