Luxon’s ‘no new debt’ pledge on fuel support is the right call

The Taxpayers’ Union is welcoming Prime Minister Christopher Luxon’s commitment that today’s fuel support package must not drive government debt higher.

“At a time when the books are already under strain, this is a welcome sign of discipline,” Taxpayers’ Union spokesperson Tory Relf said. “It shows the Government now understands that every extra dollar of debt is tomorrow’s tax bill.”

"The PM's comments indicate tomorrow's announcement is fiscally neutral. That means that at least equal reductions in spending will be specified to go along with the support package."

“Helping Kiwis with targeted and temporary measures during this crisis is sensible, but only if it’s paid for. Government debt is already at $140,000 for every Kiwi household, as tracked by the National Debt Clock. Shifting the cost onto future taxpayers would just kick the can down the road."

"Any increase in debt is counterproductive. It will drive up inflation and the costs of borrowing."

"As Friday's warning from Fitch shows, New Zealand enters this crisis in a vulnerable state. Despite political rhetoric about 'saving money' the Government's running a larger structural deficit now, than when it assumed office."

"Borrowing more right now would be to adopt a Grant Robertson-style response. Even if on a smaller scale, that would be a grave mistake. We welcome Mr. Luxon's approach."

“Fiscal neutrality means real trade-offs and tough choices. But there is no longer the option to borrow and hope.”