As Leader of the Opposition, John Key declared that "New Zealand doesn't have a debt problem, it has a growth problem". More than a decade later, nothing has changed.
Key's ambitions to be a local Lee Kuan Yew and invest in infrastructure to deliver the "step change" he promised were thwarted first by the Cullen recession, then by the global financial crisis and most decisively by the Christchurch earthquakes.
He did borrow and spend massively on infrastructure, but it was mainly to rebuild what had been destroyed in Christchurch rather than on new projects.
While any comparison will offend both, Finance Minister Grant Robertson has turned out to be the true inheritor of Key's mid-2000s manifesto.
Robertson's announcement at his party conference that the Government will significantly increase spending on infrastructure reflects exactly the main message from the Herald Mood of the Boardroom survey that New Zealand is at an infrastructure crisis point.
No other issue came close. Business leaders urged the Government to use its strong balance sheet to invest in roads, rail, tunnels, pipes and ports, and on other bold and transformational social, environmental and economic initiatives, particularly in Auckland.
The Government's initial $400 million for schools has been welcomed by business but should be seen as no more than an immediate political and stimulatory move.
Any decent Education Minister prefers to spend on what goes on inside classrooms rather than painting the outsides, so the deferred maintenance liability always creeps up, requiring a big catch-up every decade or two.
Clearing this backlog will help the Government shore up its base among teachers and parents before announcing much more significant and controversial projects. Meanwhile, giving schools a lick of paint over the next six months is far more likely to immediately stimulate the economy in the way the Reserve Bank wants than, say, announcing that construction of a new expressway will start in 2022 rather than 2025.
National's response to Robertson's announcement is confused.
Among the most important reforms of the Douglas-Richardson era was the adoption of accrual accounting, rather than the old cash-based government accounting system. This genuinely was New Zealand leading the world. It meant a Government borrowing $10 billion for welfare handouts would be accounted for differently than it borrowing $10b for new expressways, railways, dams, tunnels or pipes.
A Government balance sheet was established for the first time and the focus was meant to shift to its net worth, which has improved from $14b in the red in 1991 to over $130b in the black today.
The more recent political focus back to net debt alone is ironically a return to Muldoonist financial management. The previous and current Governments' commitment to getting net debt down to 20 per cent of GDP by 2020 meant that $10b on welfare or $10b on a new expressway would be viewed politically as the same.
Robertson has tried to break out of this straitjacket by lifting his net debt cap to 25 per cent of GDP but that continues to treat capex and opex as identical.
He and National's Paul Goldsmith need to shift the public debate back to the balance sheet as a whole.
Goldsmith, who also listened carefully to the Mood of the Boardroom and is well connected in Auckland finance circles, is understood to have begun working on his own infrastructure package, but Robertson has trumped him.
Others in National, perhaps including Simon Bridges, seem not yet to accept that long-term interest rates are a factor in whether a business or government should back a project. To argue fiscal policy should be the same when long-term interest rates are 1.3 per cent than when they are twice, thrice or four times that level betrays a frightening lack of knowledge of financial economics.
Moreover, neither side of the political aisle has yet responded to how profoundly wrong New Zealand's population forecasts have turned out to be.
One of the few journalists to have raised the issue is the Herald's Liam Dann, who points out that 15 years ago New Zealand's population was not forecast to reach five million until 2050. In fact, it will hit that number next year, 30 years earlier than forecast.
In other words, the infrastructure our bureaucrats thought we might need by 2050 is needed right now. If a business suddenly found its forecast customer numbers had arrived 30 years early, it would adjust its investment plans. Until now, both Labour and National have seemed to assume no major response is required.
Despite Robertson's announcement, Wellington still lacks the sense of urgency towards the Auckland infrastructure crisis that it adopted when Christchurch had not dissimilar acute infrastructure needs after its earthquakes.
The plan is for today's politicians and officials to ask the ageing Alan Bollard of the Infrastructure Commission what to do. We are lucky that Bollard didn't act with such little confidence in his decision-making powers when he was in his prime in the 1980s and 1990s.
The idea that a Wellington bureaucracy can be given a blank slate, with no indication of the Government's priorities, and decide where and when every road, railway, tunnel, power station, pipe, port and airport should be built is not one with which Bollard himself would have agreed as secretary of the Treasury or governor of the Reserve Bank.
In a crisis such as Christchurch faced in 2011 and Auckland faces today, bold political leadership and decision-making is called for. Forget polls which say the election is too close to call. If Robertson acts boldly and decisively to deliver on his conference announcement and National continues to dither, Labour will romp home in 2020, and also 2023.
- Matthew Hooton is an Auckland based public relations consultant and lobbyist. He is one of a number of people helping the newly launched Waterfront 2029 campaign pro bono.