When this Government first formed, I argued that key members involved in the negotiation process believed an enormous crash was looming, and that once that economic crash occurred, we would see a genuinely transformative Government.
The only problem was that economic crash didn’t happen.
To breach the debt agreement Grant and James signed us up for to placate our Corporate Overlords, we needed an economic crisis. The crisis hasn’t occurred, so Grant hasn’t been able to breach it.
You see this reality being teased out now by journalists as they probe what is going on…
Finance Minister Grant Robertson has been steering a careful line by gently paving the political path for a possible “cave-in” on the Government’s debt reduction target while at the same time signalling he does not intend to jump the gun.
There have been growing calls for the Government to get out its cheque book since the Reserve Bank slashed the official cash rate to 1 per cent in August, drawing attention to the risk of a strong economic downturn and negative interest rates.
Robertson has responded by repeating the message that the Government’s promise to operate at a surplus and its goal of reducing core government debt to no more than 20 per cent of GDP during the 2021-22 financial year was always subject to a get-out clause.
That caveat includes there being no “major economic shock or crisis”.
…we need an enormous borrowing campaign to rebuild the infrastructure and fund social services properly but to trigger that borrowing campaign we need an actual crisis.
This is leading to political stagnation, the Government can’t be transformative if there isn’t a crisis to spark it off, so Grant might secretly wish there was one.
What should the Government do when the comic crisis hits? Once the crash is moving, Grant can dump his budget restraints nonsense and borrow to keep NZ afloat. Luckily for us we have one of the lowest public debts around and have room to move that other Governments won’t. With that extra money, I suggest creating two lists – those you save and those you allow to burn.
DAIRY FARMERS: They are up to their eyeballs in debt from Dairy Intensification. To get them to agree to helping everyone else, you need to help them and this could be a once in a generation move to get then to change their allegiance to National. Underwrite all Dairy Farm debt on the agreement that they revert from Dairy to planting forests.
FIRST HOME BUYERS: You can’t leave them for the wolves of the market, under write their mortgages through Kiwibank.
MUM AND DAD’S INVESTMENT PROPERTY: You can’t wipe out an entire generations wealth base, again underwrite one property over the family house through Kiwibank.
CORPORATIONS: Fuck em, let them burn.
BANKS: Only save Kiwibank, the others can burn.
PROPERTY INVESTORS: Anyone with more than a family house plus one property investment can burn.
TAX AMNESTY FOR SMALL AND MEDIUM BUSINESS: They are the ones who will suffer the most, allow a tax amnesty with the usual penalties cancelled.
WELFARE: Everyone will be scrambling for some type of welfare, it will need to be increased, and the draconian punitive crap dumped.
IMMIGRATION FREEZE: We will need to freeze immigration at a time of economic crisis because everyone will be fleeing.
This next economic collapse will shape NZ for the remainder of this century, this is to be the chance for the Left to reshape the neoliberal economic agenda, the question is are they intellectually ready for that?