Professor Robert MacCulloch: For the record - to avoid NZ's present budget mess

For the record: to avoid NZ's present budget mess, Roger Douglas & I gave a solution 8 years ago. It was rejected by National & Labour. Who's crying now?

In the NZ Herald today, Matthew Hooton declares, "Why NZ is doomed to a downhill spiral from 2030 unless we get on top of debt" . He says:

"Forgetting that when Bill English took office, debt & debt servicing costs had reached zero, Willis promises to mimic English’s “slow & steady” approach to addressing the unfolding catastrophe. At best, she seems set to repeat his record of a surplus or two before voters give Labour another crack. By then, annual debt servicing costs will have passed $15 billion. Worse, Labour would take office just as the permanent fiscal deficits forecast by Treasury lock in from 2030, fuelled by the costs of an ageing population .. Without greater urgency, NZ is doomed to a downhill spiral from 2030, similar to Argentina’s collapse from one of the richest countries in the world to basket case in the 20th century".

Six years ago, former Finance Minister Sir Roger Douglas & I provided a solution to avoid this mess - it was called, "A Welfare Reform for New Zealand: Savings not Taxation". Instead of being mired in debt & deficits, it provided a road-map to increase our GDP per capita by over 50% - to Singapore levels - and create a country of savers not borrowers. We held secret talks with the Nats & Labour about the plans - both parties threw the proposals back in our faces. Why? Their focus was on winning an election & staying in power the next 3 years, not looking out for the best interests of Kiwis over the next 30 years. Look who's crying now. New Zealand is being failed by the short-termism of our MPs.

Sources:
https://www.nzherald.co.nz/business/why-nz-is-doomed-to-a-downhill-spiral-from-2030-unless-we-get-on-top-of-debt-matthew-hooton/ARG6JZEWHRG2FHCEPU6DXQFVIQ/

Professor Robert MacCulloch holds the Matthew S. Abel Chair of Macroeconomics at Auckland University. He has previously worked at the Reserve Bank, Oxford University, and the London School of Economics. He runs the blog Down to Earth Kiwi from where this article was sourced.