Lisa Own interviewed Labour finance spokesperson Grant Robertson on The Nation yesterday. It will be repeated at 10:00 am Sunday but here is the interview online.
Is it time to invest or to borrow to pay for infrastructure? Lisa Owen asks Labour’s Finance Spokesperson Grant Robertson what he’d do in Bill English’s place.
Transcript (provided via Newshub by able.co.nz):
Lisa Owen: Labour’s finance spokesperson, Grant Robertson, reckons economic success should include social as well as fiscal surpluses, but with Bill English promising a growth to 2018 of 3 percent, unemployment to 4 percent and surplus peaking at 6.7 billion, those fiscals are looking pretty good. Let’s find out what Grant Robertson makes of that. Good morning.
Grant Robertson: Good morning, Lisa.
You might not like how they’re sharing out the pie, but, come on, the pie looks pretty good, doesn’t it?
Oh, look, we have to be a bit careful with some of those numbers. When you look at the growth numbers, if you do them on a per-person basis, it’s flat. The economy is actually not growing on a per-person basis. Unemployment has gone up. We’ve got 144,000 people out of work at the moment. A place you’re familiar with in Gisborne — one in 10 people out of work there. So you can look at the top-line numbers and say, ‘Yep, sure, the economy’s growing,’ but in the end if people aren’t getting a share in that prosperity, what’s the point in it?
Well, let’s look at some numbers more closely. The government brought forward spending from 2017 to keep pace with immigration. So Labour’s crunched the numbers. Are we keeping up with health and education spending per person?
No, we’re not. If we look at education, for instance, in the 2016-17 year, per pupil, there’s actually going to be an $85 reduction in funding in our education system, and that will mean parents pay, because parents are already meeting a greater cost of their children’s education — 10 times the rate of inflation; that’s how much the so-called voluntary donations have gone up. So, no, we’re not. In health, we’re looking at a shortfall this year of maybe around $50B— $50M, sorry. That’s part of a $1.7B cut effectively in health.
But the thing is Bill English would say, ‘So what?’ to that. He would say, as he just said, you’re just wanting to shovel more money at a problem to show you care, and that doesn’t work. Results are what matter, not the amount that you spend.
Well, I certainly wouldn’t be saying, ‘So what?’ to the elderly constituent in my electorate who’s been waiting for a hip operation for about three years now in constant pain. And University of Otago did a study recently that said that someone who was on a level of pain six years ago and would’ve got an operation doesn’t get an operation today. So these results are not there.
Okay. He also sent a very clear message there about Auckland’s housing challenge. It’s the Council’s fault. Don’t expect concessions to help raise money for infrastructure. So I’m wondering, where should the money come from, do you think?
I think the Auckland Council and Aucklanders generally would be quite surprised to learn today they’re an independent country, because that’s what it sounded like when Bill English was talking today. There’s a joint responsibility to sort this out, and it’s not as if this problem emerged this week or last week. This is something the Auckland Council and the government should have been working on together for a very long period of time, and I think Bill English shoving away constantly every problem to the Auckland Council is unacceptable.
So would you undertake right now then, to Labour if they were in government, to pay for Auckland’s infrastructure?
I think we’ve got to work together with Auckland to pay for the infrastructure. There’s no point throwing around a blame game and elbowing each other in the ribs to say who is responsible. Clearly, the government has a share responsibility here. We have already said that we want to do a massive state-led affordable-house-building programme. That’s KiwiBuild. We think that’s essential. That’s where central government can come on board. We can borrow money more cheaply than the central government level.
But can you even do KiwiBuild, because the one thing that people don’t seem to be addressing is that we don’t have enough builders and plumbers and tradies. So is it even possible?
Absolutely, it’s possible. Certainly, we’ve got people who’ve been employed in the Christchurch rebuild who will now be available, but we should be training more people, and we can do that right now. It’s one of the reasons why we’re proposing the three years free post-secondary school training and education is to keep that momentum going. We want to make sure there’s more apprentices. We’re prepared to take the money that people get for being on the dole and pay that as a subsidy towards employers to take on more apprentices.
Yeah, but apprentices don’t come online for years.
In the building sector, you can get them in there and get them helping out right away, but, yeah, look, we will have to work hard to find that labour, but we have to do it. Fundamentally, getting affordable housing is the core of getting our communities strong. You’ve got— You’ve been running stories about all the people who are moving around from school to school to school; that’s because they don’t have a home to live in. If we actually put housing first, we can build strong communities, and from that we can get better economic growth, we get better society.
The Prime Minister hinted at the fact that Auckland Council should sell off assets — should they?
