Barbara Edmonds said the party would release policy at a later date. Photo / Marty Melville
Labour’s Barbara Edmonds says Treasury’s latest economic update shows the “Government have lost control of the economy” but repeatedly refrained from saying what her party would have done differently had it been in power.
Her leader, Chris Hipkins, was able to mention some of the “different choices” Labour would have made, like not progressing income tax cuts he says the Government needed to borrow to afford and changes to interest deductibility benefitting landlords.
Speaking to reporters after the Half-Year Economic and Fiscal Update (Hyefu) was released, Edmonds pinpointed some of the data she believed showed the economy was worsening, such as a higher unemployment forecast and ehe surplus being pushed out again.
Another piece of data in the document was the increasing level of net debt as a proportion of the country’s gross domestic product (GDP).
It’s expected to continue rising until 2028 before then reducing. But Finance Minister Nicola Willis has warned it could get worse if Labour was in power.
Edmonds said Willis “needs to look in the mirror” and “take some responsibility over” rather than blaming others.
“She needs to have a good hard look at these books and reflect on the choices that she’s made,” the Labour finance spokeswoman said.
She said the Government had “choices”, mentioning Willis’ to support different sectors like oil and gas and “property speculators”.
Considering that criticism, the Herald asked Edmonds what Labour would cut. She responded: “Today is about the Government’s books and we will set out our election policy, more of it, next year.”
She said Labour would set out its expectations for debt and the party’s fiscal plan – these usually don’t come out until a few weeks before an election – after next year’s Budget.
Edmonds didn’t answer other questions about what Labour may do differently.
For example, asked what are some immediate actions Labour would take, if it could, to improve the books, she repeated: “We’ll set out our fiscal plan in the next year.”
If Labour can’t name any actions it would take, what would its economic strategy be?
“Our economic strategy is trying to grow a New Zealand where New Zealand families want to stay here,” Edmonds said.
“At the moment, you’re going to see unemployment that’s going to increase, we’re seeing that growth has been revised down. These aren’t the good metrics of the real economy and what people are really feeling right now.”
Labour leader Hipkins was also at the press conference and was asked how much responsibility he took as a member of the former Government for increased debt, much of which amounted during the Covid-19 pandemic.
He responded: “Since Nicola Willis and Christopher Luxon took over, Government borrowing has increased, Government deficits have increased, unemployment projections have now increased, economic growth forecasts have decreased”.
“Ultimately, they need to accept responsibility for the consequences of their decisions. Constantly harking back to a Government that left office two years ago, they’ve had two rounds of Budgets, they’re now on to their third and they’re continuing to blame everyone but themselves.
“It’s time for them to accept responsibility for the decisions that they have taken.”
The Herald asked whether debt and the deficit would have increased, as Hipkins had accused the Government of causing, if Labour had been in power.
“We would have made different decisions, different choices to them,” the Labour leader said.
He listed those off as including the changes to tax brackets, which he said caused the structural deficit the Government currently faces, and “tax cuts for landlords”.
Willis has always denied needing to borrow to afford the $14.7 billion in tax relief which came into effect last year. However, borrowing has continued to increase.
The Labour Party press release on the Hyefu said the Government had “promised to grow the economy, but after two years, the economy is going backwards and this Government is too out of touch to do anything about it”.
Labour has released some election policy. It includes a fund taking the dividends of some Crown assets and redistributing them into Kiwi businesses, as well as a narrow capital gains tax, which will generate revenue to pay for GP visits for New Zealanders.
National’s Willis has been critical of the party for being unwilling to explain how it will pay for some promises, such as to reverse the pay equity changes the Government made. Labour has maintained it will release this information in its fiscal plan.
Jamie Ensor is a senior political reporter in the NZ Herald press gallery team based at Parliament. He was previously a TV reporter and digital producer in the Newshub press gallery office. He was a finalist this year for Political Journalist of the Year at the Voyager Media Awards.