Sense not cents

Bill English on sense rather than dollars and cents:

. . . the focus of it [the Budget] is certainly to get us to surplus so we can start repaying debt but more importantly looking ahead, it’s about quality government spending. We’ve got some real issues out in the community, kids who don’t achieve enough at school, people who want to feel safer in their community and what we’re learning from a period of restraint is that more thoughtful approach to spending the money and high quality to get results. That it’s not really about the dollars – solving, having a safer community, better educational achievement is about getting alongside people and supporting them in a way that gets results and it’s not just about the headline dollars. . . .

He shows he understand what’s up to people themselves, not governments:

. . . we’re a government who believes that households are capable of making their own decisions without a whole lot of advice from politicians and actually over the last four or five years they’ve made good decisions. They’ve been careful with their spending, they’ve been a bit careful with their debt. In fact even now it’s surprising in an economy growing at 3 percent, retail spending has been relatively flat. And I think from what I hear, people are going to be careful about increasing their debt. . .

He reinforces that solutions aren’t always about the amount of money spent:

. . . cash hand-outs just aren’t possible on a large scale and they’re probably not a good idea if you’ve got other underlying problems like over-priced housing. . .

He also reinforces there’s no money for lolly scrambles:

In this Budget we will have a paper-thin surplus , I mean we’ll just have a surplus but that’s the beginning of a series of surpluses and that means we have choices. And there’s a lot of choices. We’ve got the New Zealand Super Fund to resume contributions, an auto-enrolment for KiwiSaver, paying off debt more quickly, something for households to help them along. Those are choices that New Zealand fortunately will have if we have a growing economy and we stick to being pretty careful about our spending. . .

And he explains what matters:

Yes we’ll get to surplus but it’s ah you know it’ll be good to get that in the bag so we can move on because in a way focusing on that artificial number gives the impression that’s what really matters. Actually what really matters is whether Government is solving problems in our communities so we’ve got better communities and strengthening the economy so that we can get higher wages and more jobs. . .

Whether you’re an individual, a household, a business, other organisation or government, surpluses give you choices.

Sensible choices are to repay debt, address problems and keep on with policies which ensure spending is sustainable and surpluses maintained.

Sensible choices aren’t to increase taxes and spending or any other of the policies which put New Zealand into recession before the global financial crisis hit.

New Zealanders, in their households and their businesses, have adapted very well to what were quite difficult circumstances and the Government’s been there to support them doing it. The real issue is now whether we can sustain that growth so that people can see consistent wage increases year after year for instance  which they haven’t had for the last five or six years. So you know, we’ll be campaigning as much on delivering a sustainable economy in the future as on a record, which I think most people agree is reasonably good. The opposition doesn’t but this is, you know, we’re looking ahead on the basis of a record that is pretty good. . .

The opposition has fought every policy which has contributed to better financial management and their policies show they’re prepared to undo what’s working for purely ideological reasons.

The debt arises from the fact we had a recession and a major earthquake and we’ve said for the last three or four years the key issue here is to start paying it down when times get better and that’s pretty logical, people understand that and with interest rates, look, interest rates going up from the lowest in 50 years was inevitable. It’s our job to make sure they don’t go up any further than they need to. . .

High government spending was one of the pressures which gave us interest rates of around 11% by 2008.

Continued restraint is necessary to ensure any increases from the historic low stay below those double figures.