The government books have been opened and it’s pretty much as grim as forecast.
In the short term, the economic shock looks slightly better than expected. But in the long term, it’s a bit more gloomy. It’s going to take longer to come out of this than we thought.
According to Infometrics, GDP won’t be back to pre-pandemic levels until the end of 2022, which means we have two whole years of tough times ahead of us.
Unemployment won’t get back into the 5s until 2023, which means if you’ve lost or do lose your job in the next three years it’s going to be hard to find another one.
All in all though, I don’t think anyone’s going to be particularly surprised by what the books have shown up. More, this is a case of having fears reinforced.
The big thing here is still debt. Debt is now expected to reach 55.3% of GDP in four years. That is nearly three times what it was pre-pandemic.
The good news is that comparatively we’re in a much better position than many other countries carrying much bigger debt loads.
But the bad news is, we’ve spent the rainy-day money. Which means we need to get our debt levels back down so that we can handle another rainy day like this.
This brings us to the election.
Every dollar that every party pledges now during this campaign is another dollar on that debt, that we or our kids have to repay, or that makes it harder to survive the next shock.
This election, we should not have a tolerance for the wasteful spending we normally tolerate. And that includes:
- A $3 billion dollar pot for a minor collation party to spend on random projects in the provinces?
- $11.7 million for a Green School.
- $10 million for AJ Hackett.
- $45 million for a port idea in the East Coast that the local council doesn’t even want.
- $1 million for slushy machines in jails.
- $1 billion every electoral term on free university for kids that would go anyway
- Any and all working groups, especially the $30 million being wasted on investigating a hydro storage plant that probably won’t happen
- 250K on Trevor Mallard’s slide in front of parliament
- Billions in wage subsidies – a good idea, but paid to companies without any significant checks on whether they actually qualify.
We can’t spend like that this election. Given what we’ve just seen in the books… given the levels of debt, we need to value, more than ever, prudence and care with money this election.
Heather du Plessis-Allan is a journalist and commentator who hosts Newstalk ZB's Drive show.
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