Media Release: “The Deficit Diaries: Six years of red” unveils Labour’s fiscal miscalculations

Dr Oliver Hartwich
Dr Bryce Wilkinson
26 September, 2023

Wellington (Tuesday, 26 September 2023) - As we approach the 2023 election, New Zealanders must learn from the overly optimistic projections presented by Labour before the 2017 election. New Zealand cannot afford a repeat of this fiscal recklessness.

The New Zealand Initiative’s latest research note, written by Dr Bryce Wilkinson and Dr Oliver Hartwich, analyses Labour’s six-year fiscal record.

The report shows that:

  • Labour's fiscal projections before the 2017 election were too optimistic, resulting in a $18 billion discrepancy between intended and actual expenditure by the end of 2019.
  • Jobseeker Support recipients rose by 24,000 between December 2017 and December 2019. Treasury predicts a minimum of 189,000 recipients through to 2027, nearly 70,000 more than 2017. (see graph below)
  • The Government has not reduced spending to pre-Covid levels. PREFU 2023 forecasts show spending through 2024-2027 will match 2020, the first Covid year in NZ.

Dr Bryce Wilkinson notes, “This research reveals the dangers of taking rosy forecasts at face value. The PREFU 2023 data is a wake-up call; Labour’s future spending plans show no sign of fiscal restraint, especially when debt repayment should be a priority.”

Dr Oliver Hartwich adds, “The fiscal challenges we face are no small matters. It’s about the quality of life for New Zealanders now and in the future.”

As we near the 2023 election, the pressing task is not to fulfill grand promises but to bring our fiscal house back in order.

Dr Wilkinson and Dr Hartwich stress that New Zealand needs better policies, not just more spending.

The full report is available to download from the New Zealand Initiative's website here.

Dr Bryce Wilkinson and Dr Oliver Hartwich are available for comment. To schedule an interview, please contact:

Jamuel Enriquez, Marketing and Communications Manager
P: 021 022 34451
About The New Zealand Initiative

The New Zealand Initiative is an evidence-based think tank and research institute contributing to public policy discussion.

Supported by the nation’s leading visionaries, business leaders and political thinkers, we are committed to making New Zealand a better country for all its citizens with a world-class education system, affordable housing, a healthy environment, sound public finances and a stable currency.  |  Subscribe to Insights, our weekly newsletter

Stay in the loop: Subscribe to updates