Kerre Woodham: This is a Budget that should've already been delivered

Guess what? New Zealand's in economic trouble. I know, I know, who would have thought it? Well, we did. You know it, I know it. We've known it for a very, very long time, right from the very start when Labour began throwing money around. There were the Cassandras coming on the radio saying, “Oh, you're going to have to pay it back. All very well and good now, probably the right thing to do, but at some point we're going to have to pay it back." 

“The outlook is negative, so it indicates that there is a chance of a downgrade.” 

Okay, and what does that mean? Well, it's not just national pride, it means that it will cost us more to borrow money, which will add even more to our outstanding debt. And it's all very well and good for Finance Minister Nicola Willis to start putting the brakes on now. As has become common these days, the Budget will be no surprise. You know the details of the Budget pretty much before it's announced. But I would argue her budget is a budget that should have been presented three years ago. She told Mike Hosking this morning that getting the books back in order is more important than ever. 

“We have to be very careful about the choices we make. And gone are the days, I think, when political campaigns will be about what new spending program you can design to dish out more lolly in a creative way. We're now in a time where the task for sensible leaders is to say, “What are the investments required to drive the things that will support growth, living standards, and affordability into the future?" And that's why, of course, we've made that decision. Actually, the Fees Free program, it doesn't cut it in this new age. It's not delivering results. That is investment that should be made elsewhere in things that really matter. And there have been choices like that throughout this budget process.” 

Good, but I would argue the tax cuts were a dumb choice. It was an election bribe. Spending on capital infrastructure, which is an investment in the future, that's not dumb spending. Silly tax cuts that made no meaningful difference to people's lives, I'd say that was a dumb choice. National came in saying that they had the answers, they had the lever, they knew which levers to pull to get the economy back on track. I think they made some dumb choices along the way, and this is the Budget that should have been delivered in Nicola Willis's first term as Finance Minister.  

They are streets ahead of a Labour-Greens coalition in terms of economic prudence. I mean, there is just absolutely, absolutely no choice if you're looking for economic prudence. Labour hasn't even got a plan, hasn't even released the plan – at least the Greens have released a plan. You might not agree with it, but they do have a plan. Labour, no, they're waiting till after the Budget and let's see what miracles they can put up. But how the hell are they going to pay for pay equity, which is going to cost billions and billions of ongoing dollars? If they promise that, then that should be enough to consign them to oblivion. 

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Episode Transcript

Speaker 1 (00:06):
You're listening to the Kerrywood and Morning's podcast from News Talks.

Speaker 2 (00:10):
He'd be guess what New Zealand's and economic trouble? I know,
I know who would have thought it? Well, we did?
You know it. I know it. We've known it for
a very very long time. Right from the very start
when Labor began throwing money around, there were the Cassandras

(00:35):
coming on the radio saying, you're going to have to
pay it back. All very well and good now, probably
the right thing to do that. At some point, we're
going to have to pay it back. The promise was
that the spending would be timely and targeted. It was
for about half of the billions that was spent, but

(00:57):
not the other half. Labor used the COVID pandemic to
spend up large, and the Royal Commission found it almost
half of the sixty billion dollars spent was unrelated to
the pandemic, and that has reduced the country's ability to
weather shocks and shocks aren't really shocks. Not these days.

(01:20):
We know that for just about every term of government
there's going to be something unexpected. To deal with the expected,
the unexpected has become expected. The GFC, the Canterbury quakes,
the weather events, the pandemics. You don't quite know what
the shock is going to be, but you know it
is coming. So prudent governments spend what they need to spend,

(01:47):
but do not use the crisis they're dealing with to
spend up large on their pet projects, especially when they've
got no bloody idea how to implement them and they
are a waste of money. Prudent governments spend what they
need to spend, then build up reserves to weather the
next time shock. This sid Chris Hipkins. Thomas Rookmaker, the

