It appears that Steven Joyce’s claim of a multi billion dollar hole in the Government’s finances may have been true after all.
Just that it was $14 billion in health spending. And $20 billion in defence. And it was in National’s own forecasts.
From Politik:
The former Finance Minister Steven Joyce made no financial allowance for National’s $20 billion defence re-equipment programme and says it was possible his Government might not have replaced the Orion maritime surveillance aircraft because of the cost.
Because of this the new Government is to review the $20 billion programme which was unveiled with much fanfare last year.
But the National Government never accurately costed it and made no provision in any of its long-term forecasts to pay for it.
No allowance was made in the capital spending forecasts of the Pre-election Economic and Fiscal Update for the procurement programme.
This has left Labour facing a multi-billion dollar hit to its budgets each year over the next 13 years if it decides to go ahead with the programme which apart from replacing the Orions calls for replacing the Hercules and 757 transport aircraft and the Navy’s frigates.
The money would come from the capital investment account which means it will not directly impact on Government operating expenses but rather its impact would be on Government borrowing.
The matter is now urgent because New Zealand’s option to purchase four P8 Poseidon maritime patrol aircraft expires next March.
Under Treasury accounting rules, purchases must be booked when the purchase is confirmed.
They are estimated to cost $2.2 billion.
The next time National lectures the left on fiscal discipline remind them that the Government’s debt went up by over $50 billion during nine long years of National’s reign.
And that it appears Steven Joyce would not recognise a fiscal hole if he buried himself in one.
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