Finance Minister Grant Robertson says there are three key factors to the "balanced plan" he is putting forward to help the New Zealand economy recover from the devastation of the COVID-19 pandemic.
On Wednesday, the Pre-Election Economic and Fiscal Update (PREFU) was released - and it wasn't pretty reading.
While the Government is spending less on COVID-19 than previously expected and unemployment isn't expected to peak at the heights forecast in May, the dole queue is still expected to blow out to 279,000 people and net core Crown debt to GDP predicted to hit 55.3 percent by 2023/24. That's still far lower than what many other countries are seeing.
The Treasury expects GDP to drop by 16 percent in the June quarter.
The ballooning of Crown debt comes as the Government spends up large on several schemes aimed at cushioning the blow of COVID-19, including its wage subsidies that have paid out more than $13 billion since March.
"We did have to borrow a large amount of money to support New Zealanders through COVID-19 and the reality is that it will take a long time for us to pay it back. But we have got to have a balanced plan to do it," Robertson, the Labour Party finance spokesperson, said.
He told The AM Show there are three key factors to that plan - continuing to fund critical public services, growing the economy and using the tax system to support that.
"It is a balance of all of those factors… being careful with our spending, making sure that we do grow the economy sustainably - and we do have a plan for that - and, as we have committed, using the tax system to have those top 2 percent of earners pay a little bit more.
"All of those things together will get us through this. But a short, sharp, shock approach, the austerity approach, it doesn't work. It actually does more damage in the long-run, in my view."
Part of the plan the Labour Party has put forward is creating a new top tax threshold for income over $180,000. It would be taxed a rate of 39 percent as opposed to the current rate of 33 percent. However, some have said that doesn't go far enough.
Labour's finance spokesperson says he would be a "careful manager of our books" if the party is re-elected.
"We reduced our debt down under 20 percent, which has put us in a position to be able to deal with the situation we have got now. I am going to carry on my commitment to be a careful manager of our books, but I am not prepared to sacrifice services like health or education, or dignity and retirement, for New Zealanders," he said.
Robertson has been critical of National's desire to get debt down to 30 percent of GDP in around a decade, saying it would require sacrificing spending on a number of services.
National's planning to release its alternative Budget this week, but has previously said it doesn't want to cut critical spending.
The party's finance spokesperson Paul Goldsmith earlier this year suggested suspending new payments to the Super Fund, referring to it in July as "nice-to-have spending"
"An obvious place to start is suspending new payments to the New Zealand Super Fund for the next four years. That alone would reduce core crown debt by $9 billion over four years."
When in Government last, National stopped payments to the fund, but Robertson has described that as being "short-sighted".
Following PREFU on Wednesday, National leader Judith Collins said Robertson "shouldn't try to sugar coat" the figures.
"He has taken a rose-tinted glasses view at a dreadful picture that cannot be described as anything other than catastrophic. Any short-term improvement on the Budget forecasts is far outweighed by the worsening picture past 2021."