On The AM Show on Friday, economist Cameron Bagrie said the Government was facing “fiscal challenges” after host Duncan Garner asked if there would indeed be a hole in the years ahead and the Government would need to borrow more.
“When Labour came into power and delivered their plan, they had spending front-loaded but they didn’t leave much wriggle room for the out years or the unexpected,” he told host Duncan Garner.
“Things such as teacher pay, public sector wage demands – I don’t think they factored that in and we know those demands are becoming pretty ferocious and they are pretty expensive.
“So they are going to need more wriggle room for 2021/2022.”
Garner said that had been Joyce’s view.
“He [Joyce] said what they haven’t taken into account are the wage demands or the pay rounds of Labour’s old mates… Joyce was right,” Garner said, to which Bagrie agreed.
“He is going to be right, technically I think his number of $11.7 billion – the real number is going to be a little bit bigger than that,” said Bagrie.
If after 18 months Labour has decided it may need to borrow an extra $15 billion in a possible second term, imagine how much more debt they may then decide they need 18 months into a possible second term. It might be $30 billion.