(02:11):
Fitch head of Asia Pacific Sovereigns, told Heather Duplice Allen
last night there is a very significant chance we will
get downgraded next year out look as megatheth So it
indicates that that there is a chance of the downgrade. Okay,
and what does that mean, Well, it's not just national pride.
It means that it will cost us more to borrow money,

(02:32):
which will add even more to our outstanding debt. And
it's all very well and good for Finance Minister Nikola
Willis to start putting the brakes on. Now there's been
all I mean, as has become common these days. The
budget will be no surprise there. You know the details
of the budget pretty much before it's announced. But I
would argue her budget is a budget that should have

(02:53):
been presented three years ago. She told my costing this
morning that getting the books back in order is more
important than ever.

Speaker 3 (03:01):
We have to be very keyful about the choices we
make and gone in other days, I think when political
campaigns will be about what new spending program you can
design to dish out more lolly in a creative way.
Where now in a time where the task for sensible
leaders is to say, what are the investments required to

(03:22):
drive the things that will support growth, living standards and
affordability into the future. And that's why, of course we've
made that decision. Actually, the fees free program, it doesn't
cut it in this new age. It's not delivering results.
That is investment that should be made elsewhere in things
that really matter. And there have been choices like that
throughout this budget process.

Speaker 2 (03:43):
Okay, so good, But I would argue that tax cuts
are a dumb choice. It was an election bribe. Spending
on capital infrastructure, which is an investment in the future,
that's not dumb. Spending silly tax cuts that made no
meaningful difference to people's lives. I'd say that was a
dumb choice. National came in saying that they had the answers,

(04:09):
they had the lever, they knew which levers to pull
to get the economy back on track. I think they
made some dumb choices along the way, and this is
the budget that should have been delivered in Nikola Willis's
first term as Finance minister. They are streets ahead of

(04:33):
a Labor Greens coalition in terms of economic prudence. I
mean there is just there is absolutely absolutely no choice
if you're looking for economic prudence. I mean Labor has
even got a plan, hasn't even released the plan. At
least the Greens have released a plan. You might not
agree with it, but they do have a plan. Labor, No,

(04:56):
they're waiting to laugh to the budget and let's see
what miracles they can put it. But how the hell
are they going to pay for pay equity which is
going to cost billions and billions of ongoing If they
promised that, then that should be enough to consign them
to oblivion. Slashing and burning, though, which is in Nikola

(05:20):
Willis's budget, is not a long term plan. Not to
get us back on track. Boosting productivity is building big
capital projects that employ people in bolster infrastructure that is
much needed. There is no choice about spending on infrastructure.
It has to be done. That's a sensible choice to make.

(05:43):
But I don't know. I would love to hear from
those of you who were the Cassandras at the time.
You know that that said right from the very start,
when the Reserve Bank was making ill advised decisions that
affected all of us, and when the going got tough,

(06:04):
the boss and run, leaving the rest of us to
pick up the pieces. You saw it coming. Did you
think it was going to get as bad as this?
Do you think that this sort of talk of fiscal
restraint and slashing and burning and savings and austerity is

(06:25):
the sort of budget that should have been delivered in
nicholas first term? As I do, hindsight is a wonderful,
wonderful thing. I know, and you could say the same
about COVID. But at the time they knew this had
nothing to do with COVID spending. So we're in we're
where we are now. Many of you saw it, many

(06:46):
of you called it, many of you could see exactly
the situation we're in now. And as grumpy as you
might be about some of the choices that the coalition
government has made, do you seriously think are labor Greens,
Tepati Maori of whatever iteration has got the economic answers

(07:07):
Historically they never have unless you're looking at the Clark
Cullen government. I'd love to get your thoughts on this.
Feel free to indulge in a little bit of hindsight,
a little bit of twenty twenty vision, and if you
were one of those who rang me during those dark
dark times, warning that one day we'd have to pay
the piper, love to hear from you.

Speaker 1 (07:29):
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