National's debt reduction target lacks ambition - economist
Economist Brad Olsen has criticized the New Zealand National Party's debt reduction targets as lacking ambition. While acknowledging the focus on fiscal discipline, Olsen argues that the proposed goals are too similar to current strategies and fail to address the need for a larger economic buffer.
Why it matters
The critique highlights the ongoing debate regarding national fiscal policy and economic resilience ahead of the upcoming election.
National's debt reduction target is the least ambitious it could possibly be, says a leading economist.
If it is returned to power after November's election, National will introduce three "budget responsibility rules" : returning to surplus in 2028/29, reducing debt below 40 percent of GDP and lowering government spending towards 30 percent of GDP over time.
Leader Christopher Luxon said if the government's books were not in order, the country was vulnerable to economic shocks.
He criticised Labour during Sunday's announcement, blaming the former government for racking up debt as it tackled the Covid-19 pandemic, and eroding a buffer that was necessary for dealing with the next major shock.
Infometrics chief economist Brad Olsen said National's focus on fiscal discipline was encouraging, but it was simply committing to continuing the coalition's current fiscal strategy.
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