Budget 2015 documents were accompanied by a banner heading A plan that's working. An undoubtedly naive economist, originally ignorant as to the presence of the plan, describes his journey in uncovering the nature of the plan.
Did you know we had a plan? And, did you know that it’s working?
Well, entering the Budget lock-up last week I was confronted on the screen greeting us with the banner: A plan that’s working.
Perhaps illustrating my somewhat naive experiences in these matters, I thought that finally I was going to be witness to some epoch-making catharsis of announcements. Our leaders were about to present their responses to what must have obviously been some recently experienced epiphany. Yes, I felt a tingling sense of excitement coursing through my veins. At last, we had a plan. And, what’s more, it’s working.
Reaching my seat in the lock-up in the analysts section (as far away as possible from those pesky media types, but closest to the coffee), I whispered to my colleague “I must confess I didn’t know we had a plan”. She nodded, I think in agreement. Early excitement was thus combined with relief through reassurance I was not alone in my ignorance of the presence of a plan.
I whispered again, “Do you think they’ll share the plan with us today?”
“Hope so,” came the answer.
Excitement heightened as I finally got to plug in the datastick and open up the Budget documents – speech, factsheets, media releases, estimates, and forecasts. There they were on my little screen in all their glory emblazoned with the banner A plan that’s working - Budget 2015.
I got to work, spending the next 90 minutes trawling through the documents searching for a plan. Excitement was quickly replaced by deflation. Unfortunately, all the documents were presented on the assumption that the plan was known. The Budget was clearly not going to be wasted on explaining the plan at all (or its implementation). Rather, it was an exercise in reassuring all and sundry that the plan is working.
And, of course it is.
What with the foundation economic forecasts resting on an assumed 60% rebound in export dairy prices over the next 18 months, and a smooth soft landing for house price inflation down to 3.0% for the 2017 March year; why would one have any doubts as to whether the plan is working or not?
And with national debt at a mere 65% of GDP progressively rising just a smidgeon to 75% by 2019, the reduction in net government debt (including NZS fund) to under 10% of GDP is the icing on the cake. Yes, the nation’s external deficit progressively worsens to over 5% of GDP over the period to 2019. But, hey, government surpluses this year and beyond are the epitome of prudent fiscal management.
So, I looked forward to the Minister's address to the lock-up. Satisfied the plan was working, I whispered to my colleague, “perhaps he’ll tell us the plan”. She, again, nodded wisely.
To my naive dismay, 40 minutes later I was none the wiser.
Then, question time. At last, surely one of those pesky, but clever, media types would ask what the plan was? After all, the criticism of the previous irresponsible lot in power was all about the lack of a strategy, vision or plan. Remember, that irresponsible lot that racked up (government) surplus after (government) surplus. Further, they were so irresponsible that they paid off (government) debt to such an extent that there was a mess of debt amounting to -1.4% of GDP that had to be cleaned up by the new incoming administration in late 2008.
Sorry, confusing I know, but just to clarify; the negative sign in the previous sentence meant there was a net asset position. Just how irresponsible could they have been leaving that to be cleaned up? And, what’s more, with no plan in place.
And that lot also oversaw growing external deficits and external debt. But, hey, we’ve rectified that now haven’t we? And now we’ve got a plan to boot!
Unfortunately, no one ventured to ask what the plan was. Clearly, all already knew about the plan. I controlled my urge to ask the question, luckily, as that would have only revealed my ignorance and naivety for all to mock.
So, I and my colleague left the lock-up. We remained in the dark about the plan, but were resting easy in the knowledge that it’s working.
The next few days I spent scouring prior papers and announcements that might enlighten me as to the plan. A few years ago much was made of an export target of 40% of GDP, but that (I’m told) was a target and not a plan. Besides, that doesn’t appear in pronouncements anymore. And, as we’re going backwards on that measure it can’t possibly feature in the plan given the claim that the plan is working.
Despite some despair over the next few days, my story does have a happy ending. I can report success – I found the plan.
The plan was clearly there for all to see in the Budget speech. And I quote:
“Looking beyond our present circumstances, our future depends on our ability to export.”
Yes, there it is – on page 7, Budget Speech, delivered by the Minister of Finance, to the New Zealand House of Representatives, 01 June, 1978.
Great plan, love it. Pesky question ... “how’s the implementation phase going?”