Right now it feels as though every week the Government breaks another promise to New Zealanders and last week was no different.
Finance Minister Grant Robertson has thrown in the towel and scrapped his self-imposed debt target, which was part of his “Budget Responsibility Rules”. Now instead of a fixed target of reducing Crown debt to 20 per cent, Mr Robertson has given himself a range.
This essentially means debt could rise to the upper end of the range – 25 per cent – loosening the purse strings by tens of billions of dollars. This amount of money isn’t just “wriggle room”, as the government puts it.
The government is admitting defeat. They have repeatedly used these rules to give themselves the appearance of being fiscally responsible and it’s all crumbling down around them.
They have been backed into a corner by allowing the economy to slow, over-promising in several areas and spending up large on things like Shane Jones’ slush fund, fees-free for tertiary students, and KiwiBuild – all poor spending choices.
This is a blunt admission the Government can’t manage the books properly and an admission of what National has been saying for months, that the government cannot deliver on everything they have promised.
But this doesn’t just mean more money to throw around at poor policies, this change means tens of billions of dollars of extra debt our future generations will have to pay for.
Mr Robertson is giving the Government a licence to spend up large, but it’s at the taxpayers’ expense.
Debt isn’t free. It will have to be paid for with higher taxes in the future. Labour is putting a heavy financial burden on our children and grandchildren.
National believes in paying down debt when the economy is in good shape so we have the ability to support New Zealand during a crisis, like we did during the Global Financial Crisis and the Christchurch earthquakes. That’s what has historically kept New Zealand out of trouble.
Instead, Labour has wasted the surpluses they inherited and weakened our economy through poor economic management. New Zealand could have had enough money to meet our needs.
The debt target is the latest broken promise by the Government as its “year of delivery” continues to be an embarrassing string of failures. The Prime Minister and the Finance Minister have waved the white flag on a significant rule they promised to New Zealanders.
The Government is 18 months in and Mr Robertson has given up any pretence of fiscal responsibility, showing you just can’t trust Labour with the economy.
- Simeon Brown, MP for Pakuranga