Nats deny dodging debt, as target becomes $100b problem
The National Party says its proposed infrastructure bank is not a way of shirking the party’s low debt target.
But finance spokesperson Paul Goldsmith says new borrowing rules could make it even more difficult to reach his goal of reducing net core Crown debt to 30 per cent by about 2030.
National’s debt target would require it to have borrowings $80 billion lower than what is currently forecast – or to grow the economy much faster.
Leader Judith Collins has promised to create a national infrastructure bank, which would help manage the borrowing for infrastructure done by the many various parts of the Government.
It would do this by borrowing money itself to finance an infrastructure boom.
But Labour finance spokesperson Grant Robertson has accused Goldsmith of using the bank to hide National’s borrowing off the main government balance sheet, making the debt target far more achievable. ‘‘It is clear evidence of the chaos within the National Party. They can’t figure out how to make their massive spending promises add up, so they are trying to magic the debt away,’’ Robertson said.
By placing all of its borrowing in a Crown entity, it would disappear from the core Crown balance sheet, allowing National to borrow more without putting its debt target in danger. Both Labour and National have allowed entities, such as Kainga Ora, to borrow on their own balance sheets.
Kainga Ora can currently borrow up to $7.1b, all of it kept off the Government’s main balance sheet.
National wants to increase that off-balance sheet by allowing Waka Kotahi NZTA to borrow $10b over the next decade to finance a transport infrastructure boom. Goldsmith said he would make sure borrowing done by the bank was counted towards the core Crown debt target.
‘‘We would include that in our overall debt figures for transparency. The point we are making is if there is Crown borrowing through that [the bank] we would, as a policy, include that in our overall debt figures.’’
Goldsmith said he would take advice from Treasury on the best way to report the borrowing.
But the policy opens up a few problems for Goldsmith. He said big-borrowing agencies such as Kainga Ora and NZTA would be able to use the bank if they wanted. Rolling the borrowing of Kainga Ora and NZTA into the bank, and therefore on to the core Crown balance sheet, could be a problem for National. Under a National-led Government, those institutions would be allowed to borrow up to $17b together.
Added to the main debt pile and National’s $80b debt reduction target becomes a $97b problem.
Goldsmith would not release his figures for how he would achieve the debt target but Stuff has previously seen some draft numbers that showed National would axe NZ Super Fund contributions, cancel the fees free tertiary study policy and trim new spending by roughly $21b over 10 years to get net core Crown debt to 30 per cent by 2030.