Will Government’s fairy tales mask their contagious careless debt?

The most common disagreements in marriages are about money and how to discipline the kids. It gets worse when the family income falls. Some borrow and hope, while others choose to manage their finances proactively. Eventually the financial pressure prompts a conversation. The kids usually know that something is not right outside their fairy tales. Something significant – life changing.

Depending upon New Zealanders’ choices, the Covid-19 rebuild is something that could make our kids poorer than their parents’ generation. For parents that sacrifice their lifestyle for their children’s future – this is doubly disturbing.

Our real-life family conversations

Households manage their finances in hard times by having three honest conversations.

Firstly spending - what is essential, a luxury, and what expenditure did not work. Stopping luxuries is tinged with regret as it is an admission that life has changed for a while.

It’s easiest to stop spending on the things that never worked. Why we spent the money that way is often the hardest to acknowledge – especially if it expressed emotion. Toys, beauty, comfort, and aspiration.

Buying electric cars, or donating to private Green schools like the Green Party indulge in, is typically not considered. No decrease in existing wasteful, out of control expenditure has been attempted by the coalition either. Abolishing $7b/year in wasteful expenditure is possible without touching Health or Education. $1b Shane Jones slush fund, $1b tertiary student subsidies, Kiwibuild ($0.5b), $1b KiwiSaver subsidies, $0.8b overstaffed bureaucracies.

Steps up the ladder

Additional income is the next conversation between parents. Working smarter, in new areas, and longer if required. Necessity is the mother of innovation. All practical ideas are sought. Working four-day weeks like the Prime Minister has suggested is typically not considered. Neither is paying more in tax.

Household debt is the final conversation. Fast credit card debts do not work without income, and need a sustainable payment plan. Our current Finance Minister has no plans to start repaying debt for eight years. Remember that $7b of wasteful spending per year for eight years is $56b of … more debt. Shocks like earthquakes and trade wars can easily occur in that timeframe.

Borrowed and hoped

This coalition government will borrow enough to max out the credit cards of all Kiwis. The equivalent of $200,000 for a family of five over the next two years. The coalition has committed to $140b on top of the $60b debt we owed before Covid.

Hope without a plan is gambling. The government has a “kind word” mask but is making it up as it goes along and has no framework like the best Covid strategies in the world. ACT has consistently recommended Taiwan – four times the population, half the deaths, no lockdowns. When asked about Taiwan – the government scrambles to avoid an honest conversation with voters.

A plan means new optimism

A positive, credible plan for growth brings optimism, determination, and renewed strength to a relationship.

ACT’s reviewed plan enables New Zealand to prosper as an island nation on a pandemic planet. Wasteful out of control spending will go, and we start to repay the debt within three years – five years earlier. We will be well placed for predictable increases in interest rates and other unpredictable events.

Jump starting the economy with a decrease in GST and income tax, and a decrease in restrictions so that more businesses can take a risk and create jobs. Empowering the whole team of five million.

Kids and parents know when they are told fairy tales. This election we get to decide whether this government has been prudent with our money, and how they have prepared the household for the future. It is time for decisions based on wellbeing, an honest conversation, and our children’s future.

- by ACT’s candidate for Mt Roskill, Chris Johnston, who has outlined above, what principles and policies ACT stands for. Chris is a Project Manager who was born in Whanganui and has lived around Mt Roskill and Dominion Road for eight years with his wife and children.