National Party leader Christopher Luxon said Grant Robertson will go down as one of New Zealand's "worst finance ministers".
It comes after Treasury released its Pre-Election Economic and Fiscal Update, the last snapshot of the government's books before heading into the election next month.
Earlier today Robertson said the update showed the economy had "turned a corner" although challenges remained "very real".
“We have a solid base as we face the challenges ahead. Unemployment is forecast to remain below the long-term average of 5.8%, peaking at 5.4% before declining to 4.6% at the end of the forecast period.
“Wage growth will outpace declining inflation, meaning household budgets will stretch further.”
The Government opened its books for the last time before the election.
But today Luxon and National finance spokesperson Nicola Willis came out swinging.
Luxon said Labour’s “excessive spending” was driving economic pain and there was nothing to show for the additional spending.
“It’s not just about the numbers.
“Behind all the data… are Kiwi families [who] are facing tough choices every day.”
He said the state of New Zealand’s economy was driving Kiwis overseas.
“Grant Robertson is going to go down as one of the worst finance ministers this country has ever had.”
National finance spokesperson Nicola Willis said Labour had “left the cupboard bare”.
“The day of reckoning is now here.”
She said economic growth forecast was “lacklustre”.
Willis said National remained committed to tax cuts.
“We will mount the fiscal repair job New Zealand needs.”
'Destructive legacy' - ACT
ACT leader David Seymour said Robertson’s “destructive legacy” had been “laid bare” by the Prefu update.
“Prefu shows Labour has no plan for paying off debt, no plan for turning things around, every year forecast the country borrows more and more until we lose first world status.
"Spending by 2026 will be $11 billion higher than forecast just last year. That leads to far more borrowing than anticipated. Net debt is forecast to reach $100 billion by 2025. They’ve given up on New Zealand and New Zealanders need to give up on them.”
Seymour said more debt meant more interest, the bill forecast to be $9.2b by 2026.
"New Zealand is now spending more as a country on interest than primary and secondary school education, and twice as much as is spent on police, courts and corrections combined. Kiwis’ taxes aren’t paying for public services, they’re paying for Labour’s mismanagement.”
He said Robertson couldn’t blame the pandemic or the weather for the state of the Government’s books.
“In the past 18 months, 2026 forecasts for Crown debt have worsened by $34 billion. Operating balance before gains and losses (OBEGAL) is around $10 billion per year worse off.
“Government spending in 2026 is $11 billion greater than it was forecast to be 18 months ago, driven by the massive interest bill. The fallout from Grant Robertson’s borrowing is an anchor dragging New Zealand down.”
He said wasteful spending needed to be cut to get the government’s books “back in shape”.
“Carrying on in the current direction is a recipe for New Zealand to become a middle-income country rather than the first world nation in an island paradise that it should be.”
Green Party finance spokesperson Julie Ann Genter said Treasury’s update showed a “urgent need” to change the tax system to raise money needed to invest in public services.
“While the books are better than expected, it is completely ridiculous that both of the major parties are resigned to cutting back spending and public services instead of making the tax system fairer. This will impact lower income people most of all.”
She said a government with a “strong Green voice” would tax the wealthiest few and use that money to support everyone.
“The money we need to make life better for everyone in NZ is already there. All that’s missing is the political courage to make the tax system fair and to invest in lifting incomes.”
She said National’s plan was a “cynical ploy” to “do the absolute least for middle income earners” to “get away with tax cuts for the wealthiest few”.
Interest groups' views mixed
Council of Trade Unions (CTU) economist and director of policy Craig Renney said Prefu data showed a resilient economy but one with long-term challenges that needed to be addressed.
The CTU recently courted controversy for an advertising campaign showing an unflattering image of Luxon that said he was “out of touch”.
Renney said Treasury forecasts showed government debt would continue to be low by international standards and unemployment would be lower in the long run.
He said while it was pleasing to see growth returning to the economy it was important the benefits of that growth was “equally shared”.
“That means making sure that the government is continuing to invest in essential public services [and] making sure benefits and pensions rise in line with wages rather than with inflation.”
He said maintaining fiscal control was important but shouldn't come at the cost of “leaving the most vulnerable New Zealanders behind”.
BusinessNZ chief executive Kirk Hope said Prefu sent a message to all political parties about the dangers of undisciplined government spending.
He said it showed a significant deterioration in the government’s accounts.
While Covid and cyclones had contributed to the deficit and the high inflation rate, the core of the problem lay with big government spending, he said.
"Natural disasters are not an excuse for poor financial management. New Zealand is prone to natural disasters, and we shouldn’t continue with deficit spending, because the next one-off event could significantly destabilise the economy.”
Hope said political parties should refrain from “big spending promises” on the campaign trail.
"Business voters are more interested in hearing promises about controlling expenditure and growing the economy, and want to see sound analysis of expenditure and regulatory plans to help get back into surplus faster."
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