- Date published:
9:36 am, September 26th, 2020 - 23 comments
Categories: election 2020, Judith Collins, making shit up, national, paul goldsmith, same old national, spin, you couldn't make this shit up - Tags:
If ever you needed a symbol of National’s current plight it is the handling of the release of its alternative budget.
It has been a complete and utter shambles. A clusterf&*k of epic proportions. A week in and they are still being hammered about it. Because if there is one part of National’s reputation that needs to be defended at all costs it is the perception that they are competent financial managers and making multiple billion dollar mistakes in your alternative budget at election time is the one thing over all else that will hurt that part of your reputation.
The first mistake that emerged was a doozy, overestimating the savings from cutting contributions to the Cullen Fund by $4 billion. I earlier posted this:
It appears that Paul Goldsmith, financial spokesperson for the party that prides itself on its ability with finances, has made a rather large miscalculation.
When creating National’s budget he anticipated that stopping contributions to the Cullen fund would “save” the Government $19 billion dollars. I put “save” in parentheses because it will actually cost the Government and the country long term but that is a topic for a different day.
But the actual figure was $15 billion, so National had banked on $4 billion in savings that it was not going to get.
More mistakes appeared. National used the wrong figures for its capital allowance and faced another hole of $88 million that had to be filled.
Then it transpired that National had double counted a $3.9 billion contribution from the National Land Transport Fund. Its solution was to just say that the NLTF would have to pay this sum twice. What fiscal geniuses National has. Imagine being able to get funding this way by drawing twice on a fund in the future even though you have no idea if it will be able to afford this.
But things became worse yesterday. Clint Smith who has done some great analysis on the subject noticed another hole.
There is *another* $2b error in National's Alternative Budget, bringing the total errors found so far to $10b
You see, the SuperFund is the country's largest taxpayer. The less money you put into it, the less profit it makes & less tax it pays
National forgot/didn't know this..
— Clint Smith (@ClintVSmith) September 24, 2020
Surely that was the end of it. Surely this was the last mistake and after patching up its budget National could then get on with campaigning.
Well hold my beer.
Thomas Coughlan at Stuff has reported on how National and NZIER, who did the checking on the figures, both agree to stand behind the budget, but the budgets they were standing behind have different figures in them.
The National Party and the economic agency used to vet its figures are now using different numbers to explain how the National Party’s alternative budget stack up.
Both National and NZIER stand by the alternative budget, but they stand by alternative versions of it, with each version containing different numbers.
In the space of just eight hours, Paul Goldsmith and NZIER have given two different versions of how the numbers added up – both have issued corrections of sorts following enquiries from Stuff.
National has been fighting allegations that its numbers don’t add up after it was discovered that their alternative budget included $3.9b from the NZ Upgrade Programme.
That programme no longer exists, with what was left of it rolled into the main government capital account in May.
The party has since said that it will find the money by raiding NZTA’s National Land Transport Fund (NLTF) for another $3.9b, cutting spending from some transport projects to make the numbers work.
This is the version of the budget that has existed since Tuesday.
But Goldsmith changed his tune on RNZ this morning, stating that he’d be funding the $3.9b through an increase to the capital allowance – the pot of money allocated in each new budget.
“We’ve also shifted – because the Government allocated the spare money from that upgrade fund into the capital allowances – we’ve increased our capital allowances,” Goldsmith said.
But Stuff later clarified with Goldsmith that the $3.9b would still be coming from the NLTF, not the capital allowance as he told RNZ.
“It’s no different to what’s been said over the last few days. We’ll be taking it from the NLTF,” Goldsmith told Stuff.
Stuff confirmed with Goldsmith this would mean a little over $10b being cut from some transport projects in the $48b NLTF and given to others.
This had clearly not been communicated to NZIER, the agency that vetted National’s numbers to make sure they added up.
Stuff has been trying for two days to get the agency to stick by its figures – and only received a response late this afternoon from Peter Wilson, the NZIER economist who vetted the National plan.
Wilson’s response backed the original budget: $6.3b would come from the NLTF, not the $10.2 National now claims.
National cannot have it both ways. Either its debt reduction figures are correct and there is a large hole the size of half of Auckland’s third harbour crossing in it. Or its debt reduction figures are wrong and we have to borrow more. Or it should cancel its tax cuts because remarkably they are similar in size to the latest discovered hole.
Despite National’s hope we do not notice we certainly cannot have our cake and eat it as well.
The one thing that is certain is that we should not trust National with running a cake stall. Let alone running the country’s finances.