Monday, December 02, 2019

Loosening the purse strings

When Labour was running for election in 2017, it felt it needed to demonstrate "fiscal responsibility" and signed itself up to masochistic "budget responsibility rules". It was a fool's errand: the sorts of voters who demand fiscal responsibility are also the sorts of voters who believe that labour can never provide it and will never vote for them, while the rules prevented any real improvement in social spending. But now, finally, it looks like the government will loosen the purse strings:

The government plans to loosen the purse strings and spend up large on infrastructure - but the details are still some weeks away.

Finance Minister Grant Robertson flagged extra spending in his speech to the Labour Party's annual conference in Whanganui.

He said Cabinet had committed to a boost to infrastructure as part of the short to medium term spending plan.

"We are currently finalising the specific projects that the package will fund but I can tell you this - it will be significant."

And the first step - $400 million for school property upgrades - looks good. This is what Labour governments are meant to do: invest in New Zealand (as opposed to National, who run it down then flog it off to their cronies). And hopefully this will also signal a greater willingness to invest in social infrastructure as well, rather than just concrete and steel. Because it makes no sense to run huge "surpluses" while there are unmet needs - that's not "responsible", its simply stupid.