Mood of the Boardroom: Joyce v Robertson

Mood of the Boardroom breakfast. Finance Minister Steven Joyce MP and Labour Finance spokesperson Grant Robertson MP debate on stage. Photo / Michael Craig

National's Finance Minister Steven Joyce is sticking to his guns, claiming that a Labour Government would create an $11.7 billion fiscal hole despite this allegation being widely criticised since he made it two weeks ago.

Joyce faced off with Labour's finance spokesman Grant Robertson at this morning's Mood of the Boardroom debate, hosted by the Herald.

The two men vying to take control of the country's coffers after the September 23 election broadly reiterated the messages of their respective party leaders. Joyce continued Prime Minister Bill English's criticism of Labour's failure to clarify what its tax policy would be should it come to power.

Robertson rehashed Labour leader Jacinda Ardern's attack on the Government for failing to address the country's housing shortage until the "11th hour".

Perhaps the liveliest moment of the debate came when moderator Shayne Currie quizzed Joyce about his controversial allegation that Labour had an $11.7b hole in its spending plans, something that has been dismissed by both Labour and numerous financial experts.

"Yes it does [exist]," Joyce said, drawing laughs from the crowd.

"I'm very very concerned about it. I genuinely am concerned about the level of debt that a Labour Government ..."

Robertson interjected, stating he had been forced to address "two weeks of you making things up".

"Steven you have actually embarrassed yourself again this morning," he said. "We have put out a fiscal plan that has been fully costed, independently audited and not one economist in the last two weeks has backed what you have just said right now.

"For me this is Trump-like, it's fake news and it is an attempt to distract from all of the issues and the problems that we've been discussing today. You're actually making a fool out of yourself."

Joyce countered that Labour's own numbers showed the country's debt after five years would be $11.5b higher than how the economy was currently tracking.

"To believe it wouldn't be any higher than that you'd have to believe firstly that a Labour Government would spend less than a National Government, you'd have to believe that Labour would deliver two $0 budgets ... and you'd have to believe that all these proposed taxes would have no impact on the New Zealand economy," Joyce said.

"If you believe all of that then I have a very good railway company to sell you."

Shayne Currie moderates the debate between Finance Minister Steven Joyce MP and Labour Finance spokesperson Grant Robertson MP. Photo / Michael Craig

Joyce said his greatest motivation was getting small businesses to grow and succeed in New Zealand because this was the cornerstone to a good economy - the key to addressing the country's social problems.

"The rest of it, with the greatest respect to all the prognosticators, is discussion," he said. "The way you actually get people the opportunity to succeed is to provide them with the opportunities: the jobs, the incomes and the ability to bring up their families successfully."

Under National the Government had committed to investing $32.5b in infrastructure over the next four years - double what it was a decade ago.

"I think the focus has to be squarely on encouraging businesses to grow - not necessarily ones in this room although you are important - but New Zealand as a nation of small businesses," he said.

"Pretty much every single one of our businesses, except maybe Fonterra is small, so when Air New Zealand goes out there and competes on the world stage it is not a Goliath it's a minnow."

In areas of social policy, Joyce said National was to a great extent aligned with other parties, "But you have to do it from a position of economic strength".

He questioned why Labour was proposing "up to seven new taxes" when Ardern herself had acknowledged the economy was in a strong position.

Joyce also attacked Labour's promise to slash the number of new migrants, stating this would create a shortage of talent necessary for businesses to innovate and grow.

Robertson, meanwhile, emphasised Labour's focus on training and upskilling New Zealanders to do these jobs.

"We need to be around the table with the Council of Trade Unions, with [business leaders] and with employers because the one thing that I hear every single time I go out with businesses is, 'How do we increase that skill level'?"

This was where Labour's policies of three years' free post-secondary school training and restoring research and development tax credits came into play.

"We can collaborate better and cooperate better to maximise the output that we should have, to make sure we are lifting capital investment in our small businesses to make sure the opportunity is there for them to grow: ICT, advanced manufacturing, this is the future."

Practical things, too, like helping people obtain driving licenses and financial literacy skills came into Labour's policy package.

Instead of National's proposed tax cuts, Labour intended to invest in such opportunities. As well as this being the right thing to do morally and ethically, it made economic sense.

Joyce said it was not good enough for Labour to wait until after the election to tell people what extra taxes they may be lumbered with.

"I think it insults the intelligence of New Zealanders," he said.

Robertson towed the party line that Labour was merely doing what National did in 2008 when it increased GST after ruling it out prior to the election. Unlike National, though, Labour was being transparent about setting up a tax working group to see what would work best.

"The reality is from opposition it is very hard to make that policy," he said.

Robertson said an inheritance tax was "not part of our thinking" but did not rule out introducing a capital gains tax.

Joyce justified National's proposed tax cuts by saying someone on less the median wage should not be paying 30 cents on the dollar on tax.

Robertson said lifting wages not slashing taxes was the way forward, a view he said was shared by the business community.

On homelessness and child poverty, Joyce said it was important to take steps around income and job opportunities to address these issues, something the Government had made great strides on. He disputed that there was growing inequality in New Zealand.

Robertson said the starting point was housing every New Zealander and it was "not just something you do at the end of the day".

"Nine years, Steven, and you haven't done the work that needed to be done on this. You don't say, 'It's an additional add-on extra that everybody has a home', you do that at the beginning."

Robertson said under Labour there would be 50,000 "affordable homes reserved for first-home buyers" in Auckland over a decade.

"[Under National] We have built quite a lot of houses in New Zealanders but they're not affordable".

Joyce said Labour's houses would be bought up by prospectors who would "flip them" for profit. Under National, 30,000 houses were currently being built in and there would be 200,000 more built over the next six years.

The politicians also covered industrial relations, with Robertson stating Labour would work collaboratively across sectors to lift minimum standards.

Joyce questioned what this would mean in practice.

"The idea that you'd pay the same in Gore as you would in Auckland for an engineer is frankly crazy."

Robertson said it would abolish the "unfair" 90 day trial period during which new staff can be sacked without going through traditional dismissal procedures, which Joyce said would cause small businesses suffer.