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Three Waters, Inflation, Interest Rates, what a mess!

Kieran Madden, Director of Research and Development, Maxim Institute, Auckland

Kieran Madden
Auckland, December 19, 2022

As we hurtle towards a much-anticipated summer break, spare a thought for our poor government Ministers.

As we enjoy our hopefully sun-soaked beaches and BBQs, they will be in dimly-lit rooms, reluctantly “murdering their darlings,” as Politik’s Richard Harman put it, reprioritising spending by the end of January at the behest of Finance Minister Grant Robertson.

The government has realised that it needs to focus on economic recovery, not only because it is blatantly necessary, but because it is also going to be critical for them to stand a chance at the polls next year.

“It is very clear that for 2023 our focus has to be the economic challenges that we have in front of us,” said Prime Minister Jacinda Ardern, “so over the summer, we will be thinking about areas that we can pare back.”

Astounding Statement

The Prime Minister’s statement astounds me on three levels.

Firstly, that this government felt the need to tell us that they going to focus on the economy at a time like this. What else? Oh, right, they still need to land: Three Waters, the TVNZ/RNZ merger, The New Zealand Income Insurance Scheme, Health System Reforms, a response to the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP), Hate Speech legislation, electoral changes, local government reforms, education curriculum, and RMA reforms.

Phew! Not to mention the countless working groups and consultations.

Secondly, that the government is paring back at all. I admit being more surprised about this than the embarrassingly out-there “arrogant prick” comment.

I get it; going back on announcements does not look good, but when the facts change, it is often the wisest course. Whilst making the most of an unprecedented absolute majority under MMP to drive through their progressive agenda, Labour tried to do too much at once as the exhausting-but-not-exhaustive list shows; the balls are falling from the air, and the plates have stopped spinning. All at once. It is an absolute mess, but a mess of their own doing.

And finally, that it took us to get into such a dire situation to start to think about pulling the plug on some of these policies. Inflation, interest rates, and cost of living are biting already and will get more painful next year.

Realisation, too late

Rarely does the government face the kinds of trade-offs that all of us have to face?

Borrowing more or going over budget is not an option anymore. But gosh, this kind of restraint would have been welcome earlier, especially given the spending devoted to getting us safely through the pandemic.

So, while this might be obvious by now, I do not feel too bad about our Ministers’ new summer activities. Most families, including my own, have been cutting back on “nice-to-haves” for years while keenly interrogating whether “must-haves” are, indeed, must-haves.

The beaches will be local for my family as we reluctantly enjoy yet another “stay-cation,” and the BBQs, well, more pre-cooked sausages than flash ones this year.

Focusing on the economy is a “must-have” for this government, and about time too.

Let us hope that this is one resolution that will stick.

Kieran Madden is Director of Research and Development at the Auckland-based Maxim Institute, an independent think tank working to promote the dignity of every person in New Zealand by standing for freedom, justice, compassion, and hope.

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