Saturday, June 15, 2024

Heather du Plessis Allan: Roger Douglas is right - we have too much debt

Today is 40 years to the day since Rob Muldoon called the snap election.  

Which then, of course, led to his defeat. Which then, of course, led to the incoming Labour Government, realised we were nearly broke as a country. Which then led to them embarking on the most amazing set of reforms which they do not get enough credit for to this day - and get way too much grief for.  

It is a really interesting anniversary for us to mark right now - as we find ourselves in a recession that feels like the worst that many of us have ever experienced. As we watch old names in New Zealand, like Smith and Caughey give up. As we see projections that the country's debt will just keep growing. 

Because today, Roger Douglas - one of the primary architects of those reforms back in 1984 - has given an interview saying we are as in as much trouble today, as we were back in 1984. By the way, if you ask why is Roger Douglas piping up again? He's not stopped, ay. You cannot stop the man. He's still pouring over all the government financials, still publishing his ideas, still calling journalists to tell us what he thinks is going wrong with the country. And in this particular interview, he points to a Treasury paper containing long-term fiscal projections, and he says if we carry on spending the way that we are, if you look at this paper, we're going to go broke.  

In particular, what he's worried about - is the projections for the cost explosion that's coming in healthcare, the pension, education and the cost of paying for the debt that we're racking up. He points to health specifically. He says it's currently 7% of GDP. In 35 years - many of us will still be alive by that time - it will be 11% Now that is just health. Never mind the pension. Never mind education. Never mind the cost of the debt. And he is worried that the debt is gonna blow out in this country. And he's right to be worried about it. Because if you just look at the budget documents that were published last month, that debt shows no sign of going anywhere other than up, it just gets bigger and bigger and bigger every single year. Now you tell me that he's wrong.  

And I'm not being miserable about it. I just wanna be realistic about it. You tell me that you disagree with him, that we are in the same position that we were in 1984. Our country is in a structural deficit at the moment. It means that we spend more every single year than we earn as a country. Our infrastructure is getting old. Everything is going backwards from crime, to the education system. We are tied up in red tape and dumb rules in this country. So he's right, isn't he? So here’s hoping the country and the government have the intelligence and the courage to do some radical things to fix this - just like the government that came in 40 years ago. 

Heather du Plessis-Allan is a journalist and commentator who hosts Newstalk ZB's Drive show HERE - where this article was sourced.


Reggie said...

Totally agree Heather. We should erect statues to Douglas and Prebble. They fixed NZ’s economy 40 years ago. In the last 6 years these fixes have been seriously undone.

There’s a big difference between 1984 and today. In 1984 the bulk of NZers understood the problems and accepted the cost and upheaval of the measures to rectify. There was a good feeling of optimism and we felt united. It worked! Today I don’t see that same optimism. We’re split. And we’re diverted away from the problem into matters woke. In particular I see the split of NZers by ethnicity as a major detraction and distraction away from the real problems.

We made a wrong turn 40 yers ago by elevating the Treaty as some sort of guiding document. Then set about inventing all sorts principles and meaning to the document that clearly are imaginary. And now we’re stuck with a situation where the Nation is split by ethnicity and all sorts of antipathy has emerged. It’s diverting us away from working together.

Robert Arthur said...

Don't fret. It is mostly just numbers omn a page or in a computer. Inflation can cancel most of it. Only mug savers have much to fear.

Anonymous said...

Nicola Willis, God Bless her, is just going to be a more fiscally prudent steward of the failed Labour & National policies of old. I have seen nothing to suggest this government is going to deliver real change. If they had it in them, they would give Act a free reign & allow us to ditch this cradle to the grave Welfare State once & for all. Things like family subsidies just feed into our low-waged, unskilled & unproductive economy.

Oh, and they would pay out Adrian Orr & get someone in who is actually economically literate.

Anonymous said...

So much misinformation disseminated by Labour in the eighties.

It began the corporatisation of New Zealand and the destruction of small business and farming that earned our countries income.
As long as we have the Reserve Bank and money printing we will continue to rack up debt.The whole system needs changing .Douglas never tackled the big problems and subsequent governments have kicked the can down the road.
Soon I guess we will all be happy and own nothing.

Anonymous said...

It is impossible to be optimistic about this nation’s future. The last Govt tore the heart out of the country, acting, it seems, under the malevolent influence of ‘global’ forces. The damage is generational and probably irreparable. Unless we can somehow achieve a total replacement of all (or most) of our failing institutions and political infrastructure the direction will remain downhill.

N B H said...

You are so correct Annon the ones spouting how great Douglas was didnt live through the chaos he caused it got that bad in the finnish David Lange sacked him.
The media at present are highlighting how interest rates are so hard on people, a small proportion of home owners are loosing their equity and we all feel for them.
Now under Roger Douglas home and business interest rates went from 12-14% under Muldoon to 28% in 18 months, with inflation running in the mid to top 20%, a huge percentage of home owners,businessea and farmers were in negative equity.
Bankruptcies,suicides,breakups unemployment were at an all time high small towns were shrinking and even disapearing.Actual wages dropped by up to 30%. Eg truck drivers went from $12-$14 per hour down to $8 -$9 per hour.
I will keep my thoughts to myself of what to do "with" a statue and Roger Douglas.
While all this chaos was going on in NZ a lot of other countries were booming.

Peter van der Stam, Napier said...

Oh, and they would pay out Adrian Orr & get someone in who is actually economically literate.
And WHO is this Adrian?? and why should he be paid out ??
For doing a useless job??
Come get real.
All useless people behind a desk doing nothing,
should be KICKED out. NOT be paid out.