Greens claim they will run bigger surpluses – yeah right

The Herald reports:

Prime Minister John Key has taken a shot at Green Party co-leader Russel Norman, saying he must have been smoking dope to believe the Greens could pay off debt faster than National.

The Green Party has claimed its economic policies would pay down debt faster and get bigger surpluses, than under National. Mr Key said he knew the Greens were also keen on legalising cannabis.

“If they really believe that, maybe they’ve been trying the substance because they can’t do it.” Asked if he thought Dr Norman had been smoking weed when he put out the numbers, Mr Key said “well, if he really believes those press releases, yes. Press releases are cheap and easy. Getting back into surplus is a much more challenging issue.”

Mr Key said between them Labour and the Greens had made $28 billion worth of promises already. Even if Labour stuck to its promise to remain in surplus, it would leave no buffer if there was another disaster that impacted on the economy.

The claims they would also be fiscally restrained are laughable.

First of all Labour and Greens have condemned every measure of fiscal restraint in the last six years. We would not be on the verge of surplus if they had been Government.

Secondly it is important to understand how they are claiming they will stay within surplus. It involves the operating allowance.

The Government has allowed $1.5 billion a year of extra spending. This is cumulative. So this year is is $1.5 billion, and next year it is $3.0 billion (over two years ago) and the year after $4.5 billion. Labour and Greens say they will fund all their policies for the next three to four years from those operating allowances.

This is again not even close to credible. What Labour and Greens are implicitly saying, and you have to believe, is that if elected they will make no more spending decisions for the next three or four years. That they will not fund any new initiatives. They will not even have a Budget where they announce new spending, because what they have done is pre-allocate the allowances for the next four years.

Now if you believe that they will make no new spending commitments in the next four years. That for four years they would announce Budgets that are basically one page long and just say “No more spending” then you can believe they will run a surplus. But if you do believe that, can I also offer you this nice bridge for sale.