There's an $11.7 billion hole in Labour's budget
National has taken issue with Labour's alternative budget on several counts, but the biggest and most important is that Labour has not included the extra money it wants to spend in its operating allowance in subsequent years. Steven Joyce claims this is where most of the gap comes from. Several economists have roundly rejected National's claims. Labour finance spokesperson Grant Robertson (left) and leader Andrew Little, at the party's launch of its budget plan. Labour finance spokesperson Grant Robertson with the party's budget plan Photo: RNZ / Jane Patterson Economic commentator Brian Fallow has told Checkpoint with John Campbell that the disagreement over the figures is a matter of interpretation. National's budget includes an $11.7bn operating allowance (essentially, a slush fund of unallocated spending). Labour's is just $4.5bn - but that doesn't mean $7bn has disappeared, Fallow says. Instead, Labour has allocated that money to the budget lines it intends to spend it on - mostly health, education, and increased paid parental leave and other provisions in its Families Package. Total Crown operating expenses are $440bn in National's budget and $448bn in Labour's budget - and the $8bn difference is mostly covered by the $7.4bn Labour gets by cancelling National's planned tax cuts. BERL chief economist Ganesh Nana - whose organisation reviewed Labour's alternative budget - agrees with Fallow's assessment. It is different to the way the National-led government treated the operating allowance, but it is not wrong or a mistake, Nana says: "From an accountant's perspective it makes sense."
Fact or Fiction: Fiscal holes and child poverty
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