Cavalier attitude to costings undermines Labour's economic credibility

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With Labour traditionally struggling for economic credibility, they're doing themselves no favours with pressure mounting on them to explain how they're going to pay for all the policies they've agreed to in their coalition agreement with New Zealand First, and their confidence and supply agreement with the Green Party.

Of the policies in those agreements, it's notable that only two have a price tag attached to them. They are the $1 billion a year Provincial Pork Barrel (Regional Development Fund) for New Zealand First, and a $100m Green Investment Fund for the Green Party.

Grant Robertson poured fuel on the fire when he appeared on The Nation and was repeatedly pushed by host Lisa Owen on releasing costings. Robertson also erred when he tried to claim that Labour hadn't had access to the public service to cost the policies they'd agreed to, a claim which has now been shown to be false, with Treasury confirming that they had worked on costing policies for Labour during the negotiations to form a new government.

With Robertson's misleading comments spectacularly exposed, the pressure piled on when Labour announced they were increasing student allowances by approximately $50 a week. What Labour failed to do when they made that announcement was to also reveal how much the increase was going to cost, with Tertiary Education Minister Chris Hipkins offering a bumbling excuse that essentially boiled down to that the government would release the costings once they'd figured out how much it would cost.

It was an amazingly cavalier attitude to take about the spending of tax payer's money. Not withstanding the fact that increasing student allowances is a good move, to announce the increase without purportedly knowing the full cost of that increase, suggests a carefree attitude to responsible management of the government finances that plays right into National's hands.

The pressure is clearly showing. Labour was forced to cave after a day and release costings on the student allowance increasing, with it costing around $700 million over four years, less than what they'd originally anticipated it would when they announced the idea in opposition back in April.

Whether or not you agree with National's finance spokesperson Steven Joyce's claim of an $11 billion hole in Labour's fiscal plan, Labour are doing themselves no favours by mangling the financial side of announcements. If Labour wants to dispel doubts about their economic credibility, then they need to be upfront about the costs of new policies as they announce them, and ensure that their mini-Budget, should it be announced, stacks up perfectly.