National’s financial responsibility rules announcement is, at best, nothing new and, at worst, a highlight of its own fiscal failures, writes Henry Oliver in today’s excerpt from The Bulletin.
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National unveiled three “Budget Responsibility Rules” yesterday that it says a re-elected National-led government would commit to: returning to surplus in 2028–29, pushing net core Crown debt below 40% of GDP, and bringing core Crown expenditure down towards 30% of GDP, as reported by The Post’s Anneke Smith.
Finance spokesperson Nicola Willis framed the rules as “fiscal guardrails” against future shocks, warning that without them New Zealand risked spiralling debt and an eventual forced correction through major tax hikes or service cuts. Prime minister Christopher Luxon cast the announcement in security terms, telling reporters an economy that can’t support itself in a crisis is a strategic risk as much as a financial one, as reported by 1News.
‘A goal is not a strategy’
The trouble, as almost every major news outlet quickly noted, is that none of the three targets are actually new – all three already sit inside the fiscal strategy published alongside May’s Budget. The Taxpayers’ Union welcomed the general direction but said the announcement lacked teeth, The Post reported, with executive director Jordan Williams arguing that just by calling existing targets “rules” doesn’t make them enforceable, since nothing happens if National breaks them.
ACT was similarly unimpressed, with David Seymour issuing a statement titled “A goal is not a strategy,” arguing the promises were “three years too late” and that hitting a 30% spending target would require “courage” (a word used three times in the statement) to deal the underlying causes of higher spending, which Act see as rising superannuation, health and welfare costs and the size of government.
‘Cynical and desperate’
Labour dismissed the announcement, with finance spokesperson Barbara Edmonds calling it “much ado about nothing” and accusing National of wasting a Sunday re-announcing its own existing fiscal strategy, while leader Chris Hipkins branded the move “cynical and desperate.”
Green co-leader Chlöe Swarbrick argued the real purpose was to shift attention away from National’s record – which the Greens see as highest unemployment in 11 years, small businesses closing, young people leaving the country – while drawing a contrast between the debt taken on for landlord tax cuts and the debt she said the Greens would take on for renewable energy investment.
‘Why has National drawn attention to its own failure?’
By this morning, the harsher verdict was coming from economists rather than election opponents, again reported by The Post’s Anneke Smith. Former Reserve Bank and Treasury official Michael Reddell quoted St Augustine to describe the policy – “Lord, give me continence and chastity, but not yet” – noting the debt commitments were barely different to what National promised three years ago, just pushed back a term.
Economist Cameron Bagrie was even harsher, arguing voters had good reason to doubt any party’s fiscal seriousness given National had “back-loaded” its own savings into the future without having delivered them yet, which will “straitjacket” all governments in the near future. He described governments as trapped in a “Bermuda Triangle” between fiscal responsibility, infrastructure spending and maintaining public services, arguing you can only deliver two of the three without raising taxes – and that National had already chosen surplus and infrastructure, which could mean worse public services in areas like health.
Harsher still was the Herald’s Thomas Coughlan who noted that Willis has already had to break similar promises. “In 2023, National campaigned on bending the debt curve, getting expenses below 30% of GDP and, most importantly, returning to surplus by the end of the current financial year,” Coughlan wrote. “That last goal has been missed so spectacularly that even after changing the way in which the operating balance is measured, the coalition will still miss the original target, which has had to be pushed back. Usually, a party tries to hide its failures and broken promises. Why, in re-announcing these rules, has National drawn attention to its own failure?”
