There are three kinds of people in the world, those who can count and those who can’t . . .
It’s more than a little concerning that this exchange in parliament on Wednesday shows the Minister of Finance appears to be in the second group.
. . .Hon Paul Goldsmith: To the nearest billion dollars, what is an additional 1 percent GDP growth worth to New Zealand?
Hon GRANT ROBERTSON: I believe it’s about $800 million.
Hon Paul Goldsmith: $800 million?
Hon GRANT ROBERTSON: About that.
Hon Paul Goldsmith: Does he think that the people of New Zealand would expect their Minister of Finance to know that 1 percent of GDP is about $3 billion and that’s the amount of money that we’ve missed out on given the sharp decline in growth in the past year? . . .
Even those who struggle with numbers would recognise that there is a significant difference between $800 million and $3 billion.
We should also be concerned that the Minister has conceded defeat on Budget responsibility rules:
Finance Minister Grant Robertson has today thrown in the towel by scrapping his self-imposed debt target, National’s Finance Spokesperson Amy Adams says.
“Grant Robertson has been backed into a corner by allowing the economy to slow, over promising and making poor spending choices. Now, instead of a fixed target Grant Robertson has lifted the debt limit by 5 per cent. That loosens the purse strings by tens of billions of dollars.
“This is a blunt admission the Government can’t manage the books properly, it is not wriggle-room. This makes the fiscal hole look like a puddle.
“You can almost guarantee that means debt at the upper end of the range of 25 per cent. This is an admission of defeat from a Finance Minister who has repeatedly used these rules to give himself the appearance of being fiscally responsible.
“This decision will mean billions of dollars more debt because the Government can’t manage the books properly and wants to spend up on big wasteful promises in election year.
“This will pay for things like Shane Jones’ slush fund, fees-free tertiary and KiwiBuild – in other words, it’s wasteful spending.
“Debt isn’t free. It will have to be paid for by higher taxes in the future. . .
The economy is slowing and its poor policies are, at least in part, responsible for that.
Reducing wasteful spending should come before more borrowing.
If the government had concentrated on value for money, measured success by the quality of its spending rather than the quantity and enacted policies which promoted growth it wouldn’t have to even contemplate more debt.