Well, Matthew Hooton's opinion piece in the New Zealand Herald has laid it out starkly, unequivocally, in no uncertain terms. The grindy times are here for a long time, as he says. Brooke van Velden’s constitutionally dubious and deeply unpopular legislation to amend the Equal Pay Act and more bold moves like it, are now unavoidable, whether they take the form of massive spending cuts, much higher taxes, or most likely, he says both. And the reason? Successive governments have been on a massive jolly, and now we, and successive generations have to pay for it.
As Hooton reminds us, Treasury began formerly warning in 2006, about the looming fiscal challenges after 2030. It expected future governments would follow the responsible fiscal management of the Bolger, Shipley, and Clark governments, that they would maintain surpluses, pay back debt, put aside cash for a rainy day. Had we heeded the advice and followed the blueprint, we would be 15% of GDP in the black this year. Instead, the Key-English and Ardern-Hipkins Governments went on a 15-year spending spree, putting us 23% of GDP in the red, despite the Super Fund's returns on investments exceeding expectations.
You can say what about the Canterbury quake, the GFC, and Covid? You can say all of that. But he's quite right. Successive governments have had to recover from crises, but they've also used that time to have a spend up, to push through expensive legislation and policies, of their choosing, of their ideology, while at the same time having to fork out billions in damage recovery. So, the four years of grindy times are going to be nothing in comparison to what we are going to see. There's more with this came from. Thanks to the Key-English and Ardern-Hipkins legacy, we're nearly 40% of GDP, or more than $170 billion, behind where Helen Clark, Winston Peters, and Sir Michael Cullen planned back in 2006, just as baby boomers retire and health costs start to explode. He says and argues without radical policy change, there is no plausible scenario that doesn't lead to eventual financial and social collapse.
I urge you to read it and have a look and see what you think. That is why Labour's well-intentioned and accurately costed ill thought-out legislation is being scrapped. That is why superannuation and healthcare costs will be put under the microscope as costs balloon. And that is why I would argue, National and Labour need to work together to get us out of this mess. Treasury warned of the fiscal challenges in 2006. They warned of them again in a 2012 post-election briefing to John Key, the papers stressed again as baby boomers move into retirement, New Zealand's 65 and over population is projected to grow nearly four times more quickly than the total population, and consequently there'll be a rapid rise in health, aged care, and New Zealand super costs. Treasury said the fiscal challenge is considerable. There is no way to avoid making trade-offs. Given the potential economic and social instability that could result from any uncertainty about these trade-offs, we think it's crucial that effort be made to build broad public consensus on the way forward.
And that's where we are today. The trade-offs are starting but there's no consensus, because it's just been sprung on us. Well, it hasn't been sprung on us. Treasury have been warning of this for some time, and we have ignored it as voters and the parties have ignored it. Both National and Labour are at fault, but we voters are to blame as well. We can't just stand there saying, “oh, we're victims we didn't know”. Would we have elected any party to government that laid out the grim prognosis for New Zealand Inc. and spelled out the tough measures we would need to take to recover? If Christopher Luxon had stood there in 2023 and said, we're in a real mess and it goes way beyond Hipkins and Robertson, Ardern and Robertson. It goes back a lot further than that and we are going to have to cut the equal pay amendment legislation, we're going to have to raise the age of superannuation, as every other western country we measure ourselves against has done, we're going to have to look long and hard at healthcare, we’re have to look long and hard at welfare payments, and we're probably going to have to scrap some of them because we're in a deep, deep fiscal hole. Would we have said thank you so much for spelling it out. We're going to vote National back in to do these austere and tough measures that we need to recover so that we've got a country for our grandchildren. I doubt it.
We are just as much to blame. The party is well and truly over, and it has been for some time. We've just borrowed to keep it going and buried our heads in the sand, turned up the music so we don't hear the creaking and the groaning of the economy as it struggles to keep the party going. It's time we all grew up. And it's time both the Prime Minister and the Leader of the Opposition worked together to try and keep the country together while we work our way out of this mess.
Kerre McIvor, is a journalist, radio presenter, author and columnist. Currently hosts the Kerre Woodham mornings show on Newstalk ZB - where this article was sourced.
As Hooton reminds us, Treasury began formerly warning in 2006, about the looming fiscal challenges after 2030. It expected future governments would follow the responsible fiscal management of the Bolger, Shipley, and Clark governments, that they would maintain surpluses, pay back debt, put aside cash for a rainy day. Had we heeded the advice and followed the blueprint, we would be 15% of GDP in the black this year. Instead, the Key-English and Ardern-Hipkins Governments went on a 15-year spending spree, putting us 23% of GDP in the red, despite the Super Fund's returns on investments exceeding expectations.
