Labour attempted to put some distance between itself and National over the weekend, announcing a $6.2 billion capital injection into public housing, which it says will deliver 6,000 new public housing sites.
The party’s housing spokeswoman Megan Woods said the promise would mean Labour would have delivered 27,000 new public housing sites since getting into office.
“In just six years, we’ve delivered over 13,000 public homes, the most of any government since the 1950s. We’ve also added over 4000 transitional homes. We are on track to deliver 21,000 public and transitional homes by 2025, and there is more to come.
“If re-elected, we’ll deliver another 6000 public homes by 2027,” Woods said.
National’s housing spokesman Chris Bishop said National would not be matching the policy. National had matched prior Government commitments on housing, including the most recent Budget promise, funding for an additional 3000 places and allowing funding for the public housing build programme to June 2025.
“Because we want to give confidence to the market, in particular in a time of a construction downturn, we have committed to the 2024 and 2025 places,” Bishop said.
He said National would continue to build public housing after 2025, but would not commit to a funding mix beyond that date, saying he wanted to “sort out Kāinga Ora first”.
Bishop said the Government’s housing agency Kāinga Ora was a “financial basket case”, noting that on these numbers, it was costing the agency more than $1m to build each place.
Labour said the new policy would include building new homes and bringing existing homes into the stock of public homes, something National is less keen on because it does not add to the overall stock of housing.
The announcement came as the election enters one of its most crucial weeks. Voting opens for people overseas and some people with disabilities on Wednesday, and advance voting opens to all next Monday.
The next few days are crucial in setting the tone as people head to the polls. Both parties intend to release their fiscal plans this week, showing how they plan to manage the books.
Labour leader Chris Hipkins, finding some fire in the last week of the campaign, told a crowd of supporters gathered in Wellington National’s likely finance minister Nicola Willis was planning “layoffs before Christmas” in a post-election mini-Budget.
National has promised to find about half a billion dollars of backroom savings to fund its tax plan. These are in addition to savings of half a billion dollars of backroom savings announced by the Government in August.
Hipkins said it would not be possible for National to deliver these promised spending cuts without cutting into front-line services.
Hipkins used the example of the Department of Conservation (DoC).
“Even if National got rid of DoC’s entire policy function, all their communications staff and stopped all advertising and public communications, they’d still fall nearly $40m short,” Hipkins said.
He then said that National’s spending target for IRD would require it to look at cutting “investigations and audits into tax avoidance”.
This pricked the ears of a member of the audience who yelled out, “Funny, that!”, to muted laughter.
With early voting starting soon, both major parties have announced nearly all of their policy and will now present their fiscal plans, showing how they add up and what they would do to the Government’s finances.
Both parties are running out of money to allocate unless they want to borrow more. National, which had hugged Labour on public housing policy, likely could not afford the significant operating commitment of Sunday’s policy, which totalled $765m over four years.
Likewise, National has opted to make savings by confirming it would index benefit increases (apart from superannuation) to CPI inflation, rather than wages. This will cost people receiving the main Jobseeker rates about $40 a week by the end of the four-year forecast period, but save the Government money. Labour, the Greens, and Act are not in favour of such a change.
Funding is very tight, as evinced by the fact National’s finance spokeswoman conceded the party’s fiscal plan would not return the books to surplus earlier than 2027, when Treasury forecasts the Government books will finally be in black.
That means 2023 will be a rare election when Labour, National and even Act all promise to return the books to surplus in the same year. Even Act’s more forceful cuts, which include getting rid of entire departments, could not get the books to surplus earlier than 2027, although they did show a larger surplus than forecast that year.
Willis nevertheless said she would get the books to surplus faster than Labour because she did not believe Labour’s pledge that it would deliver smaller budgets next term, when measured by new spending, than it had delivered in the past term of government.
“Labour are expecting you to believe that they will deliver a surplus in 2027,” Willis said during TVNZ’s Q+A finance debate.
“That’s based on Grant [Robertson], for the first time in his entire time as a finance minister, sticking to his operating allowances.
“He’s not going to do that - he’s already delayed surplus three times,” she said.