Election 2020: Grant Robertson and Paul Goldsmith head into Stuff Finance Debate with everything to play for

The Finance Debate will be livestreamed on Stuff from 7pm tonight.

Tonight, the two men vying to be finance minister after October 17 will face off in the Stuff Finance Debate.

In ordinary times, the debate would be important enough: each side would give their accounts of debt, economic growth and deficits: but there would usually be surpluses either here in the present, or on the not-so-distant horizon. Covid-19 has changes that completely.

Now the real debate will be about which major party – and which potential minister – has the plan to grow New Zealand out of what will be a long coronavirus slump.

The Finance Debate will stream live on Stuff tonight.


The Finance Debate will stream live on Stuff tonight.

* Election 2020: Grant Robertson and Paul Goldsmith have plenty to prove in Stuff Finance Debate
* Election 2020: National tries to deal itself in, but Jacinda Ardern has all the momentum
* Tax cuts at a cost in Paul Goldsmith’s mother of alternative budgets

Given the lockdown smashed economic growth to the tune of 12.2 per cent in the last quarter – much less than expected – the economy will grow, and we will be officially out of recession next quarter.

But the overall size of the economy will have contracted.

International tourism is clearly the worst-hit sector and won’t be coming back any time soon to what it was before. If a travel bubble with Australia opens in, for example, in the next six months, that will help. But there are big questions about that.

More generally, the debate will likely focus on which plan to rebuild and stimulate the economy Kiwis are more comfortable with.

The original centrepiece of Labour’s plan – which was basically backed by all parties in Parliament – was the wage subsidy. As that runs out, the focus now turns to the next phase.

Are Kiwis keener on a big temporary tax cut to get the economy humming as proposed by Paul Goldsmith, or the more state-led approach of building big works and using the opportunity to create new infrastructure as pledged by Labour?

National also backs lots of new public projects, but whose plan will be the most widely accepted, is the question.

Labour is proposing a new 39 per cent tax on income earned over $180,000 and no other tax changes, National is proposing its temporary tax cut, which will see all of the tax thresholds reduced for 16 months.

Paul Goldsmith is running on tax cuts, Robertson on a small tax increase.

Paul Goldsmith is running on tax cuts, Robertson on a small tax increase.

Neither party is proposing any structural change to the tax system.

There’s also the question of climate change. It’s not just an immense environmental challenge, but an expensive fiscal one too, one that will start to hit New Zealand’s finances before too long.

Treasury’s Pre-election Fiscal and Economic Update is a sea of bad numbers and grim indicators. The only number that looked like it would defy economic gravity would be house prices.

In a frontier economy such as New Zealand, the ability to own a house and pay it off during a working life has been a bedrock of economic independence, and protection against poverty in old age.

But as central banks around the world – included the Reserve Bank of New Zealand – engage in quantitative easing and cheap money policies, assets such as housing continue to blow up.

What the finance spokesmen intend to do about that will be key.

But overall, the most important thing for most people will be how the government funds and improves crucial public services, while also creating an economic environment where the vulnerable are protected, people can get ahead, pay packets go up and unemployment comes down.

That, in a nutshell, is what being finance minister is all about.

The Finance Debate will be livestreamed on Stuff from 7pm tonight.

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