Net debt

I don't get the Salvation Army's push against the net debt target.

Salvation Army social policy analyst Alan Johnson said there was a real danger that the crisis in mental health, social housing and well-being of older New Zealanders would become ingrained.

"One of the things with those caps is that they were literally straight out of the National Party rule book, which was disappointing that both the Greens and the Labour Party signed up for them even before the election.

"They are unnecessary and they could be relaxed I think without a massive impact on our credit rating, and the cost of capital and borrowing," Mr Johnson said.

Finance Minister Grant Robertson does have some wriggle room.

Core government spending is forecast to be about 28 percent of the value of the economy for each of the next four years.

In the 2018 financial year, the gap between the Mr Robertson's spending plan and the 30 percent cap equates roughly to an extra $6bn.

Net debt already sits just above its 20 percent of GDP target - four years early.

That's still not enough for Ricardo Menendez March from Auckland Action Against Poverty.

He wants the cap set much higher.

"I would say their limits should be at least twice as much.

"Some European countries have established 60 percent of core Crown spending in relationship to GDP and I don't think that's unreasonable," Mr Menendez March said.

"But ultimately the spending limits should be based on what society actually needs."

It is consistent to argue for higher taxes and higher spending in support of more government social service delivery. I'd rather like government not to expand relative to the overall size of the economy, but reasonable people can disagree with me on that. But pushing for increases in social services and the government's share of GDP on the back of higher debt targets rather than as part of a higher tax regime I don't think is consistent with the Public Finance Act.

Nana's argument for more debt for infrastructure funding is more coherent - you should use debt to finance long-lived infrastructure. But that infrastructure still has to pass a CBA. And if we're looking at infrastructure for urban growth, we should be thinking about mechanisms that set the incentives for long-term growth and not just the current crisis.