The Finance Minister says he's got a balanced plan to reduce debt and keep services going, despite concerning unemployment forecasts.
The government's books have been opened ahead of the election today... and they show a bleak outlook, with unemployment set to rise to 7.8 percent in the first quarter of next year, while GDP continues to shrink.
Grant Robertson told RNZ he's not gilding the lily, and there will be tough times ahead for New Zealanders.
He told Checkpoint that with all the uncertainty it's unrealistic to make any promises of where the country's debt rate should be.
"At the moment, in the conditions we're in, making those kinds of promises isn't actually responsible; what I know is that over my time as Finance Minister I've shown that I have been disciplined, we've reduced debt to under 20 percent. I remain committed to keeping debt under control.
"But given where we are in this pandemic, what we can best do is set the pathway that we have and work together to keep debt under control and keep those public services. More will emerge over time as we get clearer on how the pandemic affects the economy globally, but we will have higher levels of debt and a deficit for some time to come, and I have been saying that since March of this year."
As of tomorrow, the country will officially be in recession (two consecutive quarters where the economy declines). So what more can Robertson and Labour do in this next term to correct that - given they've promised not to hike income taxes except for the already- announced top 2 percent of earners?
"We've already got a programme we've outlined of a massive investment in infrastructure to build more houses, to be able to create jobs right across the economy, we're going to be supporting people into work through the extension of the flexi-wage programme," Robertson says. "We're also supporting small businesses to be able to thrive and move online, we've got a host of programmes that are about that.
"But then we're also looking to the future with industry transformation plans. We're in there now with the agricultural sector, working on an agri-tech strategy that will lift the value of the wages in that sector. We've got a similar one in construction, and in the digital area.
"We have to lift our productivity, we need to be more sustainable, that's why we're heading towards a 100 percent renewable electricity strategy, and backing that up with investments in new technology, like the hydrogen economy which actually will lead to export earnings, and will lead to better jobs with higher wages.
"All that's part of our five-point economic plan. The tax part of the equation is only ever part of the equation, and yes we are asking high income New Zealanders to pitch in a little bit more. When we put all of that together that is a steady path for New Zealand to sustainably grow the economy and manage debt. But when we're facing a one-in-one-hundred year economic shock there's no single silver bullet - anyone who's trying to sell you that isn't being realistic. I think today we've seen a pathway forward from here that is realistic."
So, if Labour aren't relying on rising taxes for most, if re-elected, then what cuts will they make to keep spending low? In the weekend they announced the cut of future years of the fees free programme] for tertiary students... but what else will be on the chopping block?
"There's a number of areas where we're going to have to be very careful with our spending, and fees free's an example. We also have already focused on another example - funding low income people to reduce the cost for them to go to the doctor, but not having the policy that we went to 2017 with: an overall reduction.
"So we've been showing our willingness to do that, but actually it's about investment more than it is about cutting things. We need to strongly invest in the productive side of our economy and support those quality public services, because that's actually what enables us to come through this shock with new zealanders healthy, but also prosperous.
"So yes, there'll be areas where we'll look to make sure our spending is of the highest possible quality, but actually investing in our people and retraining in our skills and investing in our business and industries will get us through this better than anything else."
Labour set aide a $14.1 billion Covid-19 fund. But the catch is we don't know how much of that will be needed to fight the disease. So how much of that will be committed to funding the election promises Robertson is talking about?
"For the vast bulk of that, it's there to be used if it is needed to help with Covid recovery, to deal with resurgences, like we've just seen. And we need to be careful about that - it will not be spent unless it is needed.
"So we continue to be disciplined about that, but obviously the world does not know where the Covid journey ends. So that money remains available to us, but we will very carefully and judiciously use it in Covid-recovery."
Has any of that $14.1 billion Covid-19 fund been allocated to election promises already?
"A small amount yes, where it directly relates to Covid recovery," Robertson says.
"We announced the Training Incentive Allowance policy at the weekend, which is about supporting people during a difficult period, who are out of work, to be able to get qualifications. And the extension of the Small Business Cashflow Scheme - which again is a direct Covid response. So there are some areas where we are committing it to elements of what our election policy is about. But the vast bulk of it remains on the table to deal with the future of Covid, which nobody can be certain about.
Entrepreneur Nick Mowbray, of Zuru toys, has called for large corporates who got the government wage subsidy to pay it back if they're still turning a profit and paying dividends. What does Robertson think - should they do so?
"They don't have to, because we set the scheme up in such a way that it was designed to give confidence and cashflow; it was designed to make sure that people weren't laid off. Obviously the criteria was that people had to stay employed, so it was about keeping that attachment between an employee and an employer.
"Some businesses have decided to pay back because things didn't turn out the way they forecast they might. But for me it was far more important to get that money out, to give that confidence to ensure that people weren't laid off unnecessarily. I can't guarantee what a company would have done regardless of whether or not they're a wealthy company or they're now turning a profit. If people look into their own conscience and decide that's what they want to do that's a good thing, but they're still obeying the rules of the scheme if they don't do that."
So, with no clawback over those companies who didn't need the subsidy to stay operational, was a catchall wage subsidy clever, given the cost adds to the national debt?
"It was a no regrets approach," Robertson says; "I can't guarantee what those companies would have done, they may well have ended up laying people off regardless of whether they ended up turning a profit.
"We wanted to protect New Zealanders' jobs, and 1.7 million New Zealanders' jobs have been protected through the wage subsidy scheme.
"We wanted to deploy it quickly, and I think people appreciated that. So yep, with 2020 hindsight there's all sorts of things that we can say, but I remain very comfortable and proud of that scheme, because it did its job to keep New Zealanders in work."