Jackson says Labour faces danger of being too conservative with spending

Willie Jackson has told a gathering of unionists that a danger always facing a Labour government is being too conservative in terms of spending.

Explaining his perspective, the Labour MP told the Herald today that there is a need to be a “little bit conservative” during a cost-of-living crisis, but MPs also have a responsibility to advocate for their constituents.

He said while those on the right of politics say Labour spends too much, those on the left have wanted more investment.

“This is a tricky time, but our leader [Chris Hipkins] has been very responsible. He’s saying we’re not going change everything, we’re not going to just throw money at everything, but he’s got a job to do.

“We as MPs have jobs to do in terms of advocating for our different constituents. For me, it’s workers. For me, it’s Māori. For me, it’s communities.

“So everyone has their job and no doubt I’ll be negotiating, if we get in, with [finance spokeswoman Barbara Edmonds], with [Hipkins], with Cabinet. That is how it is.”

Asked about Jackson’s comments to the unions, National’s finance spokeswoman Nicola Willis told the Herald that they exposed what she believed were two positions within Labour that “can’t be reconciled”.

“On the one hand, you’ve got a bunch of people who’ve made unfundable promises and just want to spend up a storm and tax up a storm.

“On the other hand, you’ve got Chris Hipkins, who is trying to walk the line and say, ‘oh no, I’m not going to be doing the excessive spending and the excessive taxing’.”

Hipkins told the Herald: “Well, you’ve got to balance the Budget and we’ll be committed to balancing the Budget in our next term”.

Labour MP Willie Jackson says it is a tricky time for the country. Photo / Mark Mitchell

A video shared online by the Council of Trade Unions (CTU) and Public Service Association (PSA) shows Jackson answering a question from a union member about the pace of the change governments can make and whether he had learnt lessons from last term.

The caption on the video reads: “What are the dangers for Labour this election year?”

“Labour MP Willie Jackson spoke to the union movement last week about Labour’s last term, and the factors they’ll have to balance to win in November. Union members need bold action that means all working people thrive – we’re making sure that political parties hear that message.”

In his response, Jackson said, “The dangers I think for us as a Labour government will be always that we’re probably acting a bit too conservatively in terms of our spending sometimes”.

“Sometimes people will say you’re looking very similar to National with how you spend. But at the same time, you unions have to realise we want to be there for a good amount of time. It is just about getting the balance right.”

Jackson told the Herald that while last in Government there “was a lot of pressure on us to put more money, to give more money out”, particularly as a “perceived left-wing Government”.

He said people on the right of policies “say that we probably spent far too much”, but those on the left “say we could have spent more”.

“Certainly, I was a negotiator for the Māori caucus, and I made it very clear that we needed major resourcing and investment in Māori.”

Jackson said now was “a different time” as “we’re in a bit of a cost-of-living crisis”.

“But would I still be advocating for unions and for workers and Māori? Of course.”

He said the party’s base has “to be understanding of where we’re at at the moment”.

Asked whether he thought Labour spent too conservatively last term, Hipkins said there were “areas where I would have liked to see more investment”.

“Other areas where, given the opportunity, we probably wouldn’t do the same thing again. You’ve always got to look back critically on your own track record as well as the track record of your opponents when you are preparing for Government.”

Labour’s fiscal strategy has an objective of having core Crown expenditure and revenue at 33% of the GDP. That expenditure objective is above what National is targeting (30%) and above the current projections for expenses over the forecast period.

During the last Government, core Crown expenses were 28% of GDP in 2019 before jumping to 34.2% in 2020 when expenditure rose in response to the Covid-19 pandemic. It fell to 31.4% in 2021 and then peaked at 34.4% in 2022 before dropping slightly.

In dollar terms, expenses have been rising for the past decade and are forecast to continue increasing.

Labour’s fiscal objectives also include a surplus by 2029/30 using the OBEGAL metric and reducing net debt over time to 20% of GDP.

Jamie Ensor is the NZ Herald’s chief political reporter, based in the press gallery at Parliament. He was previously a TV reporter and digital producer in the Newshub press gallery office. He was a finalist in 2025 for Political Journalist of the Year at the Voyager Media Awards.