Few people would be surprised to learn that the budget surplus we were promised again and again now looks to be only a distant hope.
John Key will blame the European crisis for the failure to reach yet another target. This target will probably be quietly dropped from National’s narrative over the next few months. Just like the target of closing the income gap with Australia by 2020. We don’t hear much about that nowadays.
The right may talk up the virtues of self-responsibility, but when it comes to the failure of the Key government to achieve even modest targets, there’s always someone else to blame. It’s all Labour’s fault, or it’s all because of the earthquakes, or it’s all because of Europe.
The surplus target never made much sense from an economic perspective. New Zealand’s public debt levels are modest compared to those in other countries, but we are drowning in private debt. Nothing this government has done will address that problem. Cutting government spending to the bone just sucks money out of the economy, which leads to job losses, which leads to more people unable to save and struggling to pay their debts.
However, Key insisted last year that we should give him a second term in office because his government was going to return us to surplus earlier than Labour. He made this promise knowing full well the likely cost of the Christchurch earthquakes, and with the knowledge that the situation in Europe was toxic and was likely to deteriorate further. Those excuses won’t work this time.
When the surplus target is missed we must hold John Key’s government responsible, and not allow him to find some new excuse for his government’s paucity of imagination and lack of vision.