Watch: PM on public sector underfunding

Prime Minister Jacinda Ardern has warned underinvestment by the previous National government was more widespread than was expected.

Watch Jacinda Ardern on Morning Report:

The government is indicating they are going to drip feed stories of in the run-up to next month‘s Budget.

She had warned the coming Budget was going to be focused on rebuilding and reinvesting in core services.

National said Labour was already looking for scapegoats, with finance spokesperson Amy Adams saying the reality of being in government was there are always going to be cost-pressures and unexpected events that have to be paid for.

“The penny is finally starting to drop and rather than admit they didn‘t anticipate any of that they are just trying to point the finger at everybody else,” she said.

However, speaking to Morning Report today, Ms Ardern said Labour had anticipated underinvestment.

“We did anticipate underinvestment and in fact you‘ll remember it was one of the things we debated hotly prior to the election,” she said.

“What we have discovered since we‘ve been in, whilst it doesn‘t at all surprise me, does show that underinvestment is a bit more widespread.

“In health for instance, yes we‘re seeing new ways that hospitals are demonstrating the underinvestment, but we always new that DHBs were facing deficit, we knew that we couldn‘t afford for instance the tax cuts that were being promised by the last government.”

She said Labour had planned for this and had put extra money aside in its plans rather than focus on tax cuts.

“We knew that we had to make sure that we had that ability to invest because we knew about the chronic underinvestment and we prioritised differently to the last government to do it,” she said.

“We knew that we would have to put aside extra operating and capital allowance. We did all of those things in preparation for what we‘re facing now.

“What we‘ve put aside for our operating allowance, our ability to reinvest in basic services like health and education, we put aside $2.6 billion, the last government put aside $1.7 [billion].

“When it came to investing in buildings, infrastructure we put aside 3.4, they put aside $2 billion.”

She said despite her government‘s spending plans it would not “shy away” from maintaining keeping the books healthy.

“Because yes, every government has to plan the unexpected: natural disasters, biosecurity issues which we‘re handling now and again didn‘t anticipate having to deal with quite so quickly, but that‘s why it is important for us to maintain the books in a healthy state.”