An Exercise In Basic Accountancy


WHY HAS MAKING such a ridiculously big deal out of the whole Budget exercise persisted? The very notion that the government of the day possesses the foresight and skill to successfully diagnose and treat the nation’s economic ills in ways that have not been tried a hundred times before is fanciful. The smart move would be to treat the entire process as an exercise in basic accountancy. Because that’s all it is.

In essence, the budgetary process is about whether or not present state expenditures should persist (with appropriate adjustments for inflation) or be discontinued. Since most state expenditure is committed to activities that cannot be discontinued without throwing society into chaos, practically all of the Minister of Finance’s decisions are made for him. The sick must continue to be treated. The young must continue to be taught. The poor must continue to be housed and fed. The elderly must continue to be supported in their old age. Just attending to these “Musts” consumes practically all of the State’s annual revenue.

Of course a wise Minister of Finance will also keep a weather-eye on the condition of the global economy. Not because he can do anything about it, but because the impact of exogenous economic events – especially negative events – cannot help but affect the condition of the domestic economy. A reduction in the amount of money people spend and/or invest has consequences for the health of the nation’s businesses, the number of its citizens in work, and, most importantly, the quantum of revenue collected by the state.

In a rational society, any shortfall in state revenue would be made up by a corresponding increase in taxation. Unfortunately, democratic states are seldom governed rationally. Governments elected by the people are reluctant to court the wrath of their electors by increasing their taxes, preferring instead to allow the nation’s cultural and physical infrastructure to decay. Or, if the deferral of crucial maintenance fails to produce the savings necessary to keep the “musts” operational, borrowing to make good the shortfall.

Government borrowing poses all manner of potential problems for the nation, but not immediately. In a democracy, this delay between the act and its consequences is precious. Putting the country into debt allows a Minister of Finance to keep the lights on and the ATMs working without raising taxes. That option may become unavoidable at some future time, for some future government, but that is not the present government’s concern – not in the context of a three year electoral cycle. The politician’s motto is simple: “Always put off until tomorrow what is likely to cost you votes today.”

The problem with days of reckoning is that they always come. It was Rob Muldoon who found himself without a chair to sit on when the music stopped playing in 1984. When the game resumed, David Lange, and his Finance Minister, Roger Douglas, found themselves without fiscal options. Something dramatic had to happen to the way New Zealand was run, or the lights would indeed go out and the ATMs stop working. (In 1984 they very nearly did!)

As we all know, something dramatic did happen – “Rogernomics”.

Prior to Rogernomics, Budgets had been newsworthy largely because they were the occasion for rises in government taxes on petrol, tobacco and alcohol. Less frequently they made news on account of minor adjustments to Income Tax. Roger Douglas put paid to all of that.

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After 1984, Budgets became part of the grand theatre of economic reform. Not even the “Musts” escaped the attention of the reformers. The National Party Finance Minister, Ruth Richardson, confronted with another day of fiscal reckoning in 1991, produced what she called “The Mother of All Budgets”. (A reference to Iraq dictator Saddam Hussein’s promised “Mother of All Battles” during the First Gulf War, which should have warned New Zealanders what Richardson had in store!) It was TMOAB that slashed the incomes of beneficiaries by 25 percent – impoverishing thousands. For some Kiwis, Budgets were now events to be feared.

In spite of the best efforts of the political marketing experts, there has not been a Budget to match Ruth Richardson’s TMOAB for more than 30 years. Yes, there have been years in which Bill English (another National Finance Minister) felt obliged to cut back sharply on what he memorably described as the “Nice To Haves”. (Government projects that made life easier, happier, more fulfilling.) But the “Musts” have limped on from one Jerry-built Budget to the next. Those dark clouds gathering on the horizon, however, speak gloomily of another day of reckoning that is fast approaching.

It will not be an ordinary day. Crowded into its 24 hours will be climate change, global financial fragility, the weakening and breaking of supply chains, rising geopolitical tensions, rampant inflation, and the ongoing effects of a global pandemic. To keep the lights on and the ATMs working in the face of these challenges, governments all around the world have been forced to borrow and spend like there was no tomorrow. (Which, with the hooves of the Four Horsemen of the Apocalypse thundering across the planet, may not be an unreasonable prediction!)

