NZ Election 2020: Jacinda Ardern slams Paul Goldsmith's 'ridiculous and desperate' claim of $10bn gap in Labour's financial plan

Labour leader Jacinda Ardern has slammed National's Paul Goldsmith over his "ridiculous and desperate" claim of a $10 billion gap in Labour's financial plan. 

Goldsmith, National's finance spokesperson, has pointed out that Labour's fiscal plan hasn't included costings or funding for two expensive election promises, pumped hydro and light rail from Auckland CBD to the airport. 

"Pumped hydro has estimates starting at $4 billion. Yet there is no mention of it in Labour's pamphlet. Labour can't have a policy targeting 100 per cent renewable electricity by 2030 without a clear plan to get there and how it will be paid for," Goldsmith said. 

"Labour's also promising to reboot its failed light rail project, which has been estimated to cost at least $6 billion... This is at least $10 billion worth of projects that will have to be funded but Labour hasn't included in its numbers."

Ardern has rejected Goldsmith's comments as "absolutely ridiculous and desperate". 

"I don't think anyone actually thinks that is a logical argument that a project that hasn't completed a business case even should be included in a plan. If that is his logic, then he actually just dug his hole even bigger," she said on Friday. 

"I unfortunately do think it is a result of obviously trying to detract from what are legitimate holes. They themselves have acknowledged the first $4 billion; the second $4 billion, they have not yet told us how they're going to plug that hole - and so yes, unfortunately, I do think it's a decoy."

Ardern was referring to Goldsmith admitting to miscalculating how much it would save from cutting NZ Super Fund contributions, because he used out-of-date figures, resulting in a $4 billion fiscal hole.  

Newshub revealed National made the same mistake with its capital allowance, resulting in another $88 million shortfall, and National has since corrected its financial plan to reflect both errors. 

Goldsmith has admitted to not accounting for the loss of tax paid by the Super Fund, and despite that being worth near-on $2 billion, he has insisted there is no further fiscal hole. 

Labour leader Jacinda Ardern speaking to reporters in Auckland.
Labour leader Jacinda Ardern speaking to reporters in Auckland. Photo credit: Getty

National also continues to dispute claims that it double-counted transport funding. 

It allocated $3.9 billion of transport funding under the NZ Upgrade Programme, but that money no longer exists under that umbrella as it was transferred by the Government at the start of the year into a more general transport fund. 

National is accused of allocating money from the NZ Upgrade Programme which no longer exists, as well as the money in the more general transport fund, and so has double-counted. 

But Goldsmith rejects the accusations because the plan still adds. He said National would plug it by spending of the future earnings of the National Land Transport Fund (NLTF), which raises about $4 billion each year from fuel taxes and road user charges. 

NZIER, or the New Zealand Institute of Economic Research, has independently reviewed National's plan and says there is no double-counting in it. 

"Our assessment remains that the National Party's plan is fully funded."

But Labour's finance spokesperson Grant Robertson says National's fiscal hole is now $8 billion and that Goldsmith is trying to "cover" his error by taking money from the NLTF. 

Goldsmith wants to know why Robertson has a problem with using the NLTF, and assumes Labour won't be using it to fund its projects. 

National's finance spokesperson Paul Goldsmith.
National's finance spokesperson Paul Goldsmith. Photo credit: Getty

"Labour won't fund light rail through the National Land Transport Fund given Grant Robertson has accused National of 'raiding' the NLTF to pay for some of our own ambitious transport package."

Labour has been dealing with its own blunder, after it released its economic plan on Thursday with a $140 billion typo, due to an error in a graph where it should have shown debt as a percentage of GDP rather than in dollar terms.  

Before Labour released a fixed version of it, the plan showed about $56 billion of debt in 2025-26, despite the Government starting off the COVID-19 crisis with about that much debt. In reality, debt is expected to reach more than $200 billion by 2024. 

Goldsmith said Ardern should tell Robertson to "rip up" his plan and create a new one, but Ardern said she would not be doing that. She said it was "ridiculous" to suggest Labour had lost its economic credibility because of a typo. 

Ardern has also called on Goldsmith to scrap his fiscal plan and start from scratch.  

The latest Newshub-Reid Research poll found that most voters - 55.1 percent - trust a Labour-led Government under Ardern versus 34.9 percent who trust a Government under Collins while 10 percent were undecided or didn't know.