6 September 2005

Key can’t even make next year’s figures add up

Finance Minister Michael Cullen today challenged John Key to put out a proper alternative budget with all policies fully costed as Labour used to do in Opposition.

“They cannot be allowed to coast through to the election on the basis of bland assurances that their numbers add up. A higher standard is required of any party claiming to have the credentials for government,” Dr Cullen said.

They have allowed for $1.3 billion in new spending in Budget 2006. However, they have already committed over $1.8 billion in new spending for that year.

Part of the reason for their blowout is that they refuse to admit to the real costs of their policies.

Examples include:

- Compulsory bulk funding: National has cost this at $280 million over four years when in fact it will cost closer to $1.4 billion if they are to honour their promise that there will be no loser schools.

- Law and order: National has allocated only $100 million in Year One, $200 million in Year Two and $300 million in Year Three yet their policies, including no parole, would cost over $700 million a year to implement, even without allowing for John Key’s promised 1000 extra police.

- Work for the dole: The cost per participating beneficiary would be an additional $40 a week. Assuming a take-up rate of 50,000 full time equivalents, that translates into $104 million a year. National has made no provision at all for this commitment.

“This is not an exhaustive list. There are other examples that could be included, such as National’s failure to set aside any funds to cover the administrative costs of increasing the settlement rate of Treaty of Waitangi claims. Nor are these are minor miscalculations. They are significant and there are a significant number of them.” Dr Cullen said.

Other items which they claim they will not cut, but which do not appear in their figures include charges already allocated against future budgets such as: defence [$73 million a year], health [$489 million a year], Official Development Assistance [$19 million a year] and the tertiary student component funding rate changes for 2007 [$59 million a year.]

“Altogether this adds up to $1.88 billion in Budget 2006 which means National has already overspent the $1.3 billion allocation it has provided for that year.

“Further, these costs come on top of the $3.5 billion in extra borrowing and the around $3.5 billion in spending cuts National has admitted would be necessary to fund its tax cut programme.

“New Zealanders are entitled to comprehensive answers on all these issues to be able to cast an informed vote in this election,” Dr Cullen said.

Real annual costs of National’s announced spending commitments for Budget 2006

Provision allocated $1,300m

Compulsory bulk funding of schools $350m

Law and Order $700m

Work for the Dole $104m

Student loan interest deductibility $90m

Defence (already committed) $73m

Health Funding Package (already committed) $489m

Official Development Assistance (already committed) $19m

Tertiary Student Component Funding Rate Changes for 2007 (already committed) $59m

Total committed $1,884m

Amount overspent $584m

ENDS

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