The current Finance Minister, Grant Robertson, has about as much chance of holding these grim arrivals at the border as King Canute had of keeping the incoming tide at bay. The budget Robertson delivered today, like most budgets, is a holding operation. If he’s lucky, in a final bid to retain control of the Treasury Benches, he will get the chance to borrow and spend all over again in 2023.

If, however, Robertson is unlucky and/or unsuccessful, then he is unlikely to be too distraught. Indeed, he may feel extremely relieved that he does not have to write the 2024 Budget. And if his assumed successor, Nicola Willis, has a lick of sense she will persuade her boss, Christopher Luxon, to hand-off the job of dealing with the Mother of All Days of Reckoning to Act’s David Seymour. After all, he’s the man with the machete.

Rather than search for a Budget title to top Ruth Richardson’s, Seymour should dispense altogether with the hoopla and razzamatazz surrounding the Budget performance. Since the document he hopes to present will be nothing more – nor less – than an exercise in basic accountancy, that’s the description he should use.

That the phrase ‘an exercise in basic accountancy’ will forever after strike fear into the hearts of New Zealanders is, sadly, as unavoidable as death and taxes.



  1. My accountants advise: Don’t become a chartered accountant. Well, this was during tax season, so he wasn’t in the best of moods when it comes to his job.

    My advise: Start out with bookkeeping (entry level) to see if you’re willing to do the work.

    Let’s put it this way – a ten percent increase in cost of living would be a dramatic hardship for much of New Zealand.

    A ten percent increase in cost means that things like programs for the developmentally disabled, go away. Aid, help, housing, defence, police – just more people on the street. As someone with said developmentally disabled in my family, that fills me with a deep, abiding rage.

    Increased cost means less money for things like basic or applied research.

    Your tamariki and mokos may never see a flooded city or starve, per se, but they’ll be paying for our actions for the rest of their lives.

    • Sam Our mokos may not see a water flooded city, but they’ll see cities flooded with strangers and that’s happening right now. My bland suburb is Little Asia, particularly when I’m out at night, and I’ve long thought it likely we’ll be Chinese probably by attrition; Brits came for the land and resources which we still have in abundance, as well the water which we generously give away free to our mates.

      I don’t regard Ruth Richardson as a normal woman or human being, I don’t know what the short repulsive strutter is, but if the Nats produced something like her again then the charities need to start rebuilding workhouses. English is another sociopathic dwarf trying to convince himself he’s God’s wee buddy, and God’s hairless buddy Luxon is indescribable. This country lost its soul, maybe back in the 60’s / 70’s when the hippies and peace movements elsewhere were busy finding their’s. We’re as arid as hell, but I’m not sure about the rest of the world right now and like the man says, there’s the unpredictables. Kia kaha.

    • But you would chop aforementioned programs to keep living costs from going up?

      Perhaps the rich pricks should be made to pay a bit more tax so we can have some more services?

    • in other words welcome to the deep south welfare queen states that rightards admire so much
      …shame there’s no federal bailout for NZ

    • Your points are thought provoking, Sam. In particular, I agree with you about our actions having consequences down the track for the younger generations.

  2. Apart from infrastructure projects becoming crazy expensive, remember the scope of global climate change – infrastructure will need to be rebuilt/retrofitted every 10-20 years.

    Apart from that what you should be concerned about is actual great walls. Border Guards that put Nazi SS to shame in brutality supported by populations living under siege mentality. Climate change will first strike at China, India Pakistan and overpopulated Africa.

    Western Civilisations will survive in body and mind and once again becomes powerfull, It just loses its soul.

    • A bit hyperbolic Sam?
      I don’t know if it was a good idea putting James Shaw in charge of the climate, he’s completely overdone it, as ideologues are wont to do.
      We’ve had decent frosts here in Northland in early May and now the South Island blanketed in snow. Winter hasn’t even started yet; we’ll be freezing our nuts off before he wakes up.

      • Science knows enough aboit thermodynamics. In the event of an ice just charge C02 sediment, release and youll raise global average temperatures over one generation. In general it’s easier going up than down.

        • I am replying to David George.
          What fart-arsed nonsense! Hot summer temperatures started in late November, and have only just subsided.
          I am in my 70s – I know that we had hot temperatures like this when I was young, but it was just for a period of a week or so – not most of the entire summer. Here in Hamilton we have had only 2 very light frosts, and the South Island is nowhere near “blanketed in snow”.
          You are a very wishful thinker.
          And if you look into the patterns of global warming, you will learn that we will have very cold spells in winter, as the cold of the Antarctic leaves the Antarctic, moving North and affecting us. This has been in process in the Northern Hemisphere for some years: USA and Europe freeze, while the all-important Arctic warms and melts.
          The same fatal (for us) process is now starting in the southern hemisphere.

