Finance Minister Grant Robertson (left) and Prime Minister Chris Hipkins. Photo / Mark Mitchell
OPINION
It’s a funny thing, pride. Too much of it and you can come across as arrogant or buffoonish. Not enough and you can become lazy and dependent.
You can’t buy pride, but we can all be proud about some things: our children perhaps, or our job or where we live. Others can see the pride we have in ourselves: the way we speak about a favourite topic, our personal presentation, a clean car, a mown lawn, a sharp suit. Someone who turns up on time. Someone who turns up at all.
Pride is self-fulfilling. It can drive you to be better each day and perhaps get a promotion, or an opportunity to learn new skills. Skills can lead to qualifications. Qualifications in turn can lead to an opportunity to get a better job or increased pay.
Pride is the output of many things. A good upbringing may ensure pride in your family. A good education results in confidence, standards and pride. A lifetime of support for a school or sports team engenders a sense of pride.
Many of us will be, or once will have been, proud of the country we grew up in. It’s part of who we are. Our grandfathers and uncles fought in wars, where we acquitted ourselves well. We grew up hearing the stories. Stories that affect our personalities and our patriotism. That’s why we face the flag and sing the anthem.
A sense of pride will influence how we conduct ourselves, how we present ourselves and how we behave. Pride affects the effort we put in to achieve a goal, win a sporting contest, or help someone in need.
And pride in yourself gives you confidence. Confidence to try things, to help others, chase new experiences. To put your name forward or to volunteer. To go after a job that’s just out of reach but not out of sight. To back yourself. To have a go.
I’d like to think I’m proud to be a New Zealander. I was born here, educated here and had my first jobs here. I watched my parents work hard here and learned the value of working to get to a better place.
As I travelled overseas, I was always a Kiwi. And a proud one. When you travel, the All Blacks, Team New Zealand and people from the past like Sir Edmund Hillary and Bruce McLaren seem not so far away. Typically, we are passionate about our country, and for good reason.
But that passion is gradually fading. We hear people talking about leaving. They’ve had enough.
This week, two events in particular stopped me in my tracks and forced me to question my pride in my country.
First, I was sent an article that had appeared online. The headline alone stopped me. I sent a note to an economist I know. “Can this be true?” “Yes,” came the reply.
Gee, I thought. I know we’re not going very well at the moment, but are we really that bad?
The second incident occurred on the campaign trail. For some reason known only to itself, the Government decided to make government spending a headline. Almost gleefully, it announced that, in responding to the cost-of-living crisis, its new economic policies would include a $4 billion cut to government spending over the next four years.
Four billion dollars in savings. That sounds like a lot – and it is. But it’s not. One of the problems with politicians is that they throw out numbers. But a number on its own says nothing. To be useful, a number must be comparable with another number.
Four billion in planned savings! Both the PM and the finance minister championed the announcement as something special. In doing so, they are either being deliberately misleading or they don’t understand what they’re talking about.
The problem with the $4b announcement is the lack of relativity. So at the risk of boring you for a few paragraphs, allow me to put some context into those $4b savings.
When the Labour-led Government took over the Treasury benches in 2017, total Crown expenditure was $99b a year. Over the previous five years – 2012 to 2017 – that number had grown from $92b. So the total growth in government spending immediately before their arrival was $7b, or 7.6 per cent, over that five years, about 1.5 per cent a year.
In the five reported years since 2017 (2023 results are not yet published), our total government expenditure has gone from $99b to $151b. The increase in total Crown expenditure in that time is $52b, or almost 9 per cent a year.
As if this wasn’t enough, in the 2023 Budget unveiled in May, the Government announced plans to spend an additional 32 per cent over the four years to 2027. This would amount to a further increase of $92.5b, on top of the excessive spending that has been allowed to build up over the past five years.
This despite the evidence that the tax take is no longer meeting expectations, as company tax in particular is hit by the early stages of what might be a prolonged downturn. Most people in most households will understand that increasing expenditure more rapidly than revenue is a recipe for disaster.
As a result, we also learned during the week that the Government is going to have to borrow an additional $15b over and above what was budgeted to see it through the current shortfalls.
So this Government, which has taken our borrowing from $60b to $160b in just six years, and our total annual government spending from $99b when they took office to over $150b today, with plans for another $92.5b over the next four years, appears to see cause for celebration in its announcement that it will cut that future spending by $4b – which I assume makes the total increase “just” $88.5b!
Here’s what worries me. In order to solve a problem, you have to first understand it. If they think $4b makes a difference to the country’s prospects, they don’t understand the problem.
But then the $4b play is just that. A play. A headline in the scramble for undecided voters. It’s a drop in the bucket. We don’t need to save $4b in the next four years. Given this Government’s reckless approach to spending our money, we need to find $40b of savings in a hurry if we are going to rescue this country.
The opposite of pride is embarrassment or shame. When I read this year that the current account deficit of this little country, as a percentage of GDP, was now the worst of all the countries in the OECD, I was disappointed and a bit embarrassed. Maybe I’m too competitive, but I want us to be better than that.
And then this week came that article I mentioned earlier. It says the latest International Monetary Fund data projects the NZ economy to have the second-lowest GDP growth in the world in 2024, placing us in 159th place out of 160 countries, alongside Italy. Fortunately, we were beaten into last place by Equatorial Guinea.
Just consider that. That means our GDP outlook for 2024 is worse than almost every basket-case economy, every war-torn country, every collapsing state, except for one. Worse than Zimbabwe, Greece or Venezuela.
My pride is quickly turning to embarrassment. Because I feel we should be doing something about it and people like me should be helping. But at the same time, we are powerless to do so, as long as those in the Beehive continue to fail to understand the problem.
As our politicians repeatedly fail us, there is an interesting question. At what point does incompetence become negligence?
Our finance minister continues to stand atop our “podium of truth” and say most of our inflation problems are generated overseas and that our books are in good shape, especially compared to our trading partners.
The facts are starting to assemble and the reality is that New Zealand’s economic measures are woeful on every front.
As we face an election, there are voters questioning whether they can trust those who would replace the current mob. Surely, even the most strident Labour Party supporter must be coming to the conclusion that, when it comes to running the economy, the least trusted option is the incumbents. A new Government is unlikely to be worse.
As we line up to borrow another $15b, we should be ashamed of the money wasted. A would-be media merger, a cycle bridge and a light rail line to nowhere. Millions spent with nothing to show for it.
My pride in my country will return. But I have to admit, it’s a little shaky at present.
- Bruce Cotterill is a company director and adviser to business leaders. He is the author of the book The Best Leaders Don’t Shout and host of the Herald’s new podcast, Leaders Getting Coffee. www.brucecotterill.com
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