Joyce on Labour’s projected deficit

Steven Joyce writes:

The Government’s half-yearly update this week shows that by 2022 they’ll have collected at least $10 billion more tax than was predicted by Treasury before the last election.

Unfortunately, they are spending it even faster. The amount they are going to spend across the four years to 2022, according to official government numbers, is now $19b more than was in their own fiscal plan prior to the election. Alert readers will recall much wailing and gnashing of teeth when someone had the temerity to suggest they would spend $11b more than their own plan. We are now well past that point.  

Yep Labour have blown out their own fiscal plan by $19 billion – twice what Joyce pointed out was the likely hole.

Debt is now predicted to top out at $78b, as against the $68b they predicted at election time two years ago, and an expected surplus of $6b for the current year is now projected to be a deficit.

And this deficit isn’t due to the extra infrastructure spending announced a few weeks ago – that won’t impact the surplus for years. The deficit is purely runaway expenditure.

All the key performance indicators that measure the effectiveness of government spending are currently going backwards. State Housing wait lists, poverty numbers and numbers on welfare are all growing. The big hospital metrics like emergency wait times and elective surgery numbers are deteriorating. The performance of our kids in school relative to the rest of the world is continuing to decline, and tertiary enrolments are down despite a year’s free tuition. There has also been no discernible economic uplift in regional New Zealand to match the government’s fine rhetoric, beyond what was already occurring.

Poverty up. Homelessness up. Welfare up. Emissions up. Hospital waiting times up.

Let’s be under no illusion as to how quickly the infrastructure pipeline has been run down. There are currently eleven major roading projects, all started before 2017, that are building 120km of new and upgraded four lane highways around this country. Nine of them are due to finish before the end of next year.  

From that point in time there is literally nothing, no large new road projects, rail projects, or anything else to replace them.

Hence the panicked announcement.