National accuses Government of loose spending, high borrowing

Finance Minister Grant Robertson says the government books are in good shape. Photo / Mark Mitchell

The Government has been accused of spending up large without saving anything for a rainy day in the face of global economic uncertainty.

"[Finance Minister] Grant Robertson's loose and untargeted spending promises means the Government is planning to increase its borrowing by $17 billion over the next four years," National leader Simon Bridges said.

The extra debt was made up of $11b of additional core Crown debt and a further $6b in crown entity borrowing, he said.

"At the same time economic uncertainty is increasing internationally this Government is taking the opposite approach – spending up large now and hoping that the next rainy day doesn't happen under its watch. That's irresponsible.

"This is a Government that is borrowing more, taxing more and spending more. Unfortunately it has no plans for how we as a country can earn more and in the meantime it's reducing New Zealand's ability to cope with international and domestic economic shocks."

Bridges raised the Government's fees-free policy for tertiary students, the Provincial Growth Fund and the $1b announced earlier this year for Pacific aid and the Ministry of Foreign Affairs and Trade as examples of the Government's investment in the wrong areas.

Robertson said if National didn't agree with the Government increasing investment in infrastructure, then Bridges needed to say which hospitals National wouldn't fix, which classrooms it wouldn't build and which roads it wouldn't build.

"The Government's books are in good shape, as evidenced by last week's release of the monthly accounts. We are running surpluses so that we have money aside for a rainy day, and we are cutting net debt to 20 per cent of GDP within five years of taking office," Robertson said.

The Budget Responsibility Rules mean that government expenses and revenue as a proportion of the economy remain stable, and both are below 30 per cent of GDP.

"At the same time, the Coalition Government is making record investments in New Zealand's infrastructure. This includes the highest amount of capital investment for hospitals in at least 10 years - $850 million in Budget 2018," Robertson said in a statement.

Treasury released its financial statements for the 11 months to May 31 last week.

Core Crown tax revenue of $73.49b was in line with forecast. Core Crown expenses of $73.02b came in $439 million (0.6 per cent) below forecast.

The operating balance before gains and losses was a surplus of $5.228 billion in the 11 months to May –$447 million, or 9.3 per cent above the Budget forecast.

Debt was at 20.1 per cent of GDP, below the forecast of 20.4 per cent, but still close to the Government's target of 20 per cent. Core Crown net debt at the end of May was $1.8 billion lower than a year ago.