{"id":73798,"date":"2023-09-29T14:07:11","date_gmt":"2023-09-29T01:07:11","guid":{"rendered":"https:\/\/www.farmersweekly.co.nz\/?p=73798"},"modified":"2023-09-29T14:07:12","modified_gmt":"2023-09-29T01:07:12","slug":"national-promises-spending-cuts-before-christmas","status":"publish","type":"post","link":"https:\/\/www.farmersweekly.co.nz\/politics\/national-promises-spending-cuts-before-christmas\/","title":{"rendered":"National promises spending cuts before Christmas"},"content":{"rendered":"Reading Time: <\/span> 3<\/span> minutes<\/span><\/span>\n

A National Party-led government would deliver a pre-Christmas mini-budget to kick off 6.5% spending cuts that it would require from back-office or nonessential programmes, National finance spokesperson Nicola Willis says.<\/p>\n\n\n\n

She made the pledge at the publication of National\u2019s updated fiscal plan to deliver a $3.4 billion improvement in government debt levels and slightly larger fiscal surpluses than the Treasury forecast in last week\u2019s pre-election economic and fiscal update.<\/p>\n\n\n\n

National\u2019s much-awaited \u201cfiscal plan\u201d is its last substantive policy announcement before early voting starts on Monday, ahead of Election Day on October 14.<\/p>\n\n\n\n

The plan contains no changes to its previously announced \u201cself-funding\u201d package of income tax relief, including no change to the $764 million a year it expects to raise by 2027\/28 from a 15% tax on the purchase of homes worth more than $2m by foreign purchasers.<\/p>\n\n\n\n

National claims it will cut spending on the bureaucracy by $594m annually for the next four years to produce $2.376bn of savings over the period in a package of wider savings and a raid on funds generated by the Emissions Trading Scheme (ETS).<\/p>\n\n\n\n

A further four-year saving of $2.119bn \u2013 a bit over half a billion dollars a year \u2013 is saved by \u201cclosing Labour programmes\u201d. Lower spending is also achieved by indexing benefits to inflation rather than wages.<\/p>\n\n\n\n

The total over four years of savings and revenue redirection is $8.384bn.<\/p>\n\n\n\n

The half-billion dollars applied to tax relief from the ETS funds replaces the $500m that Labour had allocated in the pre-election economic and fiscal update (Prefu) to the National Land Transport Fund (NLTF).<\/p>\n\n\n\n

National said it would scrap that but still find the same sum for roading investment by taking $2.1bn from operating allowances over the next four years and $1.6bn from the multi-year capital account.<\/p>\n\n\n\n

National\u2019s new spending allowances in the next four years\u2019 budgets are shaved back to produce $3.3bn less new government debt by 2027\/28 than forecast in the Prefu.<\/p>\n\n\n\n

However, National allows itself $9.9bn of unallocated spending over the four-year period, giving \u201csignificant buffers\u201d to allow a National-led government to \u201crespond to cost pressures and changing circumstances\u201d.  <\/p>\n\n\n\n

The plan also envisages using private capital to pursue additional transport spending \u201cwith new cost recovery tools, like tolls and value capture levies, being introduced to cover the cost of these projects\u201d.<\/p>\n\n\n\n

\u201cNational will issue a new government policy statement on land transport, in line with the funding set out in this fiscal plan,\u201d the document says. \u201cPriority will be given to state highway improvements, road maintenance including fixing potholes, and the roll-out of a nationwide EV charging network.<\/p>\n\n\n\n

\u201cNational intends to spend less on other areas such as coastal shipping, inter-regional public transport and walking and cycling.\u201d<\/p>\n\n\n\n

Willis said that net government debt had blown out from $5bn to a forecast $104bn since Labour took office in 2017 and that government spending had risen 80%.<\/p>\n\n\n\n

\u201cThe country cannot afford another three years of it,\u201d National\u2019s leader, Christopher Luxon, said, announcing the plan at the offices of one of its campaign advisers, Topham Guerin.<\/p>\n\n\n\n

National\u2019s own forecasts show that net crown debt still peaks at almost that level \u2013 at $102.8bn in 2025\/26 \u2013 but drops away faster in the following two years to be at $97.6bn in 2027\/28, compared with $21.1bn in the Prefu.<\/p>\n\n\n\n

That helps produce forecast budget surpluses of $2.9bn in 2026\/27 and $1.8bn in 2027\/28, compared with Prefu forecasts of $2.1bn and $400m, respectively.<\/p>\n\n\n\n

In terms of new spending, National has allocated a $718m contingency \u201cto cover a potential 1400 increase in the prison population over the next four years\u201d as a result of tougher sentencing policies.<\/p>\n\n\n\n

\u201cGovernment spending over the forecast period is expected to decline from 33.5% of GDP to 31% of GDP by 2027\/28,\u201d National said.<\/p>\n","protected":false},"excerpt":{"rendered":"Party delivers updated fiscal plan in last major policy release before polls open.\n","protected":false},"author":16,"featured_media":73799,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_FSMCFIC_featured_image_caption":"National will give priority to state highway improvements, road maintenance including fixing potholes, and the rollout of a nationwide EV charging network.","_FSMCFIC_featured_image_nocaption":"","_FSMCFIC_featured_image_hide":"","footnotes":""},"categories":[6],"tags":[80],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t