Matters of Life and Debt
“A billion here, a billion there, and pretty soon you’re talking real money.” This was the famous caution attributed to US Senator Everett Dirkson back in the 1960s. It could equally apply today.
Vast amounts of well intentioned spending of Kiwis’ money has taken place recently and this will surely continue. It’s important to acknowledge that a certain amount of this debt we’re incurring is directly related to the COVID-19 pandemic and so is inevitable. Any political party in government would have been borrowing in the short term to keep us afloat through sensible measures such as the wage subsidy. Credit where it’s due.
It will all need to be paid back, though, of course. The timeframe of the debt repayment varies according to political parties’ promises, so to some extent we’ll know the answer after the general election that is nearly upon us. But to a large extent it also depends on what other external winds may blow across this land in the coming years.
We know all too well that rebuilding after major quakes is earth-shatteringly expensive. We also know that global financial crises leave few economies unscathed, as the “global” bit would suggest.
Given that some debt is inevitable, therefore, but also given that another rainy day of some kind will surely come soon, there should be two broad priorities for the incoming government: keeping the debt as low as reasonably possible and ensuring that the borrowing that does take place will have a positive effect in terms of economic growth, including (but not limited to) short-term economic growth.
The first bit – keeping debt low – should mostly focus on allowing Kiwi small and large businesses to get on with producing goods and services with as little government interference as possible. The RMA, “health and safety” zealotry, the burden of high taxation and discouraging labour laws come to mind.
The second bit – borrowing to create growth – revolves around the need for investment in young people (which my Party calls “social investment”) and also building the infrastructure needed to actually get us moving. We desperately need this, as a matter of reality and not merely rhetoric.
Please vote, whoever you choose to vote for. It’s our right and our responsibility.
Cheers, Chris Penk (MP, Helensville)