The Government has sensibly announced there will be even tighter spending restraint in this year’s budget, due to the impact of the earthquake. It’s not going to be slash and burn, just very tight fiscal discipline.
This should be no surprise. But what is interesting is that Labour still are 1000% opposed to any spending restraint. You have to wonder what could cause them to actually adopt fiscal restraint.
The 2008 recession wasn’t enough.
The global credit crisis wasn’t enough
The first earthquake wasn’t enough
The double dip recession wasn’t enough
The second earthquake wasn’t enough
I have this vision of a meteor hitting New Zealand and wiping out 90% of NZ, and still Labour’s response will be you can’t cut spending.
Even worse is Labour’s preferred coalition partner – Winston. He’s just come out promising it will cost no more than $10 to visit the doctor for oldies. National has ruled Winston out, but Labour would be forced to agree to his demands as the price of forming a Government. So you can add hundreds of millions of extra spending to the deficit.