There is a very good blog from Bernard Hickey pointing out correctly, that the plunge in the Government's financial situation is only partly due to falls in equity markets (in fact part of the decline in Government investment value is an own goal relating to Auckland airport - around $34 million in lower stock value we are told - but lets let that slip by.)
The big concern in these times of high inflation and high interest rates is the blow out in Government expenditure.
But the really interesting stuff is on the other side, where spending is up 9.7% on the previous year at $32.126 billion. The biggest movers are health, up 9.8%, and core government services (bureaucrats in Wellington), which were up 33.8% at $1.7 billion.
Government spending is growing at a rate of 9.8%, which was more than twice as fast as revenue growth at 4.5% and twice as fast as estimated nominal GDP growth at around 5%. The government is eating the economy.
Watch the OBEGAL. It is barking that the government is spending too much and taxing too much and employing too many bureaucrats. It is biting us with low productivity growth because our best and brightest are becoming highly paid bureaucrats who now call themselves senior policy analysts. We’re all paying for this with higher wages costs, higher inflation and lower GDP growth.
Ignore this month’s deficit. Pay attention to a government eating the economy.
Why does Bernard Hickey seem to be a lone voice on this in the mainstream media? And why is National not kicking up a stink?
