The post-truth World of Winstonomics

It is not unusual for policitians to make promises they can’t keep. In an attempt to restore some integrity and transparency into politics, The Opportunities Party (TOP) has undertaken to fully cost all our policies and show where the money is coming from. Not all parties are this robust however. One party in particular is writing cheques they can’t cash, and therefore making promises they can’t possibly deliver. That party is NZ First and their leader is Winston Peters.

We have filtered through the long list of ‘policy’ supplied by New Zealand First on their website and pulled out everything we could find that resembled a concrete and significant election commitment. In the world of soundbites and election year promises it is easy to get carried away. But it is important to remember that while politicians can promise the world, we are all constrained to the reality that these promises cost money.

Winston’s supporters are rightly looking for a change from the ‘do nothing’ establishment parties that have led us to a society with rising inequality, forgotten regions, and unaffordable housing. However Winston owes those supporters a set of promises he can actually deliver on, and that is not the case with his current offering.

While some of the policies from NZ First have costings, the majority do not, so we took it upon ourselves to do some analysis, and so far the tab has run up to around $10 billion per year, with the promise of more to come. In the interest of an open and honest discussion we ask if Winston could give us a hand and help fill in the blanks.

By far and away, the biggest cost on his campaign check book so far is his promise to give a universal student allowance and write off student debt for those who stay in New Zealand for the same period of their study. Now, this would be great for all those students who are worried about the burden of their burgeoning debt. But what about the 40% of kids that don’t go into post-secondary school study? And what about the people that have to go overseas for their career? And what about the $4.6 billion price tag? Where is that money going to come from?

Winston has also promised to ‘remove GST off food’ as well as rates. Let’s put aside the fact tinkering with our GST system is fraught with issues, and there are much more efficient ways to make housing and food more affordable. The real problem here is the estimated $3.6 billion price tag. The NZ First website claims it will be funded through a “tax evasion crackdown “and clamping down on the black economy. There is absolutely no plan attached to how this crackdown will happen.

His plan to return GST from tourism to the regions hits the chord that he has been playing for years sounding the death of our regions. With minimal detail given its hard to know what this really means let alone estimate the cost; it isn’t clear what money he would give back, to whom, and what that money would be used for. However if this included both international and domestic tourism the bill could run up to around $3 billion. The money has to come from somewhere, we wonder where.

The list of promises goes on with three free GP visits for pensioners a year (there are 600,000 pensioners and at $60 extra per visit that is $108 million), 1,800 more police ($324 million based on Labour’s calculation of 1000 police), free health checks for year 9 students ($10 million, based on the cost of the B4 school check). These are all outlined on the website and not a single one comes with an indication of how they will be paid for.

The total bill for these promises alone comes to $10 billion bill per annum. That sort of money cannot just be pulled out of thin air as Winston would have us all believe, and certainly can’t be paid for by nebulous promises to ‘reduce tax evasion’.

This bill does not even include several of his more nebulous or one-off promises such as recarpeting government buildings with wool (costed by the Taxpayers Union at $60-90m) or to allocate adequate resources into alternatives to 1080 which he will ban (Dave Hansford on Newsroom put the cost of this at $150m just for half of one national park). He also wants to buy back the shares in SOEs that have been sold, which he will somehow do at the same price they were sold for. In fact NZ First wants to bring our banks back into New Zealand ownership also. NZ First also plans to ban inshore fishing and compensate the fishers for their losses; a plan that if it includes paua, lobster and snapper would cost at least $1.3b.

His commitment to railways of national importance, including a rail line to Marsden Point, will apparently be funded by “revenue generated by railway service charges” and a “combination of Land Transport Fund funding and crown grants”. These investments might prove to be cost effective, or they might be as big a white elephant as the Government’s Roads of National Significance. At this stage we don’t even know the cost, with estimates for the Marsden Point line alone ranging from $100m-$1b. For now we’ll be generous and not pass judgement until we see some real analysis.

Winston’s base for some time has been the elderly, and he is continuing that track record with promising to remove income and asset testing from aged care. No one has costed that proposal as it is likely to require Treasury’s database to do so.

And of course Winston’s biggest bribe is a long term one; his promise to keep the age of eligibility for Superannuation at 65. NZ super alone by 2060 will be soaking up 8c in every dollar we earn, and as a result of this and rising health spending government debt will have ballooned to twice national income. Winston has in the past said that NZ Super is sustainable. By doubling GDP Winston claims that we could halve the Super bill. He has neglected to give a plan on how to double GDP, and didn’t realise that NZ Super is linked to income, so would double too. In fact the only way that GDP could mathematically double without the super bill also rising is by either immigration or increasing business profits; neither of which are likely to appeal to Winston’s followers.

All in all New Zealand First is much in the tradition of Muldoonism – it promises heaps but is more than a little short of funding detail. In fact, it’s better to say it’s bereft of funding detail. This is the problem with pork-barrel politics, its proponents are ever so ready to make promises in order to ‘buy’ votes but they haven’t a clue as to how they’ll fund them. Peters & Co have this affliction on a massive scale – at least to the extent of $10 billion per year of unfunded promises – that is very big,

Some would say it doesn’t matter, Winston is there to keep the others honest. Well in order to do that, a little honesty from him on where on earth he thinks he’s going to get the money to fund his largesse, is in order.

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