“We’ve actually done okay,” is how Labour’s Grant Robertson introduced Labour’s economic track record through the pandemic, inflation, and extreme weather of the last years.

But National’s Nicola Willis retorted with “okay isn’t good enough”.

The economic credentials of the four biggest parties is on show tonight at the ASB Great Debate in Queenstown.

Labour’s Robertson, National’s Willis, Act’s David Seymour and the Greens’ James Shaw will argue the relative merits of their respective plans for the economy while trying to dent the credibility of their opponents.

It is usually a loud and lively affair with a very engaged audience who have submitted questions for the speakers. The loudest cheers at the beginning, giving a flavour of the audience, were for Willis and Seymour.

Tonight’s debate started at 7pm and is moderated by TVNZ’s Jack Tame.

Front and centre was National’s proposed tax package, Labour’s economic record through the pandemic and natural disasters, Act’s plans to cut billions of dollars in funding to the public service, and the Greens’ wealth tax to fund, among other things, a universal basic income.

Robertson started by rattling off statistics about unemployment and the level of public debt, which provoked some scoffing from the audience.

He said Labour would grow jobs and invest in infrastructure and, in a jab at National’s tax package, he said Labour would “fully cost everything we do”.

He defended Labour’s spending above and beyond anticipated amounts by saying it was necessary to respond to events like the pandemic, which most political parties supported.

“Now is the time to bring spending back down to normal levels ... that’s the direction we’re now on.”

Willis said New Zealand was in its third year of a cost-of-living crisis, as interest rates push mortgages into unaffordable territory.

She said government debt has ballooned to $74 billion, projected to exceed $100b.

She said government spending had increased so much but only ram raids had gone up.

Certain government departments would have to tighten their belts by 6.5 per cent of savings.

Labour's finance spokesman Grant Robertson. Photo / Michael Craig

Seymour said the country needed “more than a slight change in direction”

He said there had been a massive increase in government spending yet hospitals and schools and public safety were all going backwards.

He wants to make 15,000 public servants “as fast as possible”, turning the number of public servants from 62,000 full-time equivalents to 47,000, the same number in 2017.

He said you’d expect Wellingtonians to be against such a cut but some public servants tell him “we hope you fire that guy in the next cubicle”.

Robertson said events such as the FIFA Women’s World Cup would be gone under Seymour.

“The winter games would stay,” came a retort from the audience.

When Robertson continued, Seymour asked whether the audience was going to shoot the next one down.

National deputy leader Nicola Willis. Photo / Alex Burton

Robertson said taking GST off fruit and vegetables, which he was previously opposed to, was only one part of Labour’s plan to help with the cost of living.

The debate follows a report this morning that said the National Party’s new tax proposal on foreign buyers was unlikely to raise the revenue it expects to use to fund tax cuts.

The report - by economist Sam Warburton, former Reserve Bank head of financial markets Michael Reddell and Corelogic head of research Nick Goodall - modelled three different scenarios that had revenue estimates well below the more than $700 million in revenue National says it will raise from the policy each year.

The different scenarios would leave a hole between $453.7m and $526.8m a year - up to $2.1b over the four-year period.

National has released some of the basic assumptions behind its numbers and a summary from economics consultancy Castalia, but has refused to release the modelling behind its numbers.

Willis said you’ll get six economists in a room and get seven different opinions.

She said real estate agents have told her there is “huge demand” for luxury homes in New Zealand.

Robertson: “Release the costings.”

Willis said National looked at where houses were sold before the foreign buyer ban, where they were sold, and then projected 1600 to 1700 homes at an average cost of $2.9m.

ACT Party leader David Seymour in Henderson to announce the party's Law & Order policy New Zealand Herald photograph by Jason Oxenham 13 September 2023

Seymour was widely applauded when he said he was astonished he was in a debate where National was arguing for a new tax and Labour was against it.

“This applause doesn’t come off my time, does it?” he added.

“I don’t think it matters,” he said when asked if National’s tax package was credible.

“I haven’t seen their workings. Spending is not the issue. New taxes are not the path to prosperity.”

He said he thought Robertson was running away with the books. “I didn’t think Grant could run that fast.”

Act will release its fiscal plan next week.

The Greens’ wealth tax was received with loud booing.

Shaw said it was curious that the Greens wanted more income tax cuts than National.

He sensed that the public didn’t care whether National’s tax package added up. They just wanted the tax cuts.

He said it was wrong for National to take the climate change money from polluters and use it for tax cuts.

Willis goaded Robertson saying he was jealous because Robertson had been working on a wealth tax for six months. Robertson retorted that it took a while to get the numbers right, “something you might want to take on”.

Tame asked Robertson about telling the Reserve Bank to keep inflation low while supporting maximum sustainable employment, which he said seemed like telling someone to eat ice cream constantly and lose weight.

“Bad person to ask that,” Robertson quipped before saying many other countries’ central banks did the same thing.

The ASB Finance Debate in Queenstown with l-r: David Seymour, leader of Act, Labour's Grant Robertson, Jack Tame, National's Nicola Willis, and the Green's James Shaw. Photo / Derek Cheng

Economists have also slammed Labour’s key policy to take GST off fruit and vegetables. Robertson said it was only one a number of policies to address the cost of living.

Robertson said R+D support, infrastructure spending, investing in skills and apprenticeships, sector support including renewable energy would all turn the productivity dial.

Willis said private funding, such as the NZ Super Fund, needed to be used for infrastructure. Robertson said the NZ Super Fund was already involved in infrastructure at the moment.

Seymour said it wasn’t about government, but private start-ups. There were too many walls for foreign investment, and the regulatory environment had to support new ideas like agricultural genetic technology.

“Talented people have to leave this country to do experiments outside the lab because we are so far behind.”

Shaw said Act wanted to get rid of the Zero Carbon Act and take the country back 30 years.

Asked what the bright line test and interest deductibility changes would do to house prices, Willis said: “I don’t know what it would do to house prices.”

The average house price in Queenstown is $1.7m, and even though National’s foreign buyer tax would come in at $2m, Willis said it wouldn’t affect house prices in Queenstown.

Increasing supply was the main factor in house prices, she said, which Robertson and Shaw and Seymour also said.

All three bar Willis committed to re-zoning the accommodation supplement. Willis said it needed to be looked at but also it needed to be consistent for the whole country.

Green Party co-leader James Shaw. Photo / Te Ao Māori News

This week the Government opened its books in the Pre-election Economic and Fiscal Update, or Prefu, which showed no forecast recession, a return to surplus in 2027, economic growth at an average of 2.6 per cent in the next four years and wages growing at 4.8 per cent a year - faster than inflation.

It showed there was enough money to keep the lights on, but undertaking ambitious spending commitments or responding to another crisis would require serious trade-offs.

Willis said it showed a Government addicted to spending that had left the cupboards bare, while Robertson claimed it showed responsible economic management.

The Crown’s tax revenue for the year to June was $2.9b lower than forecast in May, leading to a Government deficit of $10b - $3b more than anticipated.

Treasury noted how the Government has spent more than anticipated in recent years. If the Government spends $1b more in Budget 2024 than planned, there would not be a return to surplus over the 10-year projected period.

Derek Cheng is a senior journalist who started at the Herald in 2004. He has worked several stints in the press gallery and is a former deputy political editor.