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Labour and Greens announce budget rules

NZ Newswire logoNZ Newswire 23/03/2017

Labour and the Greens have announced the budget rules they'll follow if they form the next government, which include reducing government debt to 20 per cent of GDP in five years.

The agreement is designed to show voters they'll be fiscally responsible in government and won't argue with each other about spending.

But they retain the right to fight for their own policies, which for the Green Party is expected to continue to include campaigning for a capital gains tax.

Their Budget Responsibility Rules promise the parties will run sustainable surpluses and lower government debt to 20 per cent of GDP in five years.

They also pledge to set up an independent watchdog to keep an eye on spending and make sure the rules are followed.

There's no detail on tax policy other than a promise to ensure the system is fair and progressive.

Labour leader Andrew Little, Finance Minister Grant Robertson and Greens' co-leader James Shaw announced the rules in Auckland on Friday.

They said they would expect any other coalition partner to support the rules.

"Certainly in terms of New Zealand First ... it's certainly open for them to be joining into these rules and from our point of view we have signed up to this as a framework for government, and so that's what we would be looking for anyone who joins our government to be part of that framework," Mr Robertson said.

While both parties are yet to announce their individual tax policies, Labour has said there will be no new taxes until a working group investigates potential changes - which would be put to voters at the following election.

"A capital gains tax will almost certainly be discussed by the working group, it would be ridiculous for them not to," Mr Robertson said.

But Mr Shaw said the Greens' tax policy will be broadly similar to that at the last election, which includes campaigning for a capital gains tax.

"We've never abandoned the capital gains tax ... there's no reason why we would drop that at this election," he said.

Who reigns supreme if Labour and the Greens form a government will depend on the numbers on election night, Mr Shaw said.

WHAT THE GREENS AND LABOUR ARE PROMISING:

* Deliver a sustainable operating surplus across an economic cycle

* Reduce the level of net core Crown debt to 20 per cent of GDP within five years of taking office

* Prioritise investments to address the long-term financial and sustainability challenges facing New Zealand

* Maintain its expenditure to within the recent historical range of spending to GDP ratio

* Ensure a progressive taxation system that is fair, balanced, and promotes the long-term sustainability and productivity of the economy

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