Speaking to Audrey Young in today’s Herald, Prime Minister John Key stated “the one thing I’ve come to learn is that the single biggest driving factor in Kiwisaver is inertia”. This confirms what many in the community have been thinking, and a few in the business world have been saying, that inertia is also the single biggest driving factor in the National/ACT/Maori Party government’s economic policy.
Not that Key’s government have been altogether idle. They have been borrowing furiously in a world awash with cash looking for a return. In contrast to the last several years where households over-borrowed from banks loaded with cheap overseas loans, now that households are pulling back the government is taking up the slack and borrowing extensively.
The borrowing is necessary to pay for liberal tax cuts, weighted heavily to the top 1% of income earners. Now that households are cutting back on their spending, the government intends to help them to cut back even further by removing benefits and the incentives for saving through Kiwisaver as part of its inertia policy. Government workers will also be asked to contribute to ensuring the government’s books don’t suffer as households did by giving up their jobs.
There’s a lot to be said for doing nothing.