A re-elected National Government will commit to three Budget Responsibility Rules to protect the economy so New Zealanders have more opportunities, higher wages and quality public services, National’s Finance spokesperson Nicola Willis says.
“It’s been a tough few years for New Zealanders, with our economy experiencing the impacts of global shocks and profligate spending by the previous government that drove inflation and interest rates to generational highs,” Ms Willis says.
“The debt we inherited from Labour had doubled as a proportion of GDP, leaving our Government with debt servicing costs currently more than $9 billion a year.
“That is roughly the equivalent of the annual expense cost for Defence, Police, Corrections and Customs combined. It is $9 billion a year that could otherwise be spent on upgrading more hospitals, building more schools and hiring more police.
“Since taking office, National has continued to demonstrate the responsible economic and fiscal management needed to turn the economy around.
“Our economic recovery is now underway, even amid a global oil crisis driven by the conflict in the Middle East. But it would be put at great risk with more spending, more taxes and more borrowing, which is what Labour is planning.
“Credible and consistent fiscal policy matters now more than ever. That’s why, if re-elected, National will commit to three Budget Responsibility Rules.”
- Prioritising a return to surplus in 2028/29, and staying in surplus over time, sufficient to see the debt curve bend down.
- Bending debt down below 40 per cent of GDP, and maintaining debt below that level over time.
- Keeping taxes low by right-sizing government, with core Crown expenditure as a share of the economy declining towards 30 per cent of GDP.
“These rules reflect a more volatile world, where the cost of borrowing has risen sharply and international ratings agencies are watching New Zealand’s books closely,” Ms Willis says.
“As a small, commodity-exporting country a long way from anywhere, without a deep pool of domestic savings to fall back on, New Zealand carries more risk than bigger countries when the next earthquake, pandemic or global shock hits.
“That is why these rules are so important for any Government. The only way to be ready for the next crisis is to get our books in order now, while conditions allow it.
“National’s approach is in direct contrast to that of Labour. New Zealand saw the Labour Government’s response to the Covid crisis, which was to significantly ramp up spending and that ultimately created a whole new crisis with the cost of living.
“Labour has not learned from this, proposing more spending which will require more taxes and more borrowing. That is before we add in their coalition partners who are all proposing more spending, more taxes and more borrowing.
“The challenge that should be put to Labour is whether it will commit to the same Budget Responsibility Rules that National is committing to – and if not, why not?
“These rules are about more than just preparing for the next crisis. They’re also about building a stronger economy where New Zealanders have more jobs and opportunities, and wages rise faster than prices so that life is more affordable.
“The contrast is clear at this year’s election. A National Government with a long-term plan to grow the economy, create jobs and lift wages. Or Labour-Greens-Te Pati Māori-TOP coalition that would spend more, tax more and borrow more.”
