Kerre Woodham: The party is well and truly over

There's bad news, really, and it's been coming and I think I've had my head in the sand for some time. I've been wanting things to get better quickly. I've wanted things to move out from grindy-ness, and a lack of fun, and excess, and nonsense. It's just been for four years of long, slow grind, it seems.  

Well, Matthew Hooton's opinion piece in the New Zealand Herald has laid it out starkly, unequivocally, in no uncertain terms. The grindy times are here for a long time, as he says. Brooke van Velden’s constitutionally dubious and deeply unpopular legislation to amend the Equal Pay Act and more bold moves like it, are now unavoidable, whether they take the form of massive spending cuts, much higher taxes, or most likely, he says both. And the reason? Successive governments have been on a massive jolly, and now we, and successive generations have to pay for it.  

As Hooton reminds us, Treasury began formerly warning in 2006, about the looming fiscal challenges after 2030. It expected future governments would follow the responsible fiscal management of the Bolger, Shipley, and Clark governments, that they would maintain surpluses, pay back debt, put aside cash for a rainy day. Had we heeded the advice and followed the blueprint, we would be 15% of GDP in the black this year. Instead, the Key-English and Ardern-Hipkins Governments went on a 15-year spending spree, putting us 23% of GDP in the red, despite the Super Fund's returns on investments exceeding expectations.  

You can say what about the Canterbury quake, the GFC, and Covid? You can say all of that. But he's quite right. Successive governments have had to recover from crises, but they've also used that time to have a spend up, to push through expensive legislation and policies, of their choosing, of their ideology, while at the same time having to fork out billions in damage recovery. So, the four years of grindy times are going to be nothing in comparison to what we are going to see. There's more with this came from. Thanks to the Key-English and Ardern-Hipkins legacy, we're nearly 40% of GDP, or more than $170 billion, behind where Helen Clark, Winston Peters, and Sir Michael Cullen planned back in 2006, just as baby boomers retire and health costs start to explode. He says and argues without radical policy change, there is no plausible scenario that doesn't lead to eventual financial and social collapse.  

I urge you to read it and have a look and see what you think. That is why Labour's well-intentioned and accurately costed ill thought-out legislation is being scrapped. That is why superannuation and healthcare costs will be put under the microscope as costs balloon. And that is why I would argue, National and Labour need to work together to get us out of this mess. Treasury warned of the fiscal challenges in 2006. They warned of them again in a 2012 post-election briefing to John Key, the papers stressed again as baby boomers move into retirement, New Zealand's 65 and over population is projected to grow nearly four times more quickly than the total population, and consequently there'll be a rapid rise in health, aged care, and New Zealand super costs. Treasury said the fiscal challenge is considerable. There is no way to avoid making trade-offs. Given the potential economic and social instability that could result from any uncertainty about these trade-offs, we think it's crucial that effort be made to build broad public consensus on the way forward.  

And that's where we are today. The trade-offs are starting but there's no consensus, because it's just been sprung on us. Well, it hasn't been sprung on us. Treasury have been warning of this for some time, and we have ignored it as voters and the parties have ignored it. Both National and Labour are at fault, but we voters are to blame as well. We can't just stand there saying, “oh, we're victims we didn't know”. Would we have elected any party to gove

Episode Transcript

Speaker 1 (00:06):
You're listening to the Carrywood and Morning's podcast from news Talks,
he'd be.

Speaker 2 (00:11):
There's bad news, really, and it's been coming. And I
think I've had my head in the sand for some time.
I've been wanting things to get better quickly. I've wanted
things to move out from grindiness and grimness and a
lack of fun and excess and nonsense. It's just been

(00:37):
for four years, a long slow grind, it seemed. Well.
Matthew Houton's opinion piece in the New Zealand Herald has
laid it out starkly, unequivocally, in no uncertain terms. The
grinding times are here for a long long time, as
he says, Brook van Walden's constitutionally dubious and deeply unpopular

(01:00):
legislation to amend the Equal Pay Act and more bold
moves like it now unavoidable, whether they take the form
of massive spending cuts, much higher taxes, or most likely,
he says, both and the reason successive governments have been
on a massive jolly, and now we and successive generations

