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NZ Herald
2 hours ago
- Business
- NZ Herald
Almighty debt fight in Parliament, as Nicola Willis accuses Chris Hipkins and Chlöe Swarbrick of fiscal vandalism
'That is Fitch telling us that borrowing a lot more, as Opposition parties are proposing, would lead to a credit downgrade. 'That would increase the cost of government debt and also have a flow-on effect to the cost of household and business borrowing, as New Zealand would be seen as a more risky country to lend to,' Willis said. Labour has not released a fiscal plan, which would detail how much taxing, spending, and borrowing the party plans if it wins the next election. Hipkins has previously spoken about the need to borrow to invest in infrastructure. On Tuesday, he said, when asked by the Herald, that his party's fiscal plan would chart a path back to surplus. The Green Party has released a fiscal plan that includes $99.1 billion in additional revenue made up of about $89b in new taxation and the rest in climate taxes. The plan also includes additional borrowing for capital investment and a higher deficit in the last year of the forecast period. Finance Minister Nicola Willis during her standup at the Prime Minister's usual spot, hit out at Labour and the Greens. Photo / Mark Mitchell Under their plan, net debt would be about $44b higher at the end of the forecast period, a sum equivalent to just under 10% of GDP. Fitch's commentary, calling for a return to surplus and a reduction in debt levels to keep the current credit rating, is inconsistent with the Greens' plan, which ends up with more debt and a larger deficit. However, Swarbrick said Fitch's broader social and growth analysis might be more aligned with the Greens'. In general, Fitch noted that both National and Labour Governments had brought the books back into balance after an economic shock. The agency, warned, however, that recent experience had seen surpluses delayed and this could be a problem. 'Evidence of a weakening in the culture of fiscal responsibility would affect creditworthiness,' the commentary said. Willis said Hipkins had laid his 'stake in the ground' and that Labour was 'prepared to walk away' from a 'culture of fiscal responsibility'. 'Every New Zealander will pay the price if a Labour-Greens Government puts our fiscal reputation at risk,' Willis said. 'Team of vandals' - Willis Willis said Hipkins had departed from the 'orthodoxy' of previous Labour finance ministers like Michael Cullen. 'This is an altogether different path in which he seems to be walking a lot closer to Chlöe Swarbrick and her team of vandals, who want to gaslight New Zealanders into believing that if we just spent more and borrow more, everything would be better,' Willis said. 'Michael Cullen would never allow for the fiscally reckless approach that Chris Hipkins has been signalling,' Willis said. Hipkins, heading into his own caucus meeting, said Willis's attack had more to do with the Government wanting to divert attention from a sluggish economy. He said it was 'important that the Government balances its budget'. 'I notice that Nicola Willis has yet to do that. She'll be on to her third budget next year and there's not a surplus in sight,' Hipkins said. Hipkins promised that Labour would set its own fiscal rules in its pre-election fiscal plan, but he confirmed that these would include a return to surplus. 'We do need to get the books back into surplus. No government should be aiming to indefinitely run deficits,' Hipkins said. When asked whether one of the rules would be returning to surplus at some time, he said: 'Get the books back into surplus – yes.' Fiscal plans, which function like a draft budget for a political party, are not typically released until much closer to an election. Labour says its tax policy is coming later this year. Labour's last Budget included a primary fiscal rule 'returning the operating balance before gains and losses (OBEGAL) to a surplus and aiming for small surpluses thereafter'. 'This is vintage National Party, when they're in a hole, and they're in a very big hole at the moment, start throwing mud at the Labour Party, but the reality is their hole is getting deeper, they need to work out how to get themselves out of a hole without worrying about other political parties.' New Zealand's AA+ rating with Fitch dates back to 2022. Photo / Mark Mitchell Swarbrick hit back at Willis saying that 'when these made-up economic metrics, the likes of GDP, are superseding our focus on the wellbeing of people and planet, we've kind of lost the plot'. Swarbrick said that ratings agencies actually took a 'more sophisticated approach' in assessing the Government's finances than the Treasury. Swarbrick said, 'Luxon and Willis' decisions have seen productivity growth flatline, skilled workers deserting the country and deteriorating infrastructure placed under ever more pressure. 