Nowhere to run

Pre-election claims are coming back to bite the embattled PM as his deputy goes off on a tangent of his own.

- Dany! McLauchlan

National fought the election on the economy and the cost of living, and it fought hard. Labour had taken on too much debt! All its reckless spending was driving up prices! The interest rate hikes to correct this were sending the nation into recession! This economic vandalism was hitting hardworking Kiwi families in their back pocket! The government's books were worse than they appeared!

Week after week, Christopher Luxon and Nicola Willis alleged that Labour had cooked the numbers: infrastructure commitments weren't properly funded; major ongoing costs like the school lunches programme had been temporarily accounted for by diverting money from the emergency Covid relief. In its pre-election fiscal update (Prefu), Treasury predicted at least three years of deficits. Willis famously demanded of Grant Robertson, "How big is his [fiscal] hole?"

A National government would fix all that. It would address the cost-of-living crisis in its first Budget by delivering $14.6 billion of tax cuts over four years, Working for Families extensions and tax credits, most of which would trigger on July 1 this year. This would be funded by a combination of savings and new revenue measures. They swore they could still get the country back to surplus and that there definitely wouldn't be any new taxes to pay for it all. There would be spending cuts but not to front-line services.

Nearly every economic commentator in the country expressed scepticism about the affordability of National's extravagant promises but Luxon and Willis refused to release their modelling, reassuring the nation that the numbers were "rock solid".