National Leader Simon Bridges is suggesting a National Government could bring forward Auckland’s second harbour crossing.
The Auckland Transport Alignment Project current does not have work on a second harbour crossing scheduled to begin until the late 2030s at the earliest.
“We can do more with private funding,” he told POLITIK.
“I don’t think New Zealanders would begrudge a second harbour crossing or very significant infrastructure happening with private capital if it is going to be done decades in advance of when it would otherwise be done.”
Asked if he was saying the crossing was now on National’s agenda, he said: “You will see our plan in due course.”
POLITIK: “That is neither a no – or a yes.”
BRIDGES: “You’re right.”
Bridges’ refusal to be specific about the harbour crossing was rather typical of his whole approach to the release yesterday of what was billed as “National’s Economic Plan for 2019.”
There was a grain of truth in Finance Minister Grant Robertson’s reaction that it was “over-hyped”.
Bridges made three promises the centrepiece of his policy launch speech:
- New Zealand’s economic growth would be at least three per cent per annum. The Reserve Bank last week updated its GDP forecasts and projected:
- Annual growth rate per person would move to the top half of the OECD. On the latest OECD figures (for 2018) New Zealand lies at 22 of the 37 OECD nations with a GDP per head of $US38,248. To get to the top half — 18th – would mean hurdling over Italy, Korea, Japan and France to raise that figure to more than $US42,500 a year.
- National would reduce the after-tax income gap with Australia.Australians on the average wage take home 28 per cent more per year than New Zealanders on their average wage — $NZ66,832 versus $NZ52,392.
But what Bridges did not say in any detail was how he was going to meet these goals.
And he muddied the waters by misstating the tax burden on someone on the average wage.
“People on the average wage shouldn’t be paying almost 33 per cent in the dollar,” he said.
They pay 20.84 per cent tax and even at $70,000 annual income, though the marginal rate will have gone to 33 per cent, their total tax burden will be 21.42 per cent.
Slip-ups in detail like this might be explained by Bridges’ ongoing friction with Treasury over appointing a Treasury officer to his office; so far no-one has been.
However the clear intent yesterday was not to drill down into detail but rather to underline Naitonal’s credentials as economic managers and to present aspirational goals to the electorate.
National has already announced that it will index income rates to inflation and Bridges is promising more.
“We recognise we need to do more,” he said.
The details will come later.
“We will announce our full tax plan that will see people on the average wage better off and keeping more of what they earn<” was all he would say yesterday.
But cutting tax could see National with very little fiscal room to move in areas that it has already tagged for extra spending such as education, police, corrections and health.
“We simply have different promises from the government,” he told POLITIK.
“ Bluntly we won’t waste lots of money the way I feel they have.
“ I’m not going to announce today what we might be doing.
“but it’s no secret I’ve been critical about a couple of billion dollars on Kiwkbuild; $3 billion on Shane Jones’ slush fund which hasn’t really helped the regions or provincial NZ; last week, a homeless package which seems to me much more a knee jerk reaction to bad polls than a policy plan; many hundreds of millions more being spent at the moment on job seekers support or wider benefit payments because not enough is being done to get people off welfare and into work.
“It’s not as if the Government doesn’t have future allowances with relatively significant new spend in them each year; 2.4 billion dollars for the next few years per anum.
“So this is not insignificant.
“And the final point, which I’m not suggesting would be a major factor in our costings, but I have a very firm view that if we implement our five-point plan around tax relief, removing regulations, infrastructure and the like we will see higher growth.”
So it’s possible he will be able to make spending increases and have tax cuts in his operating budget.
But the capital budget is more problematic if only because there are some big bills still to come in — he wants more roads; the Dunedin Hospital will be over $1 billion and $20 billion will be needed for defence re-equipment.
At the same time, he has been critical of Robertson’s relaxation of debt targets.
“I’m not trying to talk in riddles, but I would just say that I think we need to be more careful about debt,” he said.
“It is a low-interest environment, and I totally recognise that but the other side of it is that debt has to be paid back.
“It’s probably more about wasteful spending where I am focussed than debt strictly speaking.
“The Government hasn’t kept a basic discipline about spending, and that’s why there is increased debt.
“I acknowledge there is good debt and bad debt and a household that borrows to pay the mortgage or to keep the husband into his own mechanic’s workshop isn’t necessarily doing a dumb thing, but if the debt is used on pokies or a sports car, it’s not so smart. “
What Bridges may not have taken into account in his proposals yesterday is the potential impact of Corona Virus on the New Zealand economy.
The Prime Minister, Jacinda Ardern, told her weekly press conference that a Treasury report to Cabinet yesterday forecast the consequences of the outbreak could knock up to 0.8 per cent off GDP this year which could take it down to two per cent.
Otherwise, she was dismissive of Bridges’ speech saying growing GDP required a plan and she couldn’t see on in what he said.
He will get that criticism, but he is saying yesterday was only the first part of what will be a regular unveiling of economic policy detail through the year.
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