The $30 billion Covid splurge on non-Covid projects

Nicola Willis wrote:

Chris Hipkins has let the truth slip about Labour’s Covid spending.

On Newstalk ZB yesterday he admitted the Labour Government would have gone ahead with many of its spending decisions even without the cover of the pandemic.

That matters, because the Covid Royal Commission found about half of the $60 billion spent in the name of the pandemic went on unrelated programmes and projects.

Both the Royal Commission and Treasury say that spending pushed up the cost of living and government debt.

In other words, the pandemic became a convenient excuse to spend taxpayers’ money on things Labour wanted to do anyway.

And if Labour, the Greens, and Te Pāti Māori get another chance, they’ll do it again: borrow more, spend more, tax more.

This is a very important point. They used the tragedy of a global pandemic to raid taxpayers pockets for a spending splurge. They spent $30 billion meant for Covid-19 recovery on every pet project they had. This meant that National inherited a permanent structural deficit, and increasing debt.

Now as we face a potential oil crisis due to the Iran conflict, the Government has less ability to cushion us from this global shock, because of what Hipkins and Robertson did.

They promised in 2017 to keep spending below 30% of GDP. I thought 28% would have been a better cap (our long-term average) but hey both Labour and Greens said they would cap it at 30%, and I could live with that.

They used the excuse of Covid-19 to load an additional $30 billion of non-covid expenditure onto the books, and blew spending up to 34% of GDP – a level way way in excess of our tax take. It was an act of economic sabotage that leaves us today much more vulnerable to the Middle East crisis that we would have been.

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