. . . Since 2017, net core Crown debt has risen by around $120 billion.
Put another way, that’s $60,000 in additional debt for every household in New Zealand.
An extra $60,000 for what?
The country didn’t get ahead, nor did most of us and we’re all paying for it in far higher debt servicing.
The country didn’t get ahead, nor did most of us and we’re all paying for it in far higher debt servicing.
As a proportion of the economy, debt has ballooned from just 21.6 per cent of GDP in 2017, to around 43 per cent of GDP today, higher than it has been at any time since the 1990s.
At the same time, the cost of servicing our national debt has more than doubled, from $3.5 billion in 2017, to almost $9 billion today.
In some areas, spending more is the right thing to do.
In health, education, law and order, defence, and transport my government is prioritising significant new investments.
Each of those areas are a priority for New Zealanders and they require more funding to deliver the quality services Kiwis expect.
But that comes with trade-offs.
Spending more on everything, as some commentators have called for, would mean larger deficits, more debt, and ultimately fewer choices in future budgets as the cost of servicing our debt grows even larger and the prospect of returning to surplus evaporates.
Managing and responding to critical risks is also more challenging with high levels of public debt.
New Zealand was well served in the Global Financial Crisis, following the Christchurch Earthquake, and during COVID because successive Ministers of Finance made difficult choices to ensure New Zealand had low levels of public debt.
Our responsibility is to do what we can to leave a similar inheritance for future administrations. . .
Labour’s legacy was more debt and less progress.
The current government is determined to leave a much more positive legacy.
Ele Ludemann is a North Otago farmer and journalist, who blogs HERE - where this article was sourced.
9 comments:
'The current government is determined to leave a much more positive legacy.' Yet it continues to spend ever more?
There seems to be a continual stream of we are cutting spending, departments, public service and boosting the economy. Yet nothing is actually happening. Spending is up, departments and employees are the same. Or climbing if you are the reserve bank.
They are useless. Just like the rest of them.
And if the coalition of lunatics ever got back in then they'll do it all over again
The NZ debt is almost out of control . FACT. The debt interest is $4,500 each family over the 2 million NZ households . IF each household spent 100K annually , one third of the GST thereon would be required just to pay the NZ debt interest. OR if the budget raised GST to 20% then the interest would be controlled and by slashing expenditure the debt can be incrementally eliminated . A very serious budget has to be implemented and NOTHING else is suffice .
CXH I agree. Very little has been done about reducing the massive bloat in the public service. Maorification is either being ignored, or quietly supported by National. Large backhanders and bogus consultation fees to maori are ongoing. Our PM doesn’t approve of the notion that all NZers are equal under the law. Local govt is out of control, introducing unmandated co-governance arrangements and continuing to impose exorbitant rate hikes to fund their fantasies. Meanwhile the nation’s debt continues to climb on the wing and a prayer that growth will be achieved. Just how growth can be achieved when the public service, maori and local govt are doing their utmost to suck the nation dry and the best and brightest are bailing to study and/or work and live offshore is anyone’s guess. We haven’t found the turn off yet. We’re still on the road to banana republic. Best not look at the speedo.
NZ ‘well served…during Covid’. A very bitter hahaha to that.
Basil Walker. 20% GST should help getting the last remaining professionls and skilled workers to finally realis this place is finished.
Name another country in the world that taxes all it's citizens food? Just one will do.
Anonymous 4:53 I believe that most countries have an income tax system that in most cases taxpayer's buy food with their taxpaid income.
If you are trying to conflate my 5% extra GST suggestion to enable an eaqual way to pay the interest on the debt as another food tax I thinkyou miss the point
Somehow NZ has to get this nation out of the fiscal mess the Coaltion inherited with some speed and all hands to the issue.is needed .
So Basil, what country is it that taxes it's citizens food? I agree most countries have income tax. But a 15% tax on food? New Zealand is the only one.
New Zealand could face a bill of between $3.3 billion and $23 billion by 2030 to meet its Paris Agreement targets, primarily through the purchase of carbon credits from other countries. This would be in addition to the domestic emissions reduction efforts required by the country's commitments. Just saying...while we poor citizens give the govt 15 percent every time we get a haircut, fill up the car, have the plumbing repaired, go to the GP, buy anything in any store, including food, get dental work done, pay the power bill or rates...the list goes on. Why oh why should we? "King John/Chris" is not a good keeper of the purse in my view, as New Zealand hangs off the fiscal cliff on the verge of bankruptcy. Chucking money into big black holes such as The Paris Agreement is a fool's game, not to mention "treaty settlements." Whilst certain "Maori entities" are exempt from tax due to being classed as "charities", we pay 15 percent on nappies, baby food and haircuts. Outrageous. (Where is Robin Hood when you need him?")
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