Labour fronted up with numbers on its ambitious economic plan yesterday but appeared to make a $400 million blunder by overstating the dividend revenue it would retain along with the state-owned enterprises National would partially sell.

The overstated revenue comes on top of a major political row over whether the $6 billion Labour would borrow to restart NZ Super Fund contributions should be added to the Crown's net debt.

Labour leader Phil Goff said that over the four years to 2017 borrowing by a Government he led would be $4 billion higher than current Treasury forecasts.

Mr Goff and his finance spokesmen David Cunliffe and David Parker have pitched their plan for a capital gains tax, higher taxes for top earners and a "tax-free zone" for the first $5000 of income as part of a viable alternative to National's partial asset sale plan.


The credibility of the numbers behind Labour's plan became an important election issue after Prime Minister John Key goaded Mr Goff about them during a debate this week. Mr Goff said from 2017/2018 a Labour Government would be paying back debt faster than National "'because of the ongoing asset returns and the increasing revenue of our fairer tax package".

Associate finance spokesman Mr Parker led Labour's defence against National's claim of a $17 billion hole in the numbers.

National's own figures, against which Labour's were being compared, had not factored in lost dividends from selling up to half of state-owned enterprises, "despite it standing out like dog's balls", he said.

"You can't sell an asset and pretend you're still going to get the revenue ... Within four years that's half a billion dollars."

Labour's figures show it expects to receive ordinary and special dividends from the SOEs of just over $845 million in the next financial year, rising to $1.2 billion four years later. Under National's plan to sell up to 49 per cent of the state-owned energy companies, that cashflow would be halved.

But Labour drew its figures from Treasury numbers released two weeks ago for interest revenue and dividends for state-owned enterprises. Through a spokesman, Finance Minister Bill English said those figures referred to total interest and dividends received by all SOEs including Kiwibank.

A Treasury spokesman said was the case, and the figures used by Labour were "not the same as disposable income available for the Government to spend on its priorities".

Mr English's spokesman said Labour's estimate of $868 million in dividends forgone under the"mixed ownership model" over four years was therefore wrong.


"The actual figure in terms of dividends is $390 million over four years, about half of Labour's number."

Labour finance spokesman David Cunliffe defended the numbers as "the only dividend returns available in the prefu [pre-election economic and fiscal update] and historically they have tracked very close to the average annual cumulative returns and thereby were deemed to be a good proxy".

Meanwhile, Mr Parker also said National had "tried to ping us" for resumed NZ Super Fund contributions by adding $6 billion to the net debt tally under a Labour Government.

"They've ignored the asset it purchases, how fair is that?"

Mr Key said that was the same as saying "if you have a mortgage against your home, that [debt] doesn't count and the day you buy the house, you should book the profits of what you think you might be able to sell the house for some time in the never-never".

"He's wanting New Zealanders to believe that's real, at a time where we're living through the most volatile financial markets and stock markets in the world."

Mr Cunliffe said it was "absolutely appropriate" to calculate net Crown debt including the Super Fund assets, "as they always were under the last Government".