Andrew Dickens: We're all feeling the pinch, especially the Government

Well, ladies and gentlemen, we’re broke. 

The Half Year Economic and Fiscal Update shows we’re still in debt and the debt is getting bigger.

So, we’re broke. Not enough money, everything's more expensive so it’s off to the money lender before the bailiffs come in and sell everything. Sounds like a lot of households around me. 

Ideally, we’d be in a surplus - that’s when we have more money than costs. But we aren’t and the possibility of that happening has got further away. 

Make no mistake, deficit is bad, but surplus is only okay. That’s how bad we are. And we’re getting more and more in debt.

The Government has a debt to GDP ratio of 41.8% and it’s forecast to rise to over 46% before it starts going down. 

But lets put another lens on this: the New Zealand Government has posted a surplus 17 times since 1980. That's 17 times in 45 years. So the government has been broke 62% of the time since then.

Being broke is our normal.

And if I applied the surplus/deficit/debt ratio to my own finances then I’ve been broke most of my adult life. I mean, who hasn’t had a debt-to-equity ratio of 95% in their lives?

So if you look at it that way it’s not so bad. And we’re still in the right half of the indebted nations list. Everyone’s broke.

We’re a bit naïve when we demand surpluses about just how hard it is to do.  

Listen to Steven Joyce on Heather’s show yesterday: government books are hard to turn like a super tanker. As he said yesterday, it can take a decade. 

But some of us think a few public service cuts and cuts to benefits and we’d be tickety boo.  

But our fiscal crisis is far more fundamental than that.

What we really need to do is make more money in the world, so we have more tax revenue, so we have more good stuff and less debt. 

So, what are you standing there listening to this for? Get to work.

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Episode Transcript

Speaker 1 (00:00):
Well, ladies and gentlemen, we're broke. The half year the
government fiscal update shows we're still in debt and the
debt is getting bigger. So we're broke. Not enough money,
everything's more expensive, so it's off to the money lender
before the bailiffs come in and sell everything. Sounds like
a lot of households around me. Ideally, of course we'll
be in surplus. That would mean we have raised enough
money to actually pay our way. Then we'd have more

(00:22):
money than cost. But we aren't, and the possibility of
that happening has got further away. So make no mistake.
Deficit as bad, but surplus actually that's only just okay,
that's how bad we are, and we're getting more and
more into debt. The government has a debt to GDP
ratio of forty one point eight percent. It used to
be twenty nine and it's forecast to rise to over

(00:42):
forty six percent before it starts going down. But you
can just say we're broke, simple, easy, let's put another
lens on it. Though. The New Zealand government has posted
a surplus seventeen times since nineteen eighty. That's seventeen times
and forty five years. So the governments have, as being broken,
had to run off to the money lenders sixty two

(01:03):
percent of the time since nineteen eighty. Being broke is
our normal. And if I applied the surplus deficit debt
ratio to my own finances, then I've been broke most
of my adult life. I mean, hello, who hasn't had
a debt to equity ratio of ninety five percent in
their lives? So if you look at that at that way,
it start so bad. And we're still on the right
half of the indebted nations list because everyone's broke. I

(01:28):
think sometimes we're a bit naive when we demand surpluses
about just how hard it is to do. If you
listen to Stephen Joyce on Heather's show yesterday, he said
government books are hard to turn like a supertanker. As
he said yesterday, it can take up to a decade
to go from deficit to surplus. But some of us think, oh,
a few public service cuts and cuts to benefits and
we'll be tickety boot. Our fiscal crisis is far more

(01:51):
fundamental than that, and that the problem is we don't
make enough money in this world to fix it. We
need to make more money in the world, so we
have more tax revenue, so we can then afford the
good stuff and the necessary stuff, and so we don't
have to have debt. So my question to you is,
what are you doing there? Standing here listening to this.

(02:14):
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