Election 2020: Labour insists National has made another fiscal mistake

From RNZ

National's finance spokesman Paul Goldsmith remains defiant the party's economic plan stacks up - but has had to make another correction after using out of date figures.

The party also intends to save $60 million a year by means testing the first year of the $60 a week BestStart payment for new parents, which is currently universal.

Goldsmith says National's "estimate is that would lead to about half of the people who are getting it in the first year getting it in the second year". The party is looking at a threshold of about $90,000 for an annual household income, he says, but that would be "clarified at the appropriate time".

"The only point is that the current policy from the Government means that even the very wealthiest New Zealanders are getting this payment and we think it makes sense to target it to those who need it most, and we've got other policies such as our first 1000-days assistance to people who are starting their families."

The second and third years of BestStart are already means-tested.

Minister of Finance Grant Robertson says the National finance spokesman is 'floundering'. Photo / Warren Buckland

National has been under ongoing pressure over the economic plan it released a few weeks back - Goldsmith has already copped to the first blunder of coming up $4 billion short after using outdated figures but Labour insists the errors still represent double that.

A second $88 million error, by using Budget figures for the 10-year Existing Capital Allowance instead of the pre-election update, has now been corrected in National's online plan.

Labour says there is a second $4bn error as National has double counted transport funding.

"Paul Goldsmith is floundering," Labour's Grant Robertson says.

"He's trying to change his plan quietly in the background so he doesn't have to own up to his leader for another mistake."

Labour says National has allocated $3.9bn of transport funding under the NZ Upgrade Programme, but that money no longer exists in that programme as it was transferred by the Government at the start of this year into a more general capital fund.

It says National has also counted and allocated that money in its general capital fund - so has double counted.

Goldsmith says he doesn't "accept that at all".

"What we have is a $31 billion ambitious infrastructure plan... and it is funded by a number of different sources and all of them add up and get us to the figure that we need to have - and that's been independently verified by NZIER [New Zealand Institute of Econonic Research].

"Originally we were planning to take some money out of the Covid Fund for the infrastructure plan at the start and we've decided instead to use that for the stimulus tax cuts over the next 16 months.

"We've put more in from what's called the capital allowances over the next decade or so.

"We've also acknowledged that there was a change in the way the Government was treating its New Zealand Upgrade programme so we've taken more out of the future earnings of the National Land Transport Fund."

Robertson says it still doesn't stack up.

"He has double counted $4 billion worth of funding, meaning there are now at least $8 billion worth of mistakes in his economic plan.

"In order to cover over this he is now claiming that he would take that money out of the National Land Transport Fund to make up the difference.

"Massive mistakes like this - if National made them in government - would put the economic recovery at risk.

"Judith Collins and her team cannot be trusted to run the economy - mistakes of $4bn or $8bn are not inconsequential."

NZIER independently reviewed the original plan and in a statement says the National Party "had choices about how it presented its capital intentions".

"The challenge for all political parties is to present their proposals clearly in the face of a complex and rapidly changing fiscal environment."

The important question, it says, is "whether the National Party has presented a 'fully funded' capital programme".

"That is, can it meet its spending intentions from projected revenue, accounting for the different sources of revenue used to finance capital spending ... our assessment remains that the National Party's plan is fully funded. There is no double counting in the fiscal plan."