When Benjamin Franklin apocryphally said, “When the people find that they can vote themselves money, that will herald the end of the republic,” he surely wasn’t thinking of New Zealand. After all, not only is it not a republic, but the place barely registered on the global consciousness in Franklin’s lifetime.
But that hasn’t stopped New Zealanders indeed enthusiastically voting themselves money.
New Zealand now resembles a Third World democracy, with politicians driving around backstreets throwing $20 notes out the window. Worse, it works for them. Polls indicate Kiwis, having voted in 2020 for massive borrowing, plan to vote themselves unfunded tax cuts on October 14.
It wasn’t always like this. But it’s been nearly twenty years since an NZ government paid off the country’s net public debt. Now, Kiwis have become addicted to voting themselves money.
Treasury’s pre-election books reveal the country of five million will have borrowed a net $NZ193bn ($177bn) on the never-never by 2026-27, nearly $NZ40,000 each.
Even that relies on accepting the outgoing government’s implausible assurances that it plans a decade of austerity. According to the books, Labour plans large cuts to public services, not only in real terms but also in nominal terms.
And if you believe that, I’ve got a live moa to sell you.
After all, who really believes Labour will cut housing spending by nearly a billion dollars while record numbers are chasing public housing? Or that it will slash bureaucracy in Wellington?
One thing you can bank on is that politicians and big business will try and paper it all over by ramping up mass immigration, just as they keep doing in Australia. New Zealand, though, is going comparatively hell-for-leather.
After accounting for New Zealanders expected to leave, Treasury predicts net inward migration of 250,000, mainly from India and China.
The immigration floodgates are already open, with nearly 100,000 net arrivals in the past 12 months.
While that may seem almost modest compared to the million cheap labourers and Third World grannies, oops, “skilled workers” and “family reunion”, Anthony Albanese is going to swamp Australia with in the next few years, per capita it is even more gargantuan.
No one believes NZ governments will deliver a decade of spending cuts.
In beautifully understated bureaucratic language, Treasury indicates it mistrusts its own minister. It emphasises the sharp fiscal deterioration in recent months has been caused by “a combination of government spending decisions and economic factors”.
It then models the implications of just $NZ1bn of further spending each year – that is, reversing the cuts to schools, police and housing – advising that the nation will then never return to surplus.
Typical tax-and-spend Labour government, you say?
Here’s Christopher Luxon, impersonating Jack Nicholson’s Joker: Hubba, hubba, hubba! Money, money, money! Who do you trust? Me? I’m giving away free money!
Voters are attracted by National’s supposedly better economic managers promising to increase health and education spending every year, by at least the rate of inflation “but allowing also for population growth and other pressures”. That demands huge new spending above Treasury’s forecasts.
Worse, National promises $NZ14.8bn of tax cuts for the poor and middle class across four years, from July 1 next year. It claims they’ll be paid for by further cuts and new taxes, including on non-tax-residents buying New Zealand houses worth more than $NZ2m. No one believes National’s figures and it won’t release any modelling supporting its revenue forecasts, creating speculation there is none. National’s tax plans are so reckless that even the Taxpayers’ Union says immediate tax cuts are “simply not credible”.
The economically literate right-wing Act Party, which National needs to become the government, is reviewing its own tax-cut plans following the disastrous numbers. But National isn’t yet backing down, saying its tax cuts will go ahead next year “no matter how badly Labour has wrecked the joint”.
The Australian
Remember when we Cassandras were mocked for pointing out the fallacy of Jacinda Ardern’s conceit that the whole country could be shut down for weeks at a time, with no economic consequences?
The only lesson the political class have learned is that they can get away with anything if they throw enough borrowed money at voters.
After all, the debt collectors will only come knocking long after the loons in Wellington have retired on their fat parliamentary pensions.
