This week's budget will not be a black one Labour leader Phil Goff says, but next year's will be if National and Act form an alliance after the election on November 26.
Mr Goff said Finance Minister Bill English's budget on Thursday is likely to best be described as grey, as it would not tackle the fundamental economic problems the country faced, and would instead just “tinker” with them.
However, if Act leader Don Brash had any say in next year's budget, that one will undoubtedly be a black one, Mr Goff said.
The government's stance that the global financial crisis and the cost of rebuilding Christchurch after the earthquakes were to blame for the the fact that New Zealand was in debt to the tune of about $16 billion did not stack up, Mr Goff said, pointing to the $10 billion worth of reinsurance that will flow back into the country when the time comes to rebuild the city.
On top of that the $14 billion in tax cuts the government implemented were made “at the height of the global financial crisis”, he said, which Mr Key “knew full well” at the time.
Instead, the biggest drag on the economy for the six months following May last year was that “the country went backwards” in terms of economic growth. There was no plan to take the economy forward, he said.
Mr Goff said Labour would announce its economic policy closer to the election.
He ruled out a policy announcement during or immediately after the Labour Party Congress being held in Wellington later this week. “That's not about the release of major policy.”