LilBaP
The books are on fire. Wellington is arguing about the colour of the cover. We watch with interest and we are also the ones paying.
Damien Grant, on Stuff last week, opened Treasury’s pre-election forecast and read it out loud, which is more than most have managed.
When Nicola Willis took the books off Grant Robertson, spending was 31.7 per cent of GDP. It is now expected to be 32.1 per cent in the 2026 year and about $20 billion higher in cash. The tax take has slipped from 28 per cent of GDP to 27.6. Debt has gone from 38.6 per cent to 41.
The scary numbers are the interest bill: $3.3 billion in 2023, $10.3 billion by 2027. Super goes from $24 billion this year toward $33 billion by 2031. Three years of what was sold as restraint, and a larger share of the economy, is still going through Wellington.
Restraint, it turns out, is a press release with a rising graph.
Treasury’s 2023 forecast had a surplus by now. It is 2026. The surplus was on the trailer. Someone unhitched it and the same driver still wants the keys. The new path needs growth to jump from 1.1 per cent to 2.9 by 2028, and it assumes no shocks.
Pandemics, wars, quakes and Labour Governments do not RSVP. They turn up, eat the sausage rolls and leave the books smouldering.
Grant says welfare, including health, is unsustainable. That part is a fact. He also calls universal super a payment to millionaire boomers. A paper millionaire who sells the house to eat is no longer a millionaire. He is a renter and the super is what pays the rent. Grant counted the rateable value and renames it.
He also suspects the ACC debt line was moved. That may be so. What he does not mention is the money that leaves the country or lines the wrong pockets.
The $50 for fuel has Willis’s name on it. From April, about 143,000 working families get an extra $50 a week. Sold as fuel relief. It is not a cut at the pump. In October it is still being paid and it is not for most families. Call it what it is. A top-up to Working for Families. Temporary, in Wellington, means until the next photo op, and possibly the one after that.
School lunches are the same shape. Trimmed, not ended. Checking which children are actually not being fed would have been the hard decision. But it’s welfare, with a bread roll and hopefully some butter.
The last three years are the test: spending up, debt up and surplus still over the hill.
Now, across to the other side of the House. The menu is longer and the courses cost more.
Hipkins has pay equity, cheaper student loans, more for Kainga Ora, more for doctors and school buildings and a capital gains tax. The Greens want a wealth tax and Opportunity wants a land tax. Te Pāti Māori wants the lot, and a food voucher – and a meeting the morning after the election.
Grant’s line holds. They raise some cash, spend more and borrow the gap. National’s line is no new taxes. But you can refuse a new tax and still write a new weekly payment. They have shown us the trick, in public, with a receipt and a levy.
Yes, cutting waste in Wellington is necessary. It is not enough. A country does not audit its way out of a productivity hole, though several departments will invoice for the attempt. One answer is not enough. New Zealand needs a jump start, not a new steering wheel on a car that will not turn over.
We need a spark. Hit all three at once.
First, public money for a result you can see. A hospital. A road. A trade agreement that works for our side. Not a scheme that feeds the person writing the caption. Treaty chapters in trade deals no farmer asked for and no worker can understand; climate text that lectures the milk producer and does not sell the milk; funding that never shows the dollar reaching the household it was meant for.
Follow the money, the mouth, the microphone and the person who ends up with it. If they are the same circle, then the taxpayer is the one losing.
Second, the energy. A new machine with no power is a very expensive paperweight. Wind and solar can light the house and burn the toast but they don’t work when the cloud sets in and the wind knocks off for the afternoon. Keep Huntly until a replacement actually exists.
Look for the oil and gas that was stopped under Labour. Burn our own coal rather than someone else’s substandard shipped in from a distance and fast-track the geothermal – the one renewable that still turns up to work. Cheap power, and fuel you can actually get, is what keeps a country working.
Third, tax. A small firm hires, or it shrugs and goes home. Reduce company tax from 28 to 25 or lower, so the money stays in the business instead of feeding the interest bill: a deduction for the equipment that makes or grows things. Treasury has already booked the growth. It forgot about production equipment, a shift or an apprentice.
Grant wants the axe. Wellington wants another working group on the axe. Tax the extra hour and the machine until people stop and you do not get a fairer country: you get an empty one with a larger interest bill sitting on top.
If the next government does not do it, and I mean the coalition not one party with a slogan, then the people who lend us the money will do it for us. Credit agencies do not vote: they read the forecast. Miss it and the rate on the debt goes up. The Titanic started sinking slowly, until the bow went under.
Mine is simpler. Jump-start the car. Take the handbrake off. Start steering in the right direction.
