Prime Minister unwittingly backs Treasury advice against own policy

Mon, 20 Jun, 2022

“The Prime Minister dropped a spectacular clanger this morning, unknowingly citing the Treasury’s advice against her own policy,” says ACT Leader David Seymour.

“Jacinda Ardern told Breakfast ‘If we’re not careful, and we’re not targeted, we can make inflation worse,’ blissfully unaware that advice applies to the Government’s rushed, last minute $350 a head payment from the May Budget.

“In fact, that’s exactly the advice the Government got about its $350 payment in the Budget. Treasury said:

"A broad-based one-off payment of this magnitude would add to inflationary pressures in the short-term… There are other Government priorities that could be pursued using the funding for this payment, for example, initiatives that more directly impact on interim child poverty targets."

"Inflation has risen over the past year and is expected to be widespread and to persist in the future. This makes a one-off payment a poor mechanism for supporting households with a longer-term problem."

“The one-off payment was not a one-off mistake. As Treasury Secretary Caralee McLiesh has noted, New Zealand had the second largest fiscal response to COVID in the OECD. First was the United States who, you guessed it, are also experiencing killer inflation.

“Altogether, Government spending has risen from $87 billion pre COVID, to $108 billion mid-COVID, to $128 billion in the year to this June. If $41 billion of extra spending is careful and targeted, imagine if Ardern decided to really push the boat out!

“The Prime Minister is halfway to realising what the cause of the cost of living crisis is. It’s time she and her government reined in the spending and stopped the misery for Kiwi families.”