Now a $20bn hole accusation

Steven Joyce’s accusation of a $11 billion ‘fiscal hole’ livened up campaign debate. he was widely criticised but didn’t back down.

Now the Government is reversing the hole blame.

RNZ: Govt accuses National of leaving $20bn hole

The government has accused National of leaving it with a $20 billion bill which has not specifically been included in future budgets.

Finance Minister Grant Robertson told Parliament this afternoon that National failed to put aside the money for its promised big ticket Defence Force upgrade.

“As one commentator has said, the National Government never accurately costed it and made no provision in any of its long-term forecasts to pay for it.

“This is far from providing certainty.”

Government officials are now reviewing the programme to look for better value for money, he said.

“This is the responsible thing to do given the mess left by the previous government,” Mr Robertson said.

Robertson seems to be preparing the ground for either a cut back to spending on the Defence Force upgrade, or justifying larger than promised spending and deficits. Or both.

But his predecessor Steven Joyce denied National had left behind a fiscal hole.

He said the $20 billion of promised spending stretched over 15 years and could be paid for out of nearly $110 billion of unallocated capital funding over that same time period.

“There’s plenty of room in the long term forecasts.”

Mr Joyce said it was a desperate ploy to divert attention from Mr Robertson’s plan to ramp up debt.

“I think the Labour Party might be tilting at windmills to suggest this somehow leaves a fiscal hole.”

Expect this fiscal punching and counter punching to continue, but the crunch will come when Robertson presents his first budget next year. Then we should see the actual fiscal situation as affected by new Government policies and spending, for the short term at least

15 Comments

  1. Alan Wilkinson

     /  November 30, 2017

    Lots of squirrels around Parliament. Some are secret.

  2. Missy

     /  November 30, 2017

    I would dispute Robertson’s assertion, to my knowledge the Defence Force upgrade was included in their budget forecasts, and therefore the budget forecasts of the Government.

    This sounds like he is setting up to dial back on the Defence Force upgrade – an upgrade that is long overdue. If this is the case it will test the mettle of the new Defence Minister to see how hard he will fight for the upgrade.

    • Blazer

       /  November 30, 2017

      Joyce just admitted it was..not.

      • High Flying Duck

         /  November 30, 2017

        No he didn’t. It was included in the forecasts, but as it was long term & not imminent spending, the funding had not been allocated as yet.
        Robertson is taking something which is exactly as it should be and using it to lay groundwork to justify his fiscal hole…

        • Blazer

           /  November 30, 2017

          oh really on that basis..he should know Lab have no ‘hole’ then either!
          ‘He said the $20 billion of promised spending stretched over 15 years and could be paid for out of nearly $110 billion of unallocated capital funding over that same time period.’…divide 110bil/15.

          • High Flying Duck

             /  November 30, 2017

            Unallocated by National because as prudent financial managers they made sure there was money in the kitty to cover extra expenses.
            As Joyce has clearly stated, The problem for Labour is that they haven’t allowed any contingencies – even for wage inflation in the public service. They are spending it all and not allowing for any extra expenditures.
            That was the whole issue Blazer. But thank you for confirming why Labour mopped up the financially illiterate vote.

            • Blazer

               /  November 30, 2017

              If Joyce’s acolytes think he has a crystal ball into the next 15 years….it is quite clear where the financially illiterate reside in politics!Too, funny.

          • David

             /  November 30, 2017

            Just over 7 billion a year for capital spending and just over a billion of that to be allocated to the military. Joyce is correct they have budgeted 110 billion over 15 years in “capital” spending.
            The 11 billion hole which will probably appear is in “operational” expenditure, in other words recurring each and every year as opposed to spending capital on a capital asset that you depreciate every year and account for in your capital account which has allocated to it 110 billion over 15 years.

            • Blazer

               /  November 30, 2017

              7×15=105….hey whats 5 billion here or there…when you’re a…Zoologist!

            • alloytoo

               /  November 30, 2017

              Projected expense
              $20B/15 years = $1.34 B per year

              General Capital budget
              $110B/15 Years = $7.34B per year

              $1,34B/$7.34B = 18%

              So what Joyce has said is that he anticipated using 18% of the unallocated capital budget for defence.

              Perhaps Grant wants to use the money for something else, but providing 5 times the requirement seems more than responsible, unless of course you need a squirrel.

        • PDB

           /  November 30, 2017

          Exactly right – with all its spending this new govt won’t have the luxury of $110 billion of unallocated funding nor surpluses year after year.

  3. alloytoo

     /  November 30, 2017

    Gotta Admire Grant, this is the biggest Squirrel he could find (Yes Blazer you can count it) What’s your total now.

  4. PartisanZ

     /  November 30, 2017

    Oh oh … here comes the Sixth Labour Government’s version of “post-election crisis” to herald the next Rogerednomics or Ruthanasia style ‘economic reform’ … maybe?

    “We had all these grand plans … but now we can’t afford them … and its THEIR fault!”

    OMG … What’s left that the polly’s haven’t either gouged or eviscerated?

    Hang on … I should probably ask “Who’s left?” …

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