National's Nicola Willis is on the attack over Labour's fiscal plan, labelling it fraudulent, and claiming some former Labour finance ministers would be ashamed and disappointed.
By Lauren Crimp of RNZ
Labour says the plan it released on Sunday is responsible and pays for all its election promises.
Meanwhile, an economist says every party's plan will have holes and complicated trade-offs.
RNZ laid out National's claims about the plan and how Labour has defended them.
Follow our live updates on today's campaign developments here
No specific cost for restoring pay equity scheme
This is the biggest argument of them all.
Labour's fiscal plan does not specify the cost of restoring the full pay-equity legislation, which boosts pay for women who can prove they're underpaid compared to men. The coalition government has significantly pared back the scheme.
The plan does include $2.5b to give a $4/hour pay rise to 65,000 care and support workers, whose claim was axed, when the government pared back the scheme.
National says Treasury estimated restoring the scheme would cost $11 billion, leaving Labour $8.5b short.
National’s finance spokesperson told Breakfast Labour was avoiding fronting up over its election promises. (Source: Breakfast)
Labour doesn't want to undermine negotiations by putting a number on it, but says it has enough headroom with $10.5b in unallocated funding.
Willis says that means pay equity would soak up most of Labour's unallocated funding for the next four Budgets, "which means nothing more for schools, police, prisons, defence and other frontline social services".
It is worth noting Willis has also not revealed how much she would set aside for settlements under the coalition's pared-back scheme.
She uses the same argument - not wanting to show her hand - but insists the costs are accounted for.
Fuel tax and the public transport fare cap
Willis says Labour has not included the cost of freezing fuel tax and road-user charges for three years, which she puts at $3.1b, nor its public transport fare-cap policy, which Labour previously indicated would cost $260 million.
It is true that they're not included as line items.
Labour says that's because they'll be paid from the National Land Transport Fund - revenue from petrol tax, road-user charges, registration and licensing, which pays for roads.
"The National Land Transport Fund is not generally part of fiscal plans that other political parties release," said finance spokesperson Barbara Edmonds.
Labour says the fuel tax would use about 1% of the fund and Hipkins has previously said his government would "scale" NLTF investments to fit the funding available.
Willis says National fully costed its fuel-tax freeze in its 2023 fiscal plan.
The party said all of its commitments are "fully costed and fully funded". (Source: 1News)
Dividends of Future Fund companies
If elected, Labour will establish a Future Fund to invest in New Zealand businesses and infrastructure, seeded with the dividends of selected state-owned assets, and a $200 million Crown capital injection.
It refuses to say which assets would be included, citing commercial sensitivity and saying it must wait to be in government, because only then can it receive proper advice.
Willis argues Labour should have accounted for a $2.8b loss of dividends from companies included in the Future Fund, because that money would otherwise be invested into government services.
National assumes Labour will include the biggest dividend payers - Genesis, Mercury, Meridian, Air New Zealand and Transpower.
Edmonds says Labour would determine what goes into the fund when it's in government and account for any dividend impact then.
Health cost pressures and guaranteeing graduate nurses jobs
Labour's plan increases funding for health cost pressures, that is rising costs due to inflation and population changes, each year for three years - but not the fourth (2030/31).
Willis says that means it has left $1.5b unfunded. She promises National would deliver an uplift each year.
Hipkins says Labour's plan to give everyone three free GP visits would have a huge flow-on effect on health cost pressures.
"When you've got people in hospital emergency departments costing thousands of dollars a night to accommodate, because they couldn't afford to go and see their doctor, and get the medication they need to avoid ending up in hospital in the first place, that is a major easing of the pressure that our health system faces," he said.
Labour also guarantees every graduate nurse a job at a cost of $526 million.
National says Labour has not included that in its plan, but Labour is clear it would be paid for from health cost-pressure funding.
Willis says, if Labour did that, "every single other deliverable in the health service would be compromised", because cost-pressure funding was meant to keep hospital lights on, and keep up with an ageing and growing population.
'Here we go again' with fiscal hole debate
In many ways, Labour and the National-led coalition are largely on the same track.
The government's pre-election economic and fiscal update (Prefu) forecast a return to surplus by 2028/29 and shrinking spending as a share of GDP to 29.8% by 2031.
Labour has forecast the same return to surplus and plans to bring spending down to 30.4% of GDP.
The government's 2026 Budget included a $2.4b annual operating allowance, that is extra spending on new initiatives, and Labour is budgeting for the same.
Yet: "here we go again, we're going to go through a big debate about fiscal holes", independent economist Cameron Bagrie said.
"Realistically, it doesn't matter which political party you look at, there's going to be gaps, there's going to be challenges, there's going to be some pretty complicated trade-offs.
"You don't go from a big deficit to a big surplus and turn the debt curve down, unless you're driving some pretty hard levers."
Bagrie said voters had to consider a simple trade-off.
"What do you want? Do you want a well-functioning healthcare system and education system, and what are you prepared to pay in regard to tax for that on the other side, because there's no free lunch."
He addressed some of the major arguments between Labour and National.
On pay equity, he said no party would commit to pay-equity costs up front, "because then it becomes open season".
Bagrie also argued each offered insufficient funding for roads and were punting the problem by not hiking fuel taxes. Labour's freeze is for three years, National's is for one.
"No-one's prepared to take a stand and put the rates up, because, of course, it's election year," he said.
"All that's going to take place is that we're going to walk into reality in about 2028 and realise there's a gaping hole, and it doesn't matter which side of the political fence that you look at, but they're all pretty well the same."
That, Bagrie warned, would create literal holes - potholes - on crumbling roads up and down the country.
The morning's headlines in 90 seconds, including Willis questions Labour’s commitments, and two people are hospitalised after a West Auckland incident. (Source: Breakfast)
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