Episode Details

Well Ladies and Gentlemen. We’re broke. 

The Half Yearly Government Fiscal update shows we’re still in debt and the debt is getting bigger 

So, we’re broke.  Not enough money, everything's more expensive so it’s off to the money lender before the bailiffs come in and sell everything. Sounds like a lot of households around me. 

Ideally, we’d be in a surplus. That’s when we have more money than costs, but we aren’t and the possibility of that happening has got further away. 

Make no mistake. Deficit is bad.  But surplus is only OK. That’s how bad we are. And we’re getting more and more in debt 

The Government has a debt to GDP ratio of 41.8 per cent and it’s forecast to rise to over 46 per cent before it starts going down. 

But lets’ put another lens on this. 

The New Zealand Government has posted a surplus 17 times since 1980. That's 17 times in 45 years.  so the government has been broke 62 per cent of the time since then 

Being broke is our normal 

And if applied the surplus/deficit/debt ratio to my own finances then I’ve been broke most of my adult life. I mean, who hasn’t had a debt-to-equity ratio of 95 per cent in their lives 

So if you look at it that way it’s not so bad.  And we’re still in the right half of the indebted nations list.  Everyone’s broke.

We’re a bit naive when we demand surpluses about just how hard it is to do.  

Listen to Stephen Joyce on Heather’s show yesterday. Government books are hard to turn like a super tanker.  As he said yesterday it can take a decade. 

But some of us think a few public service cuts and cuts to benefits and we’d be tickety boo.  

 But our fiscal crisis is far more fundamental than that.

What we really need to do is make more money in the world, so we have more tax revenue, so we have more good stuff and less debt. 

So, what are you standing there listening to this for.  Get to work.

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