The Government stands accused of not doing nearly enough about poverty in last week's Budget because of its aversion to debt, even though public debt is relatively low and it has never been cheaper for it to borrow.
For poverty in that indictment you could substitute teachers' pay, or social housing, or other infrastructure deficits — insert the issue of choice.
But there is a case for the defence. In brief, it goes like this: these social deficits have built up over years, they will not be quickly solved and the present Government is doing a lot more about them that its predecessor.
The budget responsibility rules constitute a promise to the electorate in 2017 and it is important for governments to keep their promises, unless entirely overtaken by events.
And finally, the reasons why interest rates are so low constitute an ominous sign about the state of the global economy and its endless capacity to sideswipe us. Rather than a reason to borrow more, they are a reason not to.
Transfer payments to superannuitants and beneficiaries always represent the largest single line item in a Budget.
Over the five years to 2023, when adjusted for population growth and inflation as Victoria University economists have helpfully done, social security and welfare spending is forecast to rise at a compound annual growth rate of just over 3 per cent in real per capita terms.
That may not sound like much but it is 10 times the pace recorded over National's nine years in office.
An alternative measure, which backs out NZ Superannuation and is not adjusted for population growth and inflation, shows welfare spending increasing at a compound annual growth rate of 5.8 per cent a year by 2023 — somewhat faster than the forecast growth in tax revenue of 5.1 per cent a year.
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Most of that has been frontloaded into the families package which came into effect nearly a year ago. It also reflects the latest Budget's moves to index the main benefits to growth in the average wage rather than the consumers price index and to lift income thresholds at which benefits start to abate.
All well and good, the Government's critics from the left would say, but the increases are from a woefully inadequate starting level.
The Welfare Expert Advisory Group, which reported last February, was unequivocal on that point: "Evidence is overwhelming that incomes are inadequate for many people, both those receiving a benefit and those in low-paid work.
Current levels of income support fail to cover basic costs for many people, let alone allowing them to meaningfully participate in their communities." The group recommended increases of 12-47 per cent in the main benefits as well as sweeping changes to Working for Families tax credits.
It estimated the fiscal cost of improving the adequacy and design of income support to be around $5.2 billion a year.
Such a one-off lift to welfare spending would present a couple of obvious problems, however.
Given the severity and likely persistence of the housing shortage, a good deal of that money would swiftly end up lining the pockets of landlords, without doing much good for the struggling families involved.
And it would push the fiscal bottom line into the red for at least the next three years, violating a promise to the electorate.
It is true that the Government can borrow cheaply at the moment. It got away an issue of 10-year bonds last month at a yield of just over 1.8 per cent, down 70 basis points from six months ago and about 3 percentage points from levels in early 2014.
From an investor's point of view, current yields would not cover inflation and the tax on coupon interest payments.
This is a global phenomenon. Real after-tax returns are even more negative for the 21 advanced economies whose 10-year government debt is trading at yields which are a fraction of 1 per cent. That includes almost all of Europe and Japan. This has "unsustainable" written all over it in big red letters.
At the time of writing, 10-year New Zealand government stock is trading at just 7 basis points above 90-day bank bills. Not quite the inverted yield curve which is a harbinger of recession — as the same spread in the United States now is — but pretty droopy all the same.
That investors — as we call the custodians of people's savings — are piling into government debt at yields so negative and so low is a striking signal about how dark a view they are taking of the available alternatives.
The safe haven of government debt is getting crowded and the mooring fees very steep.
A side effect of a decade of cheap money is high levels of debt. The combined debt of New Zealand households, businesses and the government, measured against the size of the economy, stood at 208 per cent of gross domestic product at the end of 2018, according to the Bank for International Settlements.
For both the United States and China — which are grappling like a couple of sumo wrestlers in a conflict over trade and technology — the ratio was around 250 per cent of GDP, and for the advanced economies as a group it was 270 per cent.
This combination of low interest rates, flat yield curves and high debt levels suggests a global economy that is fragile and vulnerable.
Into this delicate global environment American voters have inserted Donald Trump, an impetuous and narcissistic bully who now has the weight of the United States to throw around and who has a primitive understanding of the world and no interest in learning from anyone left in his Administration who might set him straight.
And to be fair, Trump is not the only world leader one might regard with narrowed eyes and a curved lip.
So the odds of getting through the next few years without an almighty global shock are not good.
When the global financial crisis of 2008 hit, the Reserve Bank had ample scope to cut interest rates from an official cash rate of 8.25 per cent. The OCR today is 1.5 per cent.
So fiscal policy will have to do the heavy lifting next time.
If you are dealing with Kiwis in need on a daily basis, or are an overworked and underpaid teacher, or are frustrated by some infrastructure deficit, talk of bond yield curves and global debt levels will not cut much ice.
But the Government needs to keep a wary eye on these things.
And keep its fiscal powder dry.
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