Chris Hipkins has fired back at the Finance Minister's claim Labour mismanaged the books, saying they're "absolute fiction" and the new Government is looking to blame anyone but themselves for their numbers not adding up.
During the new Government's first post-Cabinet press conference on Monday, Nicola Willis accused the previous government of finding "workarounds" to hide the scale of short-term funding.
Willis said Labour broke the "spirit of the law" to disguise the state of the books and is looking to make changes to the Public Finance Act to safeguard against this.
"In some cases, this practice is extremely disingenuous. This is because it makes the books look better in future years even though it is highly unlikely ministers genuinely intended to stop funding those programmes," she said.
Prime Minister Christopher Luxon also said Labour shouldn't be able to govern for a "generation" because of its economic mismanagement.
"There has been economic vandalism on a scale we haven't seen before because we have had economic incompetence from a Labour Government and it should actually put them out of business of governing New Zealand for a generation," Luxon said.
Hipkins, the Labour leader, appeared on AM on Wednesday morning and was asked about the comments by Willis. He told the show they're "complete nonsense".
"It's just absolute fiction. I mean, the Pre-Election Economic and Fiscal Update (PREFU), which is released before every election, sets out in great detail what the Budget is for, which projects are time-limited, which projects have the potential of cost overruns," he said.
"Bearing in mind this is not new. In 2017 when we became the government, we found that a number of their projects had been time-limited as well, a number of their fiscal risks, so a number of the costs of things that they'd committed to had gone up. That is the nature of the economic cycle we're in at the moment."
Hipkins said the "big challenge" Willis is facing is the promises she made in the election campaign are unaffordable.
"We said at the time they were unaffordable. They've now come to the realisation they're unaffordable and they're trying to blame anyone but themselves," Hipkins said.
Willis also accused the Labour Government of "fiscal cliffs" - where policies are expected to continue but aren't budgeted for beyond a date to make the books look better.
The examples Willis provided were food in schools and Pharmac. The food in schools programme was originally a pilot and was given short-term funding rather than permanent.
But Hipkins hit back at those claims by Willis saying it's "absolute nonsense".
"She seems to have a problem with time-limited funding in areas where the National Party in their own fiscal plan had provisioned for," he said.
"So, for example, the food and schools program. We set that up during COVID, we've been funding it on a year-to-year basis, it's been very successful. We indicated in our manifesto that we were going to continue funding for that. So did the National Party.
"So for her to now say, 'Oh, this is a terrible travesty, they should've had funding set aside for it over the longer term', they knew before the election that we didn't, they'd made a provision for it in their plan, we made a provision for it in ours. Nicola Willis is trying to rewrite history and she's doing it for one simple reason - she can't make her numbers add up."
Watch the full interview for more.