Well, in my own view, no. Auckland Council have to make its own decisions about that, but that to me is an incredibly short-sighted way of solving a much bigger problem than that — that is solved as a partnership between Auckland City and the government. I have to say, the way Bill English was talking and behaving in that interview with you is a sign of failure. If he’s at war with the Auckland Council, then Aucklanders are being failed by the government.
Well, Bill English has chosen to pay down debt, rather than spend more on infrastructure in the Budget, but I’m a little bit confused about your stance, because in your speech, in your pre-Budget speech, you said, ‘It was concerning that National hadn’t put much of a debt in New Zealand’s debt,’ then on the other hand you said, ‘It’s also time to invest.’ So which is it?
Well, the concerning bit is the fact that they haven’t managed to grow their economy in real terms over the last eight years, so that’s why. We’re not— We’ve got a massive problem with productivity in New Zealand. We are still creaking along in that regard. But what I’m saying, and it’s not just me — it’s also the Reserve Bank Governor, Graeme Wheeler, is saying — is we do need more infrastructure spending. That is a way of helping kick-start a sluggish economy.
So would you borrow to do that?
You’d have to borrow some of that initially, yes, absolutely, but that’s the problem right now today is that we need the economy to get going. It’s flat. GDP is flat. Graeme Wheeler, other economists are saying, ‘Let’s get a bit more infrastructure spending,’ and we’ve got to be very careful about the government’s numbers on infrastructure in the Budget as well. They were claiming $2.1B’s worth of spending. That includes nearly $1B on the IRD’s computer system. I don’t think that’s what most New Zealanders would call infrastructure.
And Bill English’s comments to you — he needs to be very careful about what he was saying there, because the actual new spend on infrastructure is going down at a time where we need more.
All right, there’s a few things I want to get through before we run out of time. You want to restart the Tax Working Group. That’s a Trojan Horse for more taxes, isn’t it?
No, it’s a vehicle for making sure we get a tax system that deals with the fundamental challenge in our economy, and that— No, no, let me finish.
It’s a vehicle for Labour to get new taxes without being honest with the constituency, and saying, ‘You’re going to get more taxes under Labour.’
Absolutely not. It’s a way of making sure that we balance up our tax system. So we’re going to be very specific for that working group about what its mandate is. Its mandate is to get a better balance in the system between incentives to invest in a productive economy and speculation. We have far too much speculation in our economy.
So when it tells you we need a capital gains tax, what are you going to do then?
Well, we’ll look very seriously at that, and that’s why we’re doing it. One of the things about being in opposition—
So there will be, either way you do it, there will be more new taxes under Labour?
We don’t know that until we see what happens, but what we do want is a better balance in the tax system. At the moment, when workers go to work, every day they pay their taxes. When people are speculating, for instance in the housing market, they can get away with it. We need to look at what the best way to deal with that is. We’ll bring the experts in, but they will have a specific mandate to make sure that we start addressing some of the fundamental structural problems in our economy.
Okay, last election you promised not to go beyond National’s spending limits. Is that still your commitment?
We have to wait until we see what they’ve got, but we will run a disciplined budget, but we’ve got priorities, Lisa, and our priorities are health, housing and education, and every New Zealander today can see the problems there. And I think it’s irresponsible of Bill English not to address them.
But the thing is when you look at the things you want to invest in, you already committed KiwiBuild $1.5B up front as an investment, tertiary ed. $1.2B by 2025. You’ve pledged to catch up healthcare and education. Man, that adds up.
It adds up, but it adds up to making sure that New Zealanders get a decent start in life and the opportunity to make the choices that they want. These are investments, Lisa. We’ve got to stop seeing people getting a tertiary education as a cost; it’s an investment.
John Key’s saying that we can afford $3B in tax cuts. Is that the red light for you to have more wiggle room in your spending to spend more— to say you’ll spend more?
What I’m interested in doing is investing to make sure that people get good housing, an education system and a health system that works for them, and that we’ve got the infrastructure to build the decent jobs all over New Zealand. That will be my focus.
All right, before we go, Andrew Little is on single digits when it comes to the preferred Prime Minister stakes — 8.9 percent. Are you happy with that?
Andrew’s not happy with that. The point is he’s doing a good job. He’s brought our team together incredibly well over the last year. We’ve got a focus now on education, health and housing—
8.9 percent is a good job? New Zealanders aren’t seeing a good job.
Look, I can’t take responsibility for the polls. What I know is the guy that I work with every day is working hard. He’s got the vision to say, ‘We need to focus on health, education, housing, building up jobs around New Zealand,’ and I think he’s doing a good job.
8.9 percent is not going to make him Prime Minister, though, so could you challenge him before the next election?
Categorically not. Andrew’s doing a good job.