Labour's Carmel Sepuloni, National's Paul Goldsmith trade barbs in tense interview about Defence funding, Kāinga Ora  

The Deputy Labour leader and Justice Minster traded barbs during a tense TV interview on Friday after a busy week in politics.  

Firstly, a damning report into Kāinga Ora found the agency is not financially sustainable. But that report, which was carried out by three people, cost $3 million which was previously earmarked for 80 urgent transitional housing places.  

Then the Government blindsided first home buyers by scrapping the First Home Buyers' Grant - something National promised not to do on the campaign trail last year.  

After that, there was news the Defence Budget was being cut by hundreds of millions of dollars, followed by Shane Jones declaring the country was open for mining and several donation scandals.  

The busy week turned into a tense interview when Deputy Labour leader Carmel Sepuloni and Justice Minister Paul Goldsmith went head-to-head on AM on Friday.  

The pair started by discussing the cuts to the Defence Budget, with Goldsmith claiming the report was inaccurate.  

When asked why National was cutting Defence spending, he replied, "Well I don't think we are". 

"We are increasing the spending by $571 million this year as Judith Collins announced so I don't think that story was quite correct," he told AM co-host Lloyd Burr. 

"When it comes to the big capital spending, that is lumped so you buy a bunch of planes one time and then we're planning the new plan for capability for next year and then there will be more investment. So it was sort of a misreading of the situation." 

Goldsmith said the operational spending is being boosted but the capital spending, for things like planes, is not in the Budget yet.  

This explanation didn't go down well with Sepuloni who took a crack, claiming National had a bad track record of capital investment and Labour always had to fix the issue.  

"National always talk a big game when it comes to Defence, but if we look back it's always Labour governments that end up having to invest in the capital," she said.  

Burr then pointed out the previous National Government invested in building a new ship, to which Sepuloni hit back saying they also "let our planes run down and everything else without a plan".  

Goldsmith took the chance to make his own jab saying, "I think it was Labour that cancelled the Skyhawks".  

Shortly afterwards, the topic moved to the Kāinga Ora report. When asked what she thought about the report, Sepuloni said she was a "little disappointed".  

"I'm a little bit disappointed about the way the Government used their figures talking about the debt but not talking about the massive increase to their asset base that occurred under us. We built nearly 14,000 additional public houses so that asset base is sitting at around $43 billion now," she said. 

"Yes, there is debt. We had to spend to build the houses but it also increases the asset base, that's the part of the picture the government has conveniently not spoken about." 

But Goldsmith said the report showed Kāinga Ora was an "incredibly poorly run organisation".  

He said it could not sustain the levels of debt it's carrying while also continuing to invest in public housing. 

"Yes of course they have an asset but the debt is not insufficient," he said. 

"The asset isn't insignificant," Sepuloni interjected. 

Watch the full interview above.