Tim Dower: If we keep borrowing, we will turn into a debt basket case

Author
Tim Dower,
Publish Date
Wed, 13 Oct 2021, 9:08AM
(Photo / Getty)
(Photo / Getty)

Tim Dower: If we keep borrowing, we will turn into a debt basket case

Author
Tim Dower,
Publish Date
Wed, 13 Oct 2021, 9:08AM

The Government's books are supposedly in better shape than expected. 

The Finance Minister revealed a deficit, a business would call that a trading loss, of only $4.6 billion. 

Mmmm...we lost $4.6 billion. 

That said, the Budget picked a number more like $15 billion, so it could have been a lot worse. 

But one thing caught my ear in the announcement. 

Kainga Ora properties (what we used to call Housing New Zealand) are on the books as assets. 

But is it really truthful to call a property portfolio that LOSES money an asset? 

Minus $20-30m a year sounds more like a liability to me. 

And that's AFTER it sucked nearly a billion out of WINZ in rent subsidies. 

Of course, we need to have cheap housing, but doesn't expanding Kainga Ora's portfolio just feed an ever-growing liability for the taxpayer? 

And while I'm on this point, the Government says the value of all its property and equipment is up by $27 billion. 

That's land, buildings, state highways, electricity generation and railways. 

Land can be sold, so it's an asset, power stations make profits, so they're assets. 

But roads, hospitals, railways all cost more than they bring in, so aren't they liabilities too? 

Look, I know I'm being pedantic here. 

Anyway, things could be a lot worse. 

We could be Greece, or Italy, or another European debt basket case. 

Carry on borrowing at the rate we are though, and that won't take long.