Judith Collins launching the 2020 National Party campaign. (Photo by Hagen Hopkins/Getty Images)

The launch that fell down a four-billion-dollar fiscal hole

Judith Collins’ hopes of kicking the National 2020 campaign into gear were stalled by an embarrassing accounting error, writes Justin Giovannetti from the Hutt Valley.

Today was the day the National Party’s election campaign was finally going to start rolling with momentum after a belated campaign launch. Instead, festivities were overshadowed by a Labour press release that landed with a thud.

Three hours before your party unveils an election campaign focused on being the country’s most competent economic managers, you don’t want this email appearing in the mailbox of every newsroom in New Zealand: “National has $4 billion mistake in its economic plan”.

National released its economic plan on Friday morning with a temporary income tax cut for New Zealanders, some spending cuts and a debt target of 35% of GDP midway through the next decade. Part of the plan would be achieved by cutting Super Fund contributions until 2031. However, National used the wrong numbers, drawing figures from the government’s last budget instead of last week’s pre-election fiscal update from Treasury. The mistake is worth $4 billion, or 1% of the size of New Zealand’s economy.

The email, from Labour finance spokesperson Grant Robertson, landed as Judith Collins and National prepared for a virtual campaign launch from a soundstage in Lower Hutt. The party’s campaign launch had been planned as a splashy affair in late August in South Auckland, but was scrubbed with the return of community transmission of Covid-19. Instead, they settled for a small live crowd and a livestream.

An hour before people began arriving at the launch, Robertson spoke on the steps of parliament about the magnitude of the error. He called it a blow to National’s creditability as economic managers.

“When you’re putting together these things you do need to be able to make the numbers add up. This does go to credibility. It’s a mistake, clearly, that has been made here,” said Robertson, who called it an “extremely basic error”.

This wasn’t an issue of putting a decimal in the wrong place. Contributions to the NZ Super Fund are determined by a legislated formula. Treasury’s revised numbers only reflected the formula. National’s error failed to calculate the formula correctly, Robertson said.

“There’s no Bill English, there’s no John Key. This is the kind of mistake you get with that level of inexperience,” he concluded. The comparison to the two former National leaders has become a favourite of Robertson’s in recent weeks.

An hour later, National finance spokesperson Paul Goldsmith faced reporters outside the campaign launch venue. “This is an irritating mistake. We missed it,” he said, adding that he’d apologised to his leader for the mess. “It’ll take us a little longer to get where we want to be.”

National won’t change its spending plans or tax cut programme, but will instead increase its debt to GDP target for 2034 from 35% to 36%. Until a few days ago, Goldsmith had been aiming for the much lower figure of 30% of GDP by 2030.

Current projections from Treasury expect government debt to be just under half the size of the economy.

Facing more questions about how the error happened, Goldsmith looked to end the inquiry by taking full responsibility. “It’s irritating, but we own up, we accept our mistakes, move on and fix them,” he said.

The actual script of the campaign launch was apparently unchanged by the last minute error. Outgoing MP Maggie Barry, who hosted the launch, said in her opening remarks that the party looks forward to showing New Zealanders “our well thought out and costed fiscal plan”.

The elevation of economic credentials was underscored by the slogan. Up until today, the campaign slogan has read: “Strong Team. More Jobs. Better Economy.” Emblazoned on the set behind Collins today were just two sentences: “Your Economy. Your Future.”

In her speech, Collins said National was the party that would grow the economy, because it is “bold, competent and decisive”.

Then she faced reporters, who ended up asking Collins numerous times about the day’s mistake. Here are each of her answers to questions about the mistake.

Her first try: “Nothing Grant Robertson says worries me.”

Her second try, after the scale of the error was pointed out: “It’s actually over 10 years, it means very little. It’s the difference between a 35% debt to GDP ratio and 36%. That’s nothing compared to Labour’s 48%. It’s only a matter of projections.”

Her third try, when the question was repeated: “It’s entirely inconsequential.”

Her fourth try: “I think people understand that an error was made, it was owned up to, and actually, I’ve got no problem with that. The fact is, if everybody went through life thinking they could never ever make an error, no one would get out of bed in the morning.”

That was the first time she used the word error.

Her fifth try, when she was asked if she’d apologise to her party for the error: “I think who should apologise is Jacinda Ardern for expecting that a 48% debt to GDP ratio is acceptable …”

Collins was cut off by a reporter who repeated the question.

Her sixth try: “I don’t think anyone is worried about that.”

Her seventh try, when asked how $4 billion could be described as inconsequential: “You’re talking over 10 years or 15 years, whatever it is, it’s a projection only – 35% to 36%, that’s nothing compared to 48%. These are simply forecasts and of course there was an error. You know, Goldie is feeling very bad on it, he’s no doubt told you so.”

Goldie is, of course, Paul Goldsmith. And the projection is over 10 years.

Her eighth try, when asked again about an apology: “I think who should be apologising is someone who says the average earner can’t have $3,000 of their money back.”

She’s referring to the average size of her tax cut, which has been criticised by Labour.

Her ninth and final try, when asked if Ardern should apologise for National Party mistakes: “No, I think Jacinda Ardern should apologise for promising New Zealanders that $2 billion would kickstart the Kiwibuild programme.”

It was then pointed out to her that the Kiwibuild promise was half the size of her error today.



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