Frugal new normal

This is good news:

The days of big Budget handouts are long gone and New Zealanders need to get used to the “new normal” that is frugal Government spending.

That was the message of Prime Minister John Key in his post-Budget address at a Trans-Tasman Business Circle function this afternoon.

“The days of Budgets being these massive hand-outs of money we don’t have, I think, are gone,” he said.

“The new normal is the Government learning to live with about a billion dollars – maybe a billion-and-a-half dollars.

“Those days of three, four and five billion dollars’ worth of extra expenditure are over.” . . .

Frugality has been forced on National since it came to power in 2008.

It made a conscious decision to protect the most vulnerable from the worst of the global financial crisis by not taking a slash and burn approach and committed to helping Canterbury recover from the earthquakes.

But it has taken a necessaryily Presbyterian approach to spending in other areas  and required government departments to do more with less which is as it should be.

We need to return to surplus and once there need to reduce debt in order to be ready for the next crisis.

But the return to surplus should not be taken as a licence to return to the big spending budgets in which the lst Labour indulged.

A concerted effort must be made to ensure that government becomes and stays a smaller part of the economy.

That would leave more money in the pockets of the businesses and individuals who earn it and put the country on a stronger economic foundation for sustainable growth.

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