Clive Bibby: Productivity gains and responsible spending are the key to prosperity

For those of us who recognise the need to balance the nation’s books, politicians who focus on fixing the things that matter are “gold” in the modern era.

I use the term “gold” advisedly because its value is based on its rarity.

In just about every country of the Free World, governments are trapped in a cycle of frivolous spending which only increases national debt to unsustainable levels.

Ironically, New Zealand is one of the few counties to have elected a government who campaigned on radical change to the traditional approach of spending more than we earn - the Lange Government of 1984-1990.

And, somewhat ironically, they not only saved us from bankruptcy but were rewarded with another term during which they restructured the whole economy.

History shows that one brief interlude of common sense and responsible government opened the way for future politicians of similar character and influence.

Yet the gains made by the Lange government who were brave enough to make the hard decisions have been all but lost in the ideologically driven, false justification of keeping us safe during the Covid epidemic. I can think of only one finance minister apart from Roger Douglas in the modern era, who made a serious attempt to bring spending under control - Ruth Richardson in the Bolger administration and look what happened to her.

Thankfully, it looks as if things are about to change although it will be a while before we see any productivity increases turned into trade surpluses that will finance future domestic spending without increasing the national debt.

Unfortunately, any signs that we are embarking on an era of responsible spending are still only a prediction rather than based on hard evidence that we have finally begun to live within our means.

Current predictions of better days are based on diplomatic activity rather than money in the bank yet it is encouraging to see senior Government Ministers spending time out of the country on successful trade talks with foreign governments that have real potential for significant increases to the nation’s coffers.

While I run hot and cold on Luxon as Prime Minister and leader of the Government coalition, his efforts at the ambassadorial level have been noteworthy and, should the results of his labours bear the fruit we are expecting, he is entitled to the credit he is due. His trips to India, Vietnam and other Asian tiger economies have laid the ground work for positive increases in our trading balances with those developing countries.

But all this will be for nothing if the Government capitulates to the radical elements of unions and socially active pressure groups who are making claims we can’t afford.

It is no surprise that the usual suspects appear daily on our TV screens bemoaning the “soulless” nature of those who control the nation’s purse strings.

Anybody can use statistics to justify a claim for more money yet, until the country’s producers (in whatever capacity) are rewarded for the overtures politicians have made in foreign markets, the Government has a responsibility to limit extra expenditure to areas that represent the “need to have” rather than the “like to have”.

And before my detractors rush to find fault with my analysis, may I invite them to pay a visit to our Tairawhiti region which includes some of the lowest decile communities in the country. While current local government inertia has stalled visionary plans to restructure the regional economy by making use of our under utilised natural resources, the potential for substantial growth remains untapped.

Meanwhile, in spite of the emotional claims by members of the self appointed national conscience that we are one minute away from midnight, the unmistakable social statistics will surprise if not convince you that this nation as a whole is in pretty good shape compared to just about any other comparable country in the world.

As an old hand with a finger on the pulse, I am happy to report that, relatively speaking, we are doing OK.

Sure there are indicators that “the poor are always with us” but if you look hard enough, you will find the State agencies providing a social safety net that is the envy of the world. Just ask the highly skilled immigrants who are banging on our door trying to gain entry.

And if that isn’t enough, spend time sitting outside the general store here in Tolaga Bay and count the vehicles that are more than 5 years old. Vehicle ownership (age and type) is a reliable measure of how the low paid workers are doing during these uncertain times. Weekly budgets that include significant vehicle related payments are an indicator of where family discretionary spending is going.

There aren’t too many “pogo” sticks parked up outside the pub these days.

By contrast, I drive a 12 year old Commodore with 210,000 kms on the clock which I can’t afford to replace until l win Lotto.

Go figure.

Clive Bibby is a commentator, consultant, farmer and community leader, who lives in Tolaga Bay.