Debt doesn’t disappear under Labour’s student loan plan

“Promises are only worth the money a political party puts aside to pay for them. Labour has announced the bribe to remove 10% of student debt but can't say how the bill will be paid," says ACT Leader David Seymour.

“Labour is taking debt that is interest-free for New Zealand-based borrowers and shifting the cost onto the Crown’s books. In other words, all taxpayers take on the cost, including New Zealanders who did not receive the benefit of the tertiary education the loans paid for.

“This policy reads like Chris Hipkins asked AI, ‘what will make people like me?’ What he needed to ask was, ‘how will we balance the budget?’

“Labour cannot point to its capital gains tax. It has already said the proceeds of that tax will be ring-fenced for health, while the tax would apply only to future gains and revenue would arrive as affected assets are sold. A new spending promise still needs a credible funding source.

“Paying down debt and returning to surplus is job number one for any Government serious about unlocking New Zealand’s potential. We pay $24.8 million a day servicing the interest on our debt. By the time you have finished reading this press release, another $50,000 will be gone. In 2018/19 it was $10.1 million a day.

“This is the back-to-the-future election for Labour. They’re promising higher taxes, higher spending, more complicated monetary policy, and billions of dollars of promises without showing how the books add up.

“New Zealand cannot afford another government that spends without thinking about the consequences. But the challenge is bigger than locking Labour out. In order to unlock New Zealand’s potential we must keep finding savings year after year by forming a government that is smaller, more efficient, and capable of balancing the books.

“ACT Ministers have driven $14 billion of savings across three Budgets, helping avoid more debt, taxes, and pressure on interest rates. That discipline has helped put the Government on a path back to surplus a year earlier, but it needs to be delivered year on year.

“If we want New Zealand to be the best little country in the world, we need a smaller, more efficient government that focuses every dollar on results. That is how we make life more affordable, rebuild trust in public services, and unlock New Zealand’s potential.”