Labour fiscal 'strategy' shows they learned nothing from COVID

The Taxpayers’ Union is slamming Labour’s fiscal strategy of locking-in Covid-era levels of government spending as 'fiscal and economic sabotage'.

Responding to Barbara Edmond's "fiscal strategy" Taxpayers’ Union Executive Director, Jordan Williams, said:

“Labour's pledge to keep core Crown expenses around 33 percent of GDP is a recipe for New Zealand to be poor. It barely retreats from Covid-era levels and would make New Zealand extremely vulnerable to the next economic shock. Inherently, big spending governments means a small productive sector and a poorer New Zealand."

"Today's announcement means that Labour is going to need to pull a rabbit from its hat to get the numbers to work. You can't say you're going to balance the books, not cut spending, but claim your only new tax is a 'targeted' capital gains tax that won't raise material amounts in the short term."

On Labour's promise to return the Reserve Bank to a dual mandate, Mr Williams said:

"Arguing monetary policy can sustainably create jobs is Muldoon-era thinking. Giving the Bank two competing objectives gives it somewhere to point the finger when inflation gets out of control. Again, have these people learned nothing from Covid? Price stability is the Reserve Bank’s job. Creating the conditions for jobs and growth is Parliament’s.”

"While Labour's fiscal strategy is bad news, at least Edmonds gets the institutional stuff right with her backing of an independent Parliamentary Budget Office and a return to the conventional OBEGAL measure. The Taxpayers' Union has long supported independent costings of election promises and previously slammed OBEGALx as a fiscal-fudge."