I had planned to put my thoughts down for many months but every week something fundamental changed and uncertainty increased.
As we head to an election and have recently had the gloomy Treasury fiscal pre-election update it is now time.
NZ is in a mess. I don’t need to tell you that as you know it already. The cost of living is now making food unaffordable for many, with rent and mortgage interest rate reviews now causing extreme stress and hardship. This is not over as many mortgages have not yet rolled over to the new interest rates. We have a country divided on many fronts: – Pakeha v Maori, climate change activist v denier, town v country, those with a house v those who can never have a house, vaxxed v unvaxxed.
Why are we in this mess?
The previous National government in the GFC of 2008-2009, stopped spending on core services. This meant that services such as health, education, and police were grossly underfunded, with teachers, health workers, police, and many others underpaid as a result. The Government’s books ended up great [that is we maintained good international credit ratings], but only because of underspending.
The private sector stopped building as many houses, so builders stopped taking on apprentices. The State sector could have built more but didn’t, so a housing crisis was in the making. Those who could not get apprenticeships then left for the big money of the mines in Australia never to return.
All this “kicking the ball down the road” would come back to bite us and has.
The present Labour Government in the last 6 years promised to end child poverty, people living in cars and to build 100,000 houses in 10 years. Wellington was to get moving, there would be light rail and second harbour crossing in Auckland, cycleways all over and ……………
This did not happen.
Instead, the problems all got worse. RBNZ printed money, Government spending increased 70% – with worse outcomes, resulting in much higher interest rates and severe cost-of-living increases. This was a mistake.
There is little money left in the State piggy bank to fix all this leaving NZ citizens and taxpayers now to pick up the pieces and pay for the mistakes.
Tax rules have become much more complicated and now catch out innocent and ignorant taxpayers.
None of this will be fixed anytime soon. We have 4- or 5-years pain to come even if there is better economic management.
One major issue with economics and economic or fiscal management is that it does not care for the individual. Only the big picture counts. Somehow, as a country we need to care for those without a job, without a house or unable to cope with the cost-of-living increases.
My view is that we are heading into stagflation [high inflation, high interest rates, and depressed economic activity and incomes]. That is unless something fundamental changes for the better.
My view is that the predictions of lower interest rates, lower inflation and all is fine in our “rock star economy” are sadly misplaced. There are many worrying signs locally and internationally that contradict those predictions. 2 or 3 years ago the economic predictions were that inflation and interest rates would remain low until the end of 2024. That was not to be. Now many who relied on those expectations are in serious financial trouble which will only get worse.
Caution, reduction of debt, and careful financial and business management are recommended for the next 4-5 years both at a business and on a personal level.
Will politicians save us? No, although some policies are better than others.
So, it is up to you!
MY PLEA back at end of 2020 was for a plan to leverage NZ out of Covid-19 impact using Collaboration of Government, business, farmers, unions, schools, universities and the people all working together. After all, we are a country known for innovation and the can-do attitude [the no 8 wire mentality}.
Leaving it to politicians or bureaucrats, who do not work in or know the real world, was never going to work.
It didn’t!
So, we are much worse off than in 2020.
Now we need to do better on all levels. Much better.
What we need is a VISION for NZ. A nation where people are productive, properly rewarded for what they do, able to live in their own house, and afford to have a family and all the normal things of life.
So, it is up to Us together!
MY PLEA therefore for 2024 is: –
Let’s revert to being ONE PEOPLE.
A nation united for the common good of ALL citizens.
A nation that CARES AND HELPS the disadvantaged, the underprivileged and those in need.
A nation that VALUES FREELY HELD OPINIONS and respects the right to hold and express them.
A nation that WORKS TOGETHER and collaborates for the common good.
A nation that is a POSITIVE EXAMPLE to other nations.
Let our Government be the servant of the people – the citizens – as it is meant to be and do what is in the best interests of everyone.
Let our Government actively collaborate to get NZ moving.
Let our Government eliminate wasteful spending that does not provide the valuable core services with good outcomes.
Let our Government encourage initiative.
Let our Government listen and heed what the people say.
Let Employers and Businesses Reward all those involved in making their businesses thrive.
Let’s change to a win-win approach! Where All benefit.
Individually, let us care for our neighbours, making sure that are ok and helping out if they are not.
If we have received a helping hand, pay it forward so someone else can benefit.
Imagine the result of all working together! A country we can be proud of again.