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Heather du Plessis Allan: Roger Douglas is right - we have too much debt

Publish Date
Fri, 14 Jun 2024, 4:42pm
Former Finance Minister Sir Roger Douglas. Photo / File
Former Finance Minister Sir Roger Douglas. Photo / File

Heather du Plessis Allan: Roger Douglas is right - we have too much debt

Publish Date
Fri, 14 Jun 2024, 4:42pm

Today is 40 years to the day since Rob Muldoon called the snap election.  

Which then, of course, led to his defeat. Which then, of course, led to the incoming Labour Government, realised we were nearly broke as a country. Which then led to them embarking on the most amazing set of reforms which they do not get enough credit for to this day - and get way too much grief for.  

It is a really interesting anniversary for us to mark right now - as we find ourselves in a recession that feels like the worst that many of us have ever experienced. As we watch old names in New Zealand, like Smith and Caughey give up. As we see projections that the country's debt will just keep growing. 

Because today, Roger Douglas - one of the primary architects of those reforms back in 1984 - has given an interview saying we are as in as much trouble today, as we were back in 1984. By the way, if you ask why is Roger Douglas piping up again? He's not stopped, ay. You cannot stop the man. He's still pouring over all the government financials, still publishing his ideas, still calling journalists to tell us what he thinks is going wrong with the country. And in this particular interview, he points to a Treasury paper containing long-term fiscal projections, and he says if we carry on spending the way that we are, if you look at this paper, we're going to go broke.  

In particular, what he's worried about - is the projections for the cost explosion that's coming in healthcare, the pension, education and the cost of paying for the debt that we're racking up. He points to health specifically. He says it's currently 7% of GDP. In 35 years - many of us will still be alive by that time - it will be 11% Now that is just health. Never mind the pension. Never mind education. Never mind the cost of the debt. And he is worried that the debt is gonna blow out in this country. And he's right to be worried about it. Because if you just look at the budget documents that were published last month, that debt shows no sign of going anywhere other than up, it just gets bigger and bigger and bigger every single year. Now you tell me that he's wrong.  

And I'm not being miserable about it. I just wanna be realistic about it. You tell me that you disagree with him, that we are in the same position that we were in 1984. Our country is in a structural deficit at the moment. It means that we spend more every single year than we earn as a country. Our infrastructure is getting old. Everything is going backwards from crime, to the education system. We are tied up in red tape and dumb rules in this country. So he's right, isn't he? So here’s hoping the country and the government have the intelligence and the courage to do some radical things to fix this - just like the government that came in 40 years ago. 


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