'Ironically, financial markets have a clearer grasp of fiscal responsibility than the Minister of Finance. They reward countries that successfully build economic resilience and punish those weakened by the chronic underinvestment favoured by Willis,' she said. Pointing to Fitch's concerns about the housing market and unemployment, Swarbrick said, 'The Government's decisions to withdraw public investment, in turn generating higher household debt and simultaneously increasing unemployment, is very bad for financial stability and debt-servicing.' New Zealand is one of just 12 countries to have a AA+ or AAA rating from Fitch. The current rating was obtained in 2022, under the last Labour Government and Finance Minister Grant Robertson. New Zealand had been downgraded to AA after the financial crisis and the Christchurch Earthquake In its commentary on that decision, and subsequent reviews, Fitch has stressed that forecasts show a 'fiscal consolidation', in which the Government runs a surplus and debt declines as a percentage of the GDP. National misses election surplus promise, Labour won't say it would have cut spending had it won election At the 2023 election, both National and Labour ran on fiscal plans that showed a surplus in 2027. National promised to reduce the amount of new spending each year by a cumulative $3.3b, meaning its 2027 surplus and subsequent surpluses were slightly larger than Labour's. Beginning in 2022, the Treasury began slashing its economic growth and tax revenue forecasts. This continued in the months after the election, when new forecasts showed the surplus shrinking, and has persisted to 2025. The result of this has been lower revenue than expected, pushing the forecast surplus out into the future. This has meant that despite Willis reducing spending growth, on balance, by far more than her fiscal plan promised in 2023, the deficit and overall borrowing levels are far higher. The Treasury reckons this year's deficit will be $15.6 billion, more than 10 times larger than the $1b deficit National promised on the campaign trial. Labour promised an even larger deficit of $1.5b. Given changes to GDP and revenue projections, that deficit would have increased too. On current forecasts, a surplus, by the traditional measure, is not forecast until the early 2030s. National and Labour are scrapping over how to fix the mess. Willis, noting the Government's large deficit, refuses to spend even more on stimulus, which some hope would speed an economic recovery, ultimately restoring the books in the process. Hipkins, on the other hand, refused to say he would have cut spending to keep to his fiscal promises, had he won the election. Willis rebuffed calls for more spending to stimulate the economy, saying that this spending would be 'the end of interest rate reductions'. 'Treasury has affirmed the best way to stimulate an economy in a downturn is through monetary policy ... I am concerned that without dropping interest rates we won't see the revival we all wish to see in the construction sector, our business sector, all of the private industries that rely on being able to borrow to generate the growth that New Zealanders want to see,' Willis said. Meanwhile Hipkins, would not say whether he would have dropped his spending and borrowing commitments had he won the election. Labour's 2023 plan included just over $3b more borrowing than National's. Hipkins did not definitively say he would have made cuts in light of the deteriorating finances. 'What I indicated before the election would have been our priorities, which was looking at how you get more effective spending. 'Take health, more money on preventative healthcare, like free prescriptions and making doctors' visits more accessible has the potential to save money, because you end up with fewer people in emergency departments,' he said. Asked whether Labour would have cut its cloth had it won in 2023, Hipkins said, 'We need to accept Nicola Willis has made this worse. Increasing unemployment is at least in part because of the decisions that this Government has taken. 'If I look at areas where I wouldn't have wanted to spend extra money, I wouldn't have wanted to spend extra money on Jobseeker benefits. I would have rather kept Kiwis in work.'
