Labour's alternative Budget has been given the tick of approval by one of New Zealand's leading economists.

Ganesh Nana, chief economist for BERL, told The AM Show on Thursday finance spokesperson Grant Robertson has done his homework.

"The numbers they've put in front of us do add up once we put their numbers on top of the existing May Budget numbers. They are credible," he told host Duncan Garner.

Labour on Wednesday unveiled its plan to spend more on health and education, paid for by cracking down on multinational tax avoidance and housing speculation, slowing down debt repayment and cancelling National's tax cuts, which would have delivered about $10 for week for those on low-to-average incomes, and $20 a week for high earners.

"We've got different priorities to the National Government," Mr Robertson told The AM Show. "They want to give out these $20 a week tax cuts - we say we collectively, the people of New Zealand, can spend that money better - more nurses, more teachers, making sure we've got cops on the beat."

Mr Robertson admits it'll take a bit of borrowing in the short-term until tax money from multinationals and housing speculation starts to flow in - but Dr Nana says that's no problem, because New Zealand's public debt is not large by historic standards nor when compared with countries overseas.

"There's more than enough elbow room to do the sorts of borrowing the Labour Party have put in front of us in their alternative Budget."

Public debt reached a 35-year low at the end of Labour's last term in Government, at 5.4 percent of GDP. Following the global financial crisis and the Canterbury earthquakes it ballooned out to over 25 percent - still well below the likes of the UK (89 percent), the US (106 percent) and Japan (250 percent).

Finance Minister Steven Joyce says it's not the time to be building up new debt, calling it "classic Labour tax and spend".

"We need to be reducing debt now to be ready for the next rainy day," Mr Joyce says, accusing Labour of also proposing existing health spending as "new".

"More debt, higher taxes for low and middle income New Zealanders, and no more spending on health. I don't know how they managed it but they simply seem to be proposing to waste more money and get very little to show for it."

Tax review planned

Mr Robertson's plan differs from past Labour proposals, which usually propose tax increases - at least at the top end of the pay scale.

He says once in power a review of the tax system would be undertaken - so tax hikes could still happen, but Mr Robertson says there are other ways for the state to raise money.

"In New Zealand we don't tax assets like housing the same way most other countries in the world do. We want a better balance between how we tax income, and how we tax assets and wealth."

Dr Nana says another good thing about Labour's spending proposal is it gives voters a clear choice.

"As an economist, it's always good to have choice in the market. We can actually find out what the New Zealand voter actually wants."

Newshub.