      • The Frosts ate caused be Weather. Thats about as linked to climate change, as you are to a fish. Its a real tenuous connection

        • it’s not any specific measurement on any specific day it’s the frequency of what were extreme weather events.

  3. There’s some people deeply disappointed with the budget:
    “The budget does nothing to address LBGTQI transqueer climate poverty in Aotearoa”
    – Marama Davidson (Greens co leader)

    I don’t even want to try and guess what “transqueer climate poverty” is but I’m sure a few billion would help, aye Marama?

    • David George, The simple answer to solving the problem of ‘trans queer climate poverty’ in New Zealand is for everybody to identify as the biological gender with which they were smitten at both. There we are. Not always easy, but sometimes that’s how it has to be.

      I’m blowed if I know how climate change affects the different genders differently though. The thunder and lightening at 6.10 this morning hit the whole street indiscriminately, and our sadly shrinking West Coast glaciers do not seem to be taking any heed of gender variations among the persons they’re impacting on. What’s Davidson on about this time ?

    • trans queer climate poverty, IS FUCKIN HILARIOUS THAT’S WHAT THAT IS…worthy of brass eye or ‘the thick of it’

      IF it happened?

    • Perhaps trans queer climate poverty is when it’s cold the ladies tackle shrinks a bit and they can take less pills or something…and when it’s hot the tackle hangs down a bit more….and they need extra pills…sorta like arthritis in the cold can get worser …

  4. The mother of all budgets….I remember it well….I was one of those nasty beneficiaries that were bludging off the tit of the state…as Banksy would say…don’t mention the helicopter ride…ooops , I mentioned it once but I think I got away with it….I was on the DPB looking after my two year old son. Much to my amazement my video hire purchase payments ended and my son went out of nappies the pay before…l was thirteen dollars up after being docked fifty dollars…bugger me….what seems to have been forgotten was that within a short time my payments were back to the same…possibly eighteen months , I can’t remember exactly, but it was not long…benefits were reduced because they were looking very good as a lifestyle choice , and of course Phil Goff being minister of mass sackings , five thousand in one week I think was his personal best….with the Douglas Richardson religion of reducing wages and salaries in New Zealand, why I don’t know , and of course the CEO folk adding an extra zero to their package , benefits were a life saver for some….I wonder when some brave young finance minister will wake up to the disaster that Douglas inflicted on us all here in New Zealand and bit by bit start to sort the mess out… the cartoon in the paper said about Douglas…..I get a nighthood , you get a nightmare….

      • He’s being satirical in the main covid pa. Don’t take everything at your value or face value – what’s behind it? In my view the social welfare workers are full up of prejudice against beneficiaries, but probably the 80:20 equation works; and also the other way for beneficiaries – 80% pretty good to very good and the other 20% pretty bad to very bad.

      • I agree with you Covid….I have seen the best and the worst…the real needy and the lifestylers ….tell me what was the unemployment rate before the 14th of July 1984…

      • You are correct Covid…we have both been there and done that…but some will see beneficiaries as that , because they battle for a living…..I remember being on the dole….they money wasn’t that good but the hours were ok…there are no winners from mass unemployed …

    • I’m waiting for the Labour Party to wake up to the disaster that Douglas and Prebble inflicted on us – even before Richardson got started.

      • Let’s remember that someone had to do it. NZ was completely broke & broken after Muldoon.

        None of the moaning critics ever off their alternative.

        • Not true Robbie…New Zealand was meeting its payments fine….Douglas let slip that he was going to devalue the dollar…money speculators world wide bought New Zealand currency knowing they would make a nice profit…they did….we nearly ran out of money…Muldoon tried to stop the cash slaughter and got hung out to dry for it…Douglas cost four billion dollars in currency loss before he even got started…if you tell a lie long enough it becomes fact eventually….It certainly wasn’t perfect under Kirk , Muldoon…but tell me ..who has done well out of rogernomics and who hasn’t…

          • indeed the ‘crisis’ was deliberately engineered by monetarists at the treasury.. they were proud of it, once the crisis was created they could step in and ‘solve’ it…essentially a treasonous plot against the people of NZ.

