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Mike Hosking: Helicopter money in the Budget would be fiscal suicide

Author
Mike Hosking,
Publish Date
Wed, 13 May 2020, 4:15PM
Prime Minister Jacinda Ardern and Finance Minister Grant Robertson. (Photo / NZ Herald)

Mike Hosking: Helicopter money in the Budget would be fiscal suicide

Author
Mike Hosking,
Publish Date
Wed, 13 May 2020, 4:15PM

God help us all.

The concept of free money, the power of a hand out, is clearly not to be under estimated. Research out yesterday shows two thirds of us want some helicopter cash from the budget.

This is the sort of insanity there currently debating in America. The Democrats are looking at thousands per month for everyone until the pandemic is over, whenever that is, and how ever they decide to declare it over.

So an open, bottomless cheque, and that is why America doesn’t run a surplus and is mired in debt.

Back here, perhaps alarmingly, when I’ve raised it with the finance minister he hasn’t ruled it out. He should have, but sadly he’s got form.

The winter heating payment which was boosted recently is not means tested, it’s open to everyone from paupers to millionaires.

Why? If the recipient doesn’t need it, can do without it why would you hand out money you don’t have to help someone who doesn’t need it.

What makes the research slightly murky is the general sense that a cash payment would stimulate the economy, which of course it would, and I think we all agree it needs it. But the “how” is the critical part.

It is, i suppose, a reality check and a lesson as to why so many of us carry so much debt. It’s easy, it’s clearly not seen by many as a thing to rid yourself of, to divest yourself of. It’s just a mechanism to pay for a holiday, buy a car, extend the deck.

Perhaps the fact that whatever Robertson hands out tomorrow isn’t his or ours doesn’t worry many of us, and yet it should.

Someone else will pay for it another day - is that what drives this?

The cost, by the way, of this largesse is between a couple of billion and 6 billion depending obviously on what the hand out is.

Now the key problem is, does it get spent and if so where? What if it’s spent where it isn’t really needed, hence the beauty of the wage subsidy. It kept people in work

Does a handout get spent on an air ticket or a holiday? Does it get spent locally or online to some offshore operator who pays no tax here or employs no one?

And what of those that get it, that doesn’t need it, and despite all the worry right now, it must be remembered most of us still have work still get paid and always will - are you really handing out money to them?

Clearly the average punter cannot be trusted with the nation’s wallet. 66per cent who want free money that isn’t even ours to start with is a reason to have us all go back to school and a session or two of economics.

So the greatest test Robertson has is discipline. Yes, we need help, and a lot of it, but a free for all is economic irresponsibility not to mention fiscal suicide.  

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