(01:25):
have to pay for it. As Houghton reminds, us Treasury
began formally warning in two thousand and six about the
looming fiscal challenges after twenty thirty. It expected future governments
would follow the responsible fiscal management of the Bulgers, Shipley

(01:46):
and Clark governments, that they would maintain surplices, payback debt,
put aside cash for a rainy day. Had we done that,
had we followed the blueprint, he did the advice and
followed the blueprint, we would be fifteen percent of GDP
in the black this year. Instead, the Key, English and

(02:08):
Urduran Hipkins governments went on a fifteen year spending spree,
putting US twenty three percent of GDP in the red,
despite the superfund's returns on investments exceeding expectations. Now you
can say the Canterbury quake, and you can say the GFC,

(02:29):
and you can say COVID, you can say all of that.
But he's quite right. Successive governments have had to recover
from crises, but they've also used that time to have
a spend up, to push through expensive legislation and policies

(02:56):
of their choosing of their ideology, while at the same
time having to fork out billions and damage recovery. So
the four years of Grindee times are going to be
nothing in comparison to what we are going to see.

(03:17):
There's more where this came from. Thanks to the Key
English and Ardurn Hipkins legacy, we are nearly forty percent
of GDP, or more than one hundred and seventy billion
dollars behind where Helen Clark, Winston Peters and Sir Michael
Cullen planned back in two thousand and six, just as
baby boobers retire and health costs start to explode, he

(03:41):
says and argues, without radical policy change, there is no
plausible scenario that doesn't lead to eventual financial and social collapse.
I urge you to read it and have a look
and see what you think. That is why labor is
well intentioned and accurately costed, ill thought out legislation is
being scrapped. That is why superannuation and healthcare costs will

(04:06):
be put under the microscope as costs balloon. And that
is why I would argue National and Labour need to
work together to get us out of this mess. Treasury
warned of the fiscal challenges in two thousand and six.
They warned of them again in a twenty twelve post
election briefing too, John Key, the paper is stressed again

(04:27):
as baby boomers move into retirement. New Zealand's sixty five
and over population is projected to grow nearly four times
more quickly than the total population, and consequently there'll be
a rapid rise in health, aged care and New Zealand
super costs. Treasury said the fiscal challenge is considerable. There

(04:48):
is no way to avoid making trade offs given the
potential economic and social instability that could result from any
uncertainty about these trade offs. We think it's crucial that
if it be made, to build broad public consensus on
the way forward. And that's where we are today. The
trade offs are starting, the trade offs are beginning, but

(05:13):
there's no consensus because it's just been sprung on us. Well,
it hasn't been sprung on us. Treasury have been warning
of this for some time and we have ignored it
as voters and the parties have ignored it. Both national
and labor are at fault, but we voters are to
blame as well. We can't just stand there saying or

(05:35):
we're victims. We didn't know. Would we have elected any
party to government that laid out the grim prognosis for
New Zealand and spelled out the tough measures we would
need to take to recover. If Christopher Luxen had stood
there in twenty twenty three and said, look, you know,
we're in a real mess. And it goes way beyond

(05:59):
Hipkins and Robertson are Dourne and Robertson. It goes back
a lot further than that. And we are going to
have to cut the Equal Pay Amendment legislation. We're going
to have to raise the age of superannuation, as every

(06:21):
other Western country we measure ourselves against has done. We're
going to have to look long and hard at healthcare.
We're going to have to look long and hard at
welfare payments, and we're probably going to have to scrap
some of them because we're in a deep, deep fiscal hole.
Would we have said, thank you so much for spelling

(06:41):
it out. We're going to vote national back in to
do these austere and tough measures that we need to
recover so that we've got a country for our grandchildren.
I doubt it. We are just as much to blame.
The party is well and truly over, and it has
been for some time. We've just borrowed to keep it

(07:02):
going and buried our heads in the sand turned up
the music so we don't hear the creaking and the
groaning of the economy as it struggles to keep the
party going. It's time we all grew up, and it's
time both the Prime Minister and the leader of the
Opposition worked together to try and keep the country together
while we work our way out of this mess.

Speaker 1 (07:25):
For more from carry Wood and Mornings, listen live to
News Talks at B from nine am weekdays, or follow
the podcast on iHeartRadio.