Treasury’s briefing to Bill English as the new Minister of Finance must’ve pissed him off big time. Aside from the expected ideological burp (already covered in depth by No Right Turn) it reads like a long list of Labour achievements and calls on National is reign in its irresponsible promises. Here’s a taste of some of the key points of the current state, and what’s neeeded:
– Past macroeconomic policies have put New Zealand in a reasonably strong positions to weather economic shocks.
– Significant fiscal stimulus is already in train.
– Maintain a level of government savings which overall keeps gross debt at around 20%.
– Moderate expenditure growth in key spending areas, such as health and justice.
Treasury is saying to the National/ACT government, hold on – Labour’s tax cuts are the right amount of fiscal stimulus. Hold off on National’s plan, it’s an irresponsible step too far. Labour over nine years has reduced debt, put NZ in a fiscally sound position, increased savings through KiwiSaver and the Cullen fund. By turning their back on all those things, National and ACT are putting all this at risk. All we can do now is hold our breath and see how bad it gets.