Guest Post: $90k Debt Day: A Wake-Up Call for Nicola Willis
A guest post by James Ross:
At 10 PM on Sunday 19th May, New Zealand reached the latest in a long string of grim milestones. For the first time ever, government debt will tick up past $90,000 for every household in the country.
$180 billion is a lot of money to owe. But if we’re being entirely honest, when someone says the country is paying $8.8 billion this year just to service a national debt which is well into the 12-figure range and climbing, the numbers are just too big to comprehend.
The huge numbers might go over people’s heads, but the financial pain Kiwis are feeling at the end of every week certainly doesn’t.
To put the numbers into a little bit of perspective, the average household is now paying almost $4,500 a year just to cover the interest on this debt.
That’s almost $4,500 that can’t be spent on food, or rent or heating. Or that can’t be used to pay down their own debts.
We’re paying more this year just maintaining the massive debt taken out on our behalf than we are on the total budgets for the defence force, police, corrections, and customs combined.
And to just really labour the point, that’s without even starting to actually pay off the debt. It’s just to keep the bailiffs away from the door.
The last six years of economic mismanagement have left us in a bad way, don’t doubt that for a second. Government spending shot up 84% without anywhere near enough economic growth to support the cost blowout. But the problem didn’t go away with October’s election, and debt is still only going one way.
The Taxpayers’ Union only launched our debt clock about 8 months ago. Back then, your household’s share was 10 grand less than it is now. At this rate, it won’t be long at all until $100k Debt Day.
Government after Government, including this one, keeps spending well beyond their means. Even if the economy was booming at its maximum capacity, the Government would still be spending more than it raises.
But that’s not to say they don’t take enough of your money in taxes. Far from it, the average Kiwi is paying $49 a week more in income tax in real terms than they were in 2010.
The problem is that as a country, far too many of us have just come to accept getting less for more money.
The Budget comes at the end of the month, and it’ll be make or break for a New Zealand which is listing towards being a poor nation.
The only way out is getting the books back into the black, but Nicola WIllis’ “cuts” so far barely even scratch the surface. New Zealand can’t afford for these not to go much further.
At the moment, optimistic forecasts suggest the next time we’ll see a surplus will be 2026/27, and even then it’s by the finest of margins. That means years more of spiralling debt.
There’s talk at the top that getting back into surplus might not be realistic, but let’s be frank. What’s not realistic is expecting hardworking people to keep finding more and more money down the back of the sofa.
In a few years it won’t be $4,500 you’re having to stump up. It’ll be $5,000, $6,000, $7,000 a year.
Yesterday’s $90k Debt Day needs to be a wake-up call for Nicola Willis. The time for half-measures is over.
James Ross is the Policy and Public Affairs Manager at the New Zealand Taxpayers’ Union
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