Here’s my curation of the day’s top news, analysis, commentary, charts and cartoons from around Aotearoa and elsewhere about our political economy on housing, climate and poverty. This is only published in full for paying subscribers.
Firstly and briefly, here’s my summary and analysis of this morning’s top news:
Labour has unveiled its approach for Election 2026 to the bipartisan 30-30 rule on public debt and the size of Government that has strangled New Zealand’s investment in capital and people for at least two decades. Opting for a ‘low-target’ approach that preserves the longer-term fiscal policy status quo, Labour announced1 yesterday it had chosen to keep broadly the same approach it has had since 2017 and only slightly different to National’s approach.
Labour pledged to achieve budget surplus by 2029/30, which is exactly the same timeframe included in the current Government’s Budget forecasts, albeit focused on a more traditional measure of the Budget balance.
Labour said it would reduce a more traditional measure of net public debt, which includes the NZ Superannuation Fund but not other assets, over an unspecified time to 20% of GDP from a currently-projected peak of around 25% by 20282.
It also pledged to keep the size of Government spending and taxation around its current level of 33% of GDP, which is up from its previous view that it should lowered back towards 30% of GDP, given the ageing population.
In my view, all of those self-imposed constraints don’t allow room to repair decades of underinvestment in maintenance and expansion in infrastructure and business capital, and keep in place the chokehold of fiscal policy on any attempts to generate productivity growth or solve our inter-locking housing affordability, climate or poverty crises.
Keeping broadly the same fiscal policy also keeps the economy starved of investment to grow the economy, given households and businesses are too indebted and lack confidence respectively to grow the economy in the absence of a larger Government sector, in my view.
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