Finance Minister Steven Joyce has warned Labour's alternative Budget could increase New Zealand's debt - and potentially push up home loan rates when many Kiwis have big mortgages.

Joyce this morning stood by National's claims that Labour's Budget would leave a $11.7 billion shortfall when queried by Newstalk ZB's Mike Hosking.

Joyce's accusations have come under pressure from economists who have questioned the claim.

And Labour has immediately hit back at Joyce's "scaremongering", saying any claim that its fiscal plan could risk driving up home loan rates is "fake news".

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Joyce told Hosking that Labour had changed its story and would now be running a zero Budget outside of education and health for two years.

"Frankly that is just not doable."

Joyce said they would need to spend at least $900 million to $1 billion in other areas otherwise they would not be able to pay things like police wage rises.

The alternative was to borrow more or collect more in taxes.

Joyce said Labour was planning to increase debt by $8 billion but he believed it would be much more than that.

"When you add the numbers and draw away the curtains this thing doesn't stack up. It involves a lot more debt."

Joyce said New Zealanders had worked hard over the past eight years to get New Zealand's books back into surplus.

"We are now at the point where our debt is at $60 billion and falling instead of rising - and that is debt we have accumulated after the global financial crisis and Canterbury earthquakes."

Instead of increasing debt, Joyce said he believed it was important to prepare for the next rainy day.

If Labour's plans did increase debt or taxes, they needed to be upfront about it, he said.

"I don't think Kiwis would want to choose more debt at this stage of the cycle, which ultimately means higher interest rates at a time we all know people have some fairly big mortgages."

However Labour's campaign chairman Phil Twyford said Joyce was being deliberately misleading and should instead "focus on his own failing campaign."

"Every economist who has looked at his claims has debunked them. He has no credibility and it's a joke to think that anyone would take him seriously now.

"Labour's responsible and independently assessed plan will see us run surpluses every year, pay down National's debt to 20 percent of GDP by 2022."

Twyford said Labour could do this while investing in health, education, housing, police, and transport "because we have rejected National's plan for tax cuts that deliver $400m a year to the top 10 percent".

"Our plan will not affect home loan rates. Instead, it will make housing more affordable by building starter homes and selling them at cost to first home buyers.

"Mr Joyce is scaremongering because he is staring at an election defeat and he has no positive vision of his own to offer. He is running a fake news strategy and media should not blithely repeat his fictions."

ANZ economist Cameron Bagrie says Labour's Fiscal Plan is transparent and achievable.

But it would be a "massive challenge" to deliver on the numbers as presented for the 2019 and 2020 Budgets when there would be nothing left for the cost pressures on government after health and education increases.