      • What do you think killed David Lange in the end the lying fxxxwits that are still around today spouting their opinions that is ACT. These are the ideologies of a sick bunch of politicians named among a few Douglas and Prebble , so you right wingers who want power at all costs be careful what you wish for, Willis said the other day if she were finance minister there would be no inflation and how would she achieve that ????

  5. Robertson holds a book proudly. Is it Accounting for Dummies – I don’t see clearly? However that makes me feel close to him as we obviously share the same failing.

    • David is just yet another bigoted bible basher who thinks that being trans is an abomination and should lead to jailong

      • I don’t know what being trans is like but for sure people like David George, Luxon the Bald and seemore are most definitely not the people to be answering that. Can’t spell success without combined sex.

      • I think it’s a joke millsy. Funny because it’s believable?
        Less of the assumptions and derogatory accusations would be good.

  6. ‘In a rational society, any shortfall in state revenue would be made up by a corresponding increase in taxation. Unfortunately, democratic states are seldom governed rationally.”

    I know of no one alive who agrees with you – for that is total nonsense. There were those, now long time dead, who mistakenly did believe that. Since the election of Labour here in 1935, and FDR in the USA (1932) that changed. They had higher hopes for government, they got created jobs building stuff – dams, houses.

    There is something called an economic cycle. An intelligent or even semi-useful Treasury informs government about such. Governments stimulate the economy with deficit financing at sometimes and runs surplus and pays down debt at others.

    RBG over do the laxity and then over do the tightening up. Just to complicate matters for government and Treasury. Etc , it is accounting but the forecasts are based on a continuing journey of the nation state government ship in an economic world (including money markets and longer term debt financing).

    • Again aren’t prices different from what the markets are able to pay?

      Market mechanisms like pricing ain’t worth the paper they’re written on. How’s the market supposed to signal scarcity when the permafrost has already exploded?

      We know politicians and captain’s of industry lie everyone gets that.

      So eat your cheeseburger, now! You won’t be able to afford it or it will be made of 95% meat substitutes and probably 4% insect meat (purposefully farmed for this).

      You’ll see a sharp rise in the price of groceries making the recent lighthearted view on food security by the middle class be a thing of the past. You might see grocery bills eating a larger chunk of a family’s budget.

      Taxes for infrastructure will also increase as previously established infrastructure must he retrofitted for the new climate it is finding itself in. I expect the South Pacific will soon need to engage is vast renovation projects and do it again every 10 to 20 years from now on until the climate stabilizes in what this rate is looking like centuries.

      Price that in Babylon.

  7. Hello everybody! It’s Countryboy here, The Filthy Fama Dahlings. Read anything of mine lately? Mostly about farming, farmers and everything political? No?
    Well, you’d better read the fuck out of this then.
    George Monbiot. The best writer The Guardian has.
    Our farmers are crushed by bankster nodes until all they can do is work harder for increasingly, decreasing less and they must because their farm is a living, breathing organism that requires constant nurturing, maintenance and attention. And that’s 24/7-365 for you whiney forty hour a week’ers.
    The *producer boards, distributors and marketers make the Big Money while the Filthy Fama must suck the saveloy and take what’s given them. In other words, and I’m going to be crude here, farmers are nothing more than the Bankster’s Bitches. And you, dear city person’s will pay ever more dearly for your delightful ignorance’s and prejudices.
    * Read primary industry cartel-like hangers on behaving in a less polite manner than a motley crew of well armed mafioso caught between the cops, cocaine and a big pile of U$A $100 dollar bills.
    BTW. This budget? Like all previous budgets? It’s all farmer money maties. Don’t like the idea of that? Well, never mind didums. At least you won’t starve to death. Or will you…?

  8. Totally correct Chris. Its all theatre and just underscores why we need a new political system.

    As I am sure you know, Brash and Hide reprinted your 2004 speech on their site. It is entirely relevant today and I think you should republish it here. Although its long and may need tweaking, It absolutely hits the nail on the head about how we need to move forward.

  9. What Chris ignores is that many lifelong Labour voters such as myself (only 2 elections elsewhere since Norm Kirk) are not overwhelmingly interested in any economic (we own our own homes & we know how to work) , environmental/climate, (we’ve lived through a lot of bad weather before) poverty (weve all been poor before, in my case more than once), woke, “ToW principles partnership equity” or other academic distractions. The single issue that we will vote on next year is killing co-governance, because we know that its wrong in our democratic bones.


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