When National opened the books ahead of the election with the Pre-election Economic and Fiscal Update (Prefu), the projected surplus for 2014/15 fell from $372 million to $297 million. In a way, the decrease in the projected surplus was an electoral bonus for National. John Key and Bill English have been painting National as sound fiscal managers, while accusing Labour of spending projected surpluses before they’ve been achieved. The Prefu’s decrease in the 2014/15 surplus allowed National to keep their budget halo intact (“We’re still achieving a surplus as promised!”), while being able to warn that conditions were not so rosy as to allow Labour’s proposed spending increases.
David Parker’s mantra has been that all Labour’s policies were fully costed. He and Cunliffe have been desperate to appear just as fiscally responsible as National, such that Labour (and indeed even the Greens!) were boasting that they would in fact be paying down Government debt faster than National.
Well, the worsening outlook seems to have caught Labour well and truly by surprise, and the fiscal responsibility mantra has thrown the party’s policy schedule into disarray, with $300 million in spending needing to be cut. Labour were to have unveiled seven more policies; six have now been dumped. You have to wonder how the party intends to fill the sudden holes in their campaign schedule, while the Greens are meanwhile gloating that that was why they delayed the release of their plan until after the Prefu.
Just two weeks ago, Labour was promising free doctors’ visits and prescriptions for pensioners. That policy would now be delayed by six months, but it’s a policy that may well come back to bite Labour where it hurts. The policy was lambasted by many on both sides of the political spectrum as being a blatant election bribe to a group that was least in need, given that retirees are just a tiny proportion of those that put off doctors’ visits and/or prescriptions due to unaffordability. When the money was there, the policy could be spun by someone like Rob Salmond as possibly being The Right Thing To Do, but the justifications fade when other policies are being dumped due to lack of funds. It’s bribery, pure and simple, and I’m not sure that even the bribe’s targets, the elderly, are going to get behind the policy.
Since the resignation of Helen Clark as Labour Party leader, SNAFU (situation normal: all fucked up) has been a rather accurate descriptor of the party. Just when they were starting to look on top of things – with uncharacteristically high levels of internal discipline, policy being rolled out, and National on the back foot – along comes the Prefu to return things to Situation Normal.