The Spinoff
31-07-2025
- Politics
- The Spinoff
Echo Chamber: The interminable rage of Chlöe Swarbrick
The exasperated Greens co-leader reached the end of her tether as parliament debated nurses' pay, homelessness, Palestinian statehood and voting rights. Echo Chamber is The Spinoff's dispatch from the press gallery, recapping sessions in the House. Columns are written by politics reporter Lyric Waiwiri-Smith and Wellington editor Joel MacManus. No one could ever accuse Green Party co-leader Chlöe Swarbrick of not caring about her job. The Auckland Central MP, who was first elected to parliament at the age of 23, has always had a passionate sense of justice. In many ways, that's her superpower. But also… damn, try not to give yourself a heart attack. Caring deeply about things is hard work, and Swarbrick cares about a lot of things. It looks exhausting. No MP puts more energetic fury into question time than Swarbrick – and she reached peak exasperation in Wednesday's session. She shouted constant commentary at government ministers, righteous outrage boiling in her blood and steaming out of her ears. Things kicked off with Marama Davidson asking the prime minister why Te Whatu Ora hired only 45% of nursing graduates, even though 16 health districts were understaffed. 'Well, I'd just say they are all understaffed today,' Christopher Luxon replied. 'Excuse me??' Swarbrick interjected. Luxon continued, emphasising that nurses' pay had increased by 74% since 2011. 'But what have you done?' Swarbrick shouted. Davidson asked when the government would recognise Palestinian statehood, and Luxon replied with some generic words about diplomacy and dialogue and making sure Hamas releases hostages. 'You know the hostages have been offered back,' Swarbrick chirped, leaning back against the keffiyeh on her chair. When it was Swarbrick's turn to take the stand, she grilled Luxon on Auckland Council data that showed a 90% increase in rough sleeping since the government's changes to emergency housing. She asked whether he could come to Auckland Central and 'meet the people that he has made homeless'. Luxon pivoted to blaming the 'previous Labour-Greens government [when] homelessness went up 37%'. When Luxon finds himself stuck or short-circuiting into NatGPT mode, ministers will often try to dig him out with a friendly question. Winston Peters took the first crack: 'Could the prime minister name just one thing the local MP in Auckland Central is doing about homelessness?' Government MPs giggled, and Swarbrick's rage grew. Her head almost looked like it was vibrating. Before Luxon had a chance to respond, she jumped to her feet in indignation and sought leave of the house to answer the question. Multiple National MPs objected, and speaker Gerry Brownlee dropped it. Tama Potaka took a second crack, asking the prime minister to confirm a housing report that found that 'the increase in homelessness cannot be attributed just to changes in the emergency housing gateway and they may actually be reflective of broader economic and social contexts'. 'Yeah, you!' Swarbrick gestured at the government benches, 'they blame you!' Brownlee gave her a wee telling-off – 'you cannot yell out across the House like that. If it continues, it'll be an early afternoon' – but nothing was stopping the Swarbrick rage train. Te Pāti Māori co-leader Debbie Ngarewa-Packer asked Luxon about whether he would expel the Israeli ambassador. Luxon gave a bland answer about the importance of maintaining diplomatic relationships. Swarbrick heckled 'just words' and 'you heard of Russia?' (While in opposition, National called for the government to expel the Russian ambassador over the invasion of Ukraine.) Ngarewa-Packer turned her focus to the government's proposed electoral reforms that would end on-the-day voting enrolment. Luxon defended the policy, saying people would merely have to enrol 13 days before the election, which is half of the 26-day deadline in Australia. 'They have compulsory voting!' Swarbrick yelled, 'Who do you work for?' Ngarewa-Packer raised allegations that hundreds of Māori voters appeared to have been removed from the voting roll in the past 24 hours. Luxon again insisted that anyone, Māori or non-Māori, just needs to register 13 days before the election. 'Did you listen to the question?' Swarbrick asked. Once again, Luxon referenced the shorter enrolment period in Australia, and Swarbrick, even louder, yelled, 'They have compulsory voting!' With the final question, Ngarewa-Packed asked if Luxon would commit to delaying the reforms until he could ensure 'that he will not disenfranchise hundreds of thousands more Māori and Pasifika voters who have followed all the correct procedures?' Luxon dismissed her concern. 'I reject outright the characterisation of that question.' Across the room, on the verge of pulling out her hair, Swarbrick harrumphed: 'You don't care.'
Scoop
02-07-2025
- Politics
- Scoop
Tamatha Paul Gives Shoplifting The Green Light
Green MP Tamatha Paul is giving shoplifting the green light as she opposes the Government's plan to strengthen penalties, National Party Spokesperson for Justice Paul Goldsmith says. 'The Greens are singing from the same old song sheet, making excuses for anyone who attacks or steals from hard working New Zealanders.' Yesterday Ms Paul said, 'if people don't have enough money to buy food, then they're going to look towards shoplifting things.' 'That seems to be okay with her and the Green Party. Does Labour agree?' Mr Goldsmith says. 'Kiwis need to remember that Labour and the Greens joined forces to vote against tougher sentences for violent criminals, reinstating Three Strikes, banning gang patches and giving Police the power to conduct warrantless searches on gang members. We can only assume this week will be the status quo. 'This Government is making significant progress on restoring law and order. Violent crime is down and Kiwis can feel safer in their homes and communities. A Labour-Greens government would put all of that at risk.'
