- Date published:
12:31 pm, August 11th, 2014 - 13 comments
Categories: debt / deficit, Economy, election 2014, labour, national, same old national, Steven Joyce, treasury - Tags: fiscal plan, polity, revenue, surplus
Over the weekend, Steven “Mr Angry” Joyce put out a press release saying:
A desperate Labour Party is making promises the country simply couldn’t afford as it tries to buy its way into contention at the election, Associate Finance Minister Steven Joyce says.
“We are hardly out of the starting blocks for this election campaign and the Labour Party has given up any remaining sense of fiscal responsibility,”
This is the same “ohmigod ohmigod there’s an $X billion hole!” line National ran in 2011. (Free advice for Steven: Never run the same gag twice.)
But it is 2014 now, and the charge of “the country can’t afford it” is a steaming pile of crap:
First, more than half of the money National is moaning about is money National had budgeted to spend anyway. So there’s a $ 9 billion distinction there that Joyce is plain making up. (Free advice for Steven: The Jedi mind trick does not work when you are not a Jedi.)
Second, the rest of the money is entirely affordable. The exact same documents (pdf) National plucks the spending figures from also detail the added revenue Labour will gain to offset the spending. That is what things like a Capital Gains Tax and changes to one of the income tax rates are for. So the extra spending over four years is more than matched by extra revenue. The fact that Joyce had nothing he wanted to say about those revenue projections shows how solid they are.
New Zealanders do face a choice this election, but that choice has nothing to do with fiscal prudence or debt reduction. We’ll get those either way.
Labour will pay down debt as fast National. It will run surpasses the same size as National. Everything Labour wants to do is paid for, and we are back in surplus.
The choice New Zealanders face is whether a CGT and other small tax changes are a good trade-off for:
For my money, that is a good bargain for New Zealand.