It’s the Grinch that steals presents from under the tree and we should all know why it happens and how to prevent it.
Unlike Christmas, whopping price hikes are not a joyful experience we want to repeat next year.
Household living costs may have fallen to their lowest level since June 2021 with September’s 2.2% number now back in target range but that doesn’t mean Santa’s sack is full of cash this year.
Many Kiwis are still on higher mortgage rates and haven’t had a pay rise to match the annual 4% punch in the guts.
In other words, we’ll either be spending less on gifts this year, using debt to fill stockings or (most likely) spending the same and getting less.
I don’t envy parents having to explain to their kids why, despite being on the “nice” side of Santa’s ledger, many items on their wishlist remain out of reach.
In place of a new Nerf gun or the latest Squishmallow, perhaps we include a lesson on the value of money and what happens when we print and spend too much of it. That’s the supply side.
On demand, we closed borders and factories in the name of stopping a virus we all eventually got, anyway.
Russia’s invasion of Ukraine obviously didn’t help, but the mention of this may be a bit much for the kids’ Christmas stockings?
At the risk of sounding like the drunk uncle at Yuletide dinner, perhaps we adults are also in need of a good lecture on our collective wishlists.
Whether it’s a Golden Mile in Wellington, a gold-plated hospital in Dunedin, a Ferrari ferry across Cook Strait or school lunches of spinach, feta and quinoa, we all need to adjust our expectations to match our current reality.
Treasury tells us core Crown expenses shot up 70% during the Labour years but remain high even under National. The tax take is soft.
Government debt has leapt from below 20% to above 40% and will stay there for at least the next few years before we can start paying it down — even under National.
Sure it’s lower than many other developed countries but we need it to be; we’re a small trading nation prone to natural disasters.
As we look towards 2025, it’s important to take stock of how we got here and remember there’s no such thing as a free lunch. Especially a fancy one.
We’ve now spent more time in bed with the cost of living crisis than we did with Covid and I reckon most Kiwis would say we overcooked it.
Cutting the Government’s cloth is by no means the only or even major means of stamping out inflation but it certainly helps.
It’s a message the anti-Santa Christopher Luxon has tried but struggled to effectively deliver over the past year as evidenced by the south polls he’s been getting.
He and Nicola Willis have been busy laying off bureaucrats, which has led to some bad headlines and can’t have helped his image in the public eye but is designed to help solve the bigger Grinch, which is inflation.
No doubt he’ll be hoping by the time summer rolls around next year this inflation-induced nightmare we’ve all been living will be a distant memory.
I think we all will.
But let’s not erase the memory altogether so we’re better prepared for the next time a Government, of any persuasion, tells us what to do and spends our money beyond our means.
Now that’s a Christmas lesson (or lecture) for us all.