You can say what about the Canterbury quake, the GFC, and Covid? You can say all of that. But he's quite right. Successive governments have had to recover from crises, but they've also used that time to have a spend up, to push through expensive legislation and policies, of their choosing, of their ideology, while at the same time having to fork out billions in damage recovery. So, the four years of grindy times are going to be nothing in comparison to what we are going to see. There's more with this came from. Thanks to the Key-English and Ardern-Hipkins legacy, we're nearly 40% of GDP, or more than $170 billion, behind where Helen Clark, Winston Peters, and Sir Michael Cullen planned back in 2006, just as baby boomers retire and health costs start to explode. He says and argues without radical policy change, there is no plausible scenario that doesn't lead to eventual financial and social collapse.
I urge you to read it and have a look and see what you think. That is why Labour's well-intentioned and accurately costed ill thought-out legislation is being scrapped. That is why superannuation and healthcare costs will be put under the microscope as costs balloon. And that is why I would argue, National and Labour need to work together to get us out of this mess. Treasury warned of the fiscal challenges in 2006. They warned of them again in a 2012 post-election briefing to John Key, the papers stressed again as baby boomers move into retirement, New Zealand's 65 and over population is projected to grow nearly four times more quickly than the total population, and consequently there'll be a rapid rise in health, aged care, and New Zealand super costs. Treasury said the fiscal challenge is considerable. There is no way to avoid making trade-offs. Given the potential economic and social instability that could result from any uncertainty about these trade-offs, we think it's crucial that effort be made to build broad public consensus on the way forward.
And that's where we are today. The trade-offs are starting but there's no consensus, because it's just been sprung on us. Well, it hasn't been sprung on us. Treasury have been warning of this for some time, and we have ignored it as voters and the parties have ignored it. Both National and Labour are at fault, but we voters are to blame as well. We can't just stand there saying, “oh, we're victims we didn't know”. Would we have elected any party to government that laid out the grim prognosis for New Zealand Inc. and spelled out the tough measures we would need to take to recover? If Christopher Luxon had stood there in 2023 and said, we're in a real mess and it goes way beyond Hipkins and Robertson, Ardern and Robertson. It goes back a lot further than that and we are going to have to cut the equal pay amendment legislation, we're going to have to raise the age of superannuation, as every other western country we measure ourselves against has done, we're going to have to look long and hard at healthcare, we’re have to look long and hard at welfare payments, and we're probably going to have to scrap some of them because we're in a deep, deep fiscal hole. Would we have said thank you so much for spelling it out. We're going to vote National back in to do these austere and tough measures that we need to recover so that we've got a country for our grandchildren. I doubt it.
We are just as much to blame. The party is well and truly over, and it has been for some time. We've just borrowed to keep it going and buried our heads in the sand, turned up the music so we don't hear the creaking and the groaning of the economy as it struggles to keep the party going. It's time we all grew up. And it's time both the Prime Minister and the Leader of the Opposition worked together to try and keep the country together while we work our way out of this mess.
Kerre McIvor, is a journalist, radio presenter, author and columnist. Currently hosts the Kerre Woodham mornings show on Newstalk ZB - where this article was sourced.
6 comments:
And too many NZers still oppose immigration. Wellington 630am, Mon-Sun: most on the street are immigrants going to work to hospitals and supermarkets, and these workers pay taxes.
Don't fret Kerrie, when Iwi takeover all will become utopian again........
But they did claim they were going to fix things. They would cut the thousands of extra public servants, nada. They would cut spending, they are higher than Robertson. They would remove all mention of principles of the treaty from legislation, the opposite has happened.
So we did vote in a government with the mandate to do something. We got the same old driven by social media nothingness.
Labour and National are the same , different names identity only difference. One is Coke the other Cola. To suggest they should combine is laughable . NZF and ACT are the reason the Coalition government is making progress.
Can I assist Kerre , the Herald albeit available online is not available as a paper through out NZ. The Equal Pay Act has only changed the comparitors and is still available as the Equal Pay Act 2025.
The Covid debacle is the Labour party and Finance buffoon Robertson mess only. Labour reappointed Reserve bank chairman Orr , have you forgotten the $11billion and climbing fiasco Kerre, when they printed money like confetti.
Take a risk NZ... vote in a minority govt. These 2 parties must put up candidates in every electorate. Last chance for NZ's survival.
" ... it's time both the Prime Minister and the Leader of the Opposition worked together to try and keep the country together while we work our way out of this mess" - as the saying goes "pigs will fly!" The only thing these clowns are in sync on is Maorification of this fair land - period! The chances of us ever having an NZF/ACT minority govt to sort things out are minimal, the leaders of these two parties could and should work closer together but it is highly improbable that they will and Lord knows why, 'cos I don't. Great stuff in the coalition agreements are only receiving lip service as National is snow-jobbing anything that has the potential to fix the Country's malaise. Challenge for ACT/NZF - prove me wrong! I say you can't!
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