Mike Hosking: Now is not the time for benefit increases

Quietly unveiled at the end of Jacinda Ardern's post-Cabinet press conference on Monday was confirmation of benefit increases based on wage increases, not the consumer price index, as has traditionally been the case.

It was a change made in the 'Wellbeing Budget' and this ironically is in part why the books aren't what they were, or indeed should be. The books were talked of in the same conference by Finance Minister Grant Robertson, who assured us all that we are busy working on three separate coronavirus plans, and we are in good shape to deal with all three.

Plan 1 is a short shock with a second part of the year bounce back. 

Plans 2 and 3 are more serious outcomes, he emphasised it's planning not preparation, they don't think it will happen. 

How he knows that, who would know, because he doesn't.

He subtly told us about the surpluses over the next four years, not mentioning currently we aren't actually supposed to be running any surplus, so whatever may come is merely a forecast not reality.

And the fact the books are currently slightly better than the deficit predicted is because a big wad of tobacco excise came in unexpectedly before Christmas, and will wash through the books.

In other words, it's a false reality.

Robertson talked of export receipts, and low unemployment, all of which is true. But retrospective, and presumably potentially badly hit if this thing gets ugly.

The reality going forward, is a government's role in a major downturn is to spend, and to spend we need to borrow, and we borrow from day one because we've already spent all the money.

Mike Hosking is a political broadcaster on Newstalk ZB, who has hosted his number one breakfast show since 2008 - see HERE.