Labour has made what it says are "minor" changes to its fiscal plan in response to the softer economic outlook and lower Crown revenue forecasts outlined in last week's Pre-election Economic and Fiscal Update (Prefu).
However that amounts to cuts in spending of $300 million a year from what Labour proposed in its original plan and has seen a handful of yet to be announced policies axed. In a further trimming of its spending plans Labour is no longer planning to adjust for inflation the approximately $1 billion a year in spending increases it earmarked to keep pace with rising costs in core Government services including health and education.
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Finance spokesman David Parker said Labour had also adjusted its revenue forecasts inline with the softer economic outlook.
Leader David Cunliffe said Labour had retained all of its significant commitments including policies intended to help boost and diversify economic activity. Given the deterioration in commodity prices including those for dairy and logs that had prompted the revisions outlined in the Prefu,"this investment is absolutely critical".Among policy changes were the delay by six months of the introduction of free doctors visits and prescriptions for over 65s. Cunliffe said Labour was announcing its changes because"we want to be upfront with the public".
