While National, ACT and NZ First are scrambling over the formation of a new government, their leaders appear to have forgotten the parlous state of the country’s finances and the urgent need to get them back into shape.
Political journalists were so engrossed with the eloquence of the outgoing Finance Minister that the public were left unaware of what one critic described as the “blundering”.
Among other failings, the critic pointed out, Grant Robertson had missed the chance to cover the next decade of (expensive) borrowings when NZ’s 10-year bond was 0.5%, not 5.0%.
The bigger mistake was to fund the banks by buying their long bonds at a yield of 1%, yet not entering into an agreement to sell back those bonds at the same yield. This could cost NZ at least $10bn.
The incoming government cannot risk making those kind of blunders, yet as the coalition talks continue, the country is left wondering if this provides a portent to how the tripartite Cabinet will perform and how the economy will be managed.
As the new PM-to-be rushes to and from meetings with Winston Peters and David Seymour, would-be ministers await the allocation of portfolios.
Chris Luxon – during one break in the talks – told reporters he wants a coalition that is strong and stable and can take New Zealand forward.
Coalitions with Winston Peters in them have always been hard to manage, and the question now is whether Peters at the age of 78 wants to create a lasting legacy.
Surely he won’t be eager to be remembered solely for the creation of the SuperGold Card?
Peters should be as conscious as the other leaders that one of the first objectives of the new government will be to straighten out the government’s finances.
The huge spending spree under Labour saw government debt blow out from $5bn in 2019 to a massive $104bn as recorded in the recent PREFU.
Besides this massive debt, there is the cost-of-living crisis and higher mortgage interest rates for New Zealanders to battle.
The National Party campaigned on cutting state spending, as did ACT. Whether Peters will join them on this issue has not become clear.
The total number of public servants is 62,710 people (as of March 2023). That’s a 33% increase since the Labour government came into office.
Across the public sector, annual reports show there are about 33% more managers and 40% more clerical and administrative personnel.
Spending on consultants grew to an eye-watering $1.7bn in 2022.
There is so much to be done that National Party stalwarts, in particular, will be putting their hopes on the new Finance Minister, Nicola Willis, being on the starting grid as soon as the new government is formed for the first critical steps in cutting state spending and re-balancing the economy.
Point of Order is a blog focused on politics and the economy run by veteran newspaper reporters Bob Edlin and Ian Templeton
Among other failings, the critic pointed out, Grant Robertson had missed the chance to cover the next decade of (expensive) borrowings when NZ’s 10-year bond was 0.5%, not 5.0%.
The bigger mistake was to fund the banks by buying their long bonds at a yield of 1%, yet not entering into an agreement to sell back those bonds at the same yield. This could cost NZ at least $10bn.
The incoming government cannot risk making those kind of blunders, yet as the coalition talks continue, the country is left wondering if this provides a portent to how the tripartite Cabinet will perform and how the economy will be managed.
As the new PM-to-be rushes to and from meetings with Winston Peters and David Seymour, would-be ministers await the allocation of portfolios.
Chris Luxon – during one break in the talks – told reporters he wants a coalition that is strong and stable and can take New Zealand forward.
Coalitions with Winston Peters in them have always been hard to manage, and the question now is whether Peters at the age of 78 wants to create a lasting legacy.
Surely he won’t be eager to be remembered solely for the creation of the SuperGold Card?
Peters should be as conscious as the other leaders that one of the first objectives of the new government will be to straighten out the government’s finances.
The huge spending spree under Labour saw government debt blow out from $5bn in 2019 to a massive $104bn as recorded in the recent PREFU.
Besides this massive debt, there is the cost-of-living crisis and higher mortgage interest rates for New Zealanders to battle.
The National Party campaigned on cutting state spending, as did ACT. Whether Peters will join them on this issue has not become clear.
The total number of public servants is 62,710 people (as of March 2023). That’s a 33% increase since the Labour government came into office.
Across the public sector, annual reports show there are about 33% more managers and 40% more clerical and administrative personnel.
Spending on consultants grew to an eye-watering $1.7bn in 2022.
There is so much to be done that National Party stalwarts, in particular, will be putting their hopes on the new Finance Minister, Nicola Willis, being on the starting grid as soon as the new government is formed for the first critical steps in cutting state spending and re-balancing the economy.
Point of Order is a blog focused on politics and the economy run by veteran newspaper reporters Bob Edlin and Ian Templeton
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