OPINION
Media coverage of the PREFU was as expected – completely upbeat: we have nothing to worry about, the economy is in safe hands despite the Minister of Finance heading for the exit door as fast as his chubby little legs can carry him.
Finance Minister Grant Robertson said New Zealand’s economy is “holding its own in an uncertain global environment”.
That uncertain global environment is the fallout from the world collapsing over a bad strain of the ’flu which Robertson unwittingly heaved $61.6B of NZ taxpayer funding at.
What else, besides lockdowns, quarantine hotels, vaccines, masks and policing the Covid rules, did they spend large on? I’m guessing consultants (because the government lacks in-house business experience, as evidenced by their widespread use of working groups pre-Covid), media buy-offs, Covid websites, advertising and forming the Disinformation Project to censor content running contrary to their safe and effective vaccine claim.
Robertson said it had been an “extremely tough time” for many New Zealanders, but today’s update showed government finances that were solid, resilient and a “cause for optimism”.
MSM agreed. PREFU coverage simply parroted Robertson’s unsupported optimism, wilfully blind to the elephant in the room, which is exorbitant debt from uncontrolled government spending, a legacy to shackle at least the next generation.
Media coverage of PREFU was glib and vague, any mention of disturbing numbers was accompanied by lame excuses.
Crown expenses – government spending – remained “elevated” this fiscal year, it said, and was $6.9b higher across the forecast period (2024 to 2027) than anticipated in May’s Budget update.
That elevated spending was due to “decisions at Budget 2023, the rephasing of unused spending from the 2022/23 fiscal year, the response to the North Island weather events, and the increasing costs of debt servicing”, it said.
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We know extreme weather events are unpredictable, unavoidable and expensive, but debt servicing is not. Households have been forced to cut their cloth to fit the much higher cost of living this government has inflicted on us. It is only fair that the government follow suit and reduce their spending accordingly.
Robertson said the economy was “turning a corner” but that challenges remained “very real”. What did he mean? Your guess is as good as mine. Predictably, media, more interested in keeping the public calm about high public debt, didn’t bother to ask.
I doubt Robertson referred to the inevitable change of government which will hopefully put finances in the hands of competent business heads with the good sense not to spray it around.
Most likely Robertson is simply politicking – setting the scene for this government in opposition to claim they left an improved financial position after turning the corner – but it’s not true.
Former Reserve Bank senior economist Michael Reddell joined Breakfast this morning, saying that Aotearoa is dealing with “some of the largest deficits in any advanced countries“.
“The further up numbers look good, but the only reason they look good is because the Treasury uses spending numbers that [Finance Minister] Grant Robertson’s given them and said ‘these are our plans for the years ahead’. Treasury themselves comment on the document, ‘we don’t really believe these numbers, minister’.
“The near-term numbers, they’re bad, the medium-term numbers really never make sense to pay much attention to.”
For the next 15 months, Reddell said Kiwis can expect the Official Cash Rate (OCR) to remain high and potentially continue to rise to bring the 2.7% inflation rate forecasted in 18 months down to the Monetary Policy Committee’s target of 2%.
He said since the beginning of Covid, there had been “basically no productivity or growth in New Zealand.
“In the last three or four years … we really haven’t achieved any efficiency gains across the entire economy in that time … it’s just not obvious why we’d suddenly start to see that over the next two to three years, and if we don’t see that, then we won’t see the wage increases that Treasury’s forecasting in those numbers.”
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To speak plainly: Robertson presented optimistic PREFU numbers that neither Treasury nor a senior economist has confidence in, and the three little monkeys that comprise MSM took no interest in digging deeper. With an election looming, most New Zealanders rely on MSM for accurate news reporting and this ‘news’ was anything but.