I am more concerned about our economy today than at any time in my 30-plus years as an elected representative for Nelson.
I am reminded of Charles Dickens, who in 1850 wrote that if annual income exceeds expenditure “result happiness” but if annual expenditure exceeds income “result misery”.
Our Council, Government and NZ are all running deficits with spending exceeding income.
Last year, NZ had the worst Balance of Payments deficit ever recorded of $33.8 billion ($17,500/household). This is the balance of how much we export and import as well as what we earn and spend on services such as tourism. We are living off other countries’ savings and piling up debt.
Stats NZ last week published figures showing New Zealanders’ total net worth declined over the past 18 months by 10% or $230 billion ($120,000/household), due to the decline in asset values and increased borrowing from overseas.
The Government’s finances also took a turn for the worse last week with debt $5 billion worse than the May Budget. Net Debt has gone from $16 billion ($8000 per household) in 2017 to $73 billion ($37,500/household).
The Government ran a deficit of $7 billion last year and is budgeting another $8 billion this year. The problem is the 68% increase in Government spending from $76 billion ($39,000/household) in 2017 to $128 billion ($66,000/household).
Nelson City Council has also been running deficits. Last decade, spending and rates grew by more than double the inflation rate. I have worked hard with the new Council to keep the rate increase to no more than the inflation rate of 7.2% this year. We also reduced the Council deficit from $3.1 million last year to $0.9 million this year.
We must get these deficits under control. Increased spending is not the answer to every problem.
My goal next year is to balance the Council’s books. We must rebuild Nelson’s tourism and international education industries. We need a renewed focus on growing Nelson’s export industries such as horticulture, forestry and seafood, and developing new export earners. We need to earn more and be more disciplined in our spending or we will put our future at risk.
