Serial economics paper failer Steven Joyce is not backing down from his claims that there is an $11.7 billion hole in Labour’s fiscals. Even though pretty well everyone in the country who has a qualification in economics disagree.
From Radio New Zealand:
National campaign manager Steven Joyce is doubling down on his attack on Labour’s alternative budget, despite a series of economists saying he’s wrong.
Mr Joyce yesterday claimed Labour had mistakenly not accounted for rolling out operational allowances year on year.
Labour said the figures were robust and the claim was a cynical attempt to distract voters.
Mr Joyce insisted today that outside of laying down its spending on health and education, Labour had left no allocation for increased spending in any other area of government.
“Either they’ve mucked up the allowances and it’s an $11.7 billion hole, or they’ve just ignored the expenditure they’d have to make over the next four years – which is also an $11.7 billion hole.”
He said Labour’s figures would mean a two-year freeze on most government expenditure, with no new money for things like funding for the new Ministry of Vulnerable Children.
Mr Joyce reiterated his criticism on Checkpoint with John Campbell this evening.
“Forget who’s saying what, it’s not a vote as to whether these numbers are here. They are either accurate or they’re not.”
So has Labour left no allocation for increased spending in any other area of Government and will the figures impose a two year freeze on most government expenditure?
Well let’s have a look at Labour’s figures:
And here is the similar table (slightly altered) from PREFU. PREFU only goes up to 2021.
Note there are significant increases in Health, Education and Social Welfare.
But is there a freeze in other areas? Clearly not. The figures in the other line items either match PREFU (National’s figures) or in areas like Law and Order exceed PREFU. I presume the wage costs of the extra police is the cause for this particular increase.
One line that is not repeated from PREFU in Labour’s figures is the line “Forecast new operating expenditure” and the sum of this line over the 4 years is $11.7 billion. Presumably this is where Joyce’s claimed budget hole figure comes from. But Labour’s explanation is that the cost of the new policies have been added into the individual line items and clearly there are significant increases planned in the major areas of Government activity.
And Labour has a new line “Operational allowance” totalling $7.5 billion which I understand is residual cash set aside for wage increases and new policies. And note again Labour has used PREFU figures. If Labour has made no allowance for these items then neither has National.
Joyce is spinning furiously now and talking about how there is still a hole in Labour’s figures and how the spare cash is not sufficient to fund new policies and spends. But his attempted hit on Labour has misfired spectacularly. And it displays either an inability to understand the figures or a complete indifference to telling the truth or both.
If National lose this election then the actions of Steven Joyce, in blowing up the party’s reputation as financial geniuses, will play a large part in this. I suspect the retribution will be swift and brutal.
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