The Labour and Green parties are pledging to reduce government debt, and believe there’s enough fuel in the economy to do so without reducing government spending.
Announcing their joint fiscal strategy, or ‘Budget Responsibility Rules’ on Friday, the parties say they would work towards cutting net Crown debt from 25% to 20% of GDP, if elected into government.
While Treasury forecasts suggest the Government is on track to reaching this target in three years, by mid-2020, Labour and the Greens are giving themselves five.
Speaking to interest.co.nz in a Double Shot Interview, Green Party co-leader James Shaw, discusses how a Labour/Greens Government would reach this target while keeping core Crown spending at 30% of GDP.
“The economy is currently going through an expansionary phase, so there is actually a bit more cash available. These are the surpluses that Bill English has been banging on about for some time,” Shaw says.
“We also want to restructure some of the existing spending commitments. Some of things we want to do – we think don’t necessarily need to add on anymore into government spending…
“We are looking at revenue options as well.”