New Zealand Labour-led coalition pledges investment in core public services

20 Oct 17

New Zealand’s new Labour-led government has pledged to reject proposed tax cuts and reinvest the money into “core” public services. 

Labour, led by 37-year-old Jacinda Ardern who will be New Zealand’s youngest prime minister since 1856, promised to address the “chronic underfunding” of health, education and police.

“By choosing to reject tax cuts, Labour can deliver NZ$8bn more for health, NZ$6bn more for education, and NZ$5bn more for our most vulnerable families,” Ardern said on the Labour website.

Tax cuts, proposed by the ousted National Party, would have cost NZ$2bn per year and see NZ$400m go to the top 10% earners.

Labour also said it wanted to cut the unemployment rate to 4%.

Other fiscal plans include infrastructure investment, for older citizens and the reinstatement of tax credits for single people on low incomes.

But it said it was committed to ongoing fiscal rectitude, saying public service investment would be made “while running surpluses and paying down debt”.

Labour’s finance spokesperson Grant Robertson said: “Labour is determined to build durable public services, and that means ensuring that the government’s fiscal position is robust and able to withstand future economic shocks.”

It also has plans to further reduce national debt by introducing a new tax on water and pollution.

Ardern took over the Labour leadership in July and made tackling inequality, affordable housing and student debt key parts of her election campaign.

Labour came second in the in the September elections, behind the National Party. With no party able to secure a majority, Labour gained power after the New Zealand First party agreed to join them in government. The new coalition is also supported by the Green Party.

Earlier this month, the country delivered its third fiscal surplus which the finance minister said “should be interpreted with caution”.

The country’s net debt was reduced to the equivalent to 22.2% of GDP, the finance minister announced.

 

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