Playing Santa Claus

A guest post.

I once played the role of Father Christmas at a large playcentre. It was great fun with a never-ending run of kids? hilarious claims and reactions. It was also very satisfying to be giving out gifts to some very low income families. It didn?t seem to matter at the time that it wasn?t me who paid for the presents ? I was able to grab the kudos and good feelings from handing out the goodies.

The money for the gifts had come from a small group of hard-working, enterprising mums?? some didn?t even have kids at the playcentre. Through their initiative everyone gained.

I recalled this event yesterday listening to the finance minister dishing out goodies left, right and centre. The kids around him loved it. They enjoyed the kudos and good feelings from the role.

They didn?t stop to think about the hard-working, enterprising people who earned the money creating the goodies that the minister was able to give away. It was possible to even believe that he was thinking he had actually created all the goodies, all by himself, such was the glow of satisfaction and smugness.? ?

If anyone was responsible for the nation?s books being such that minister Robertson could play Santa Claus it was Bill English ? the forgotten grey man who kept a tight control of the Santa sack.

But it wasn?t really Bill English?s money saved up ? it was OUR MONEY. The state demanded and legally took the first third of everything you and I earned. You and I worked all day Monday, all day Tuesday and into Wednesday for the state.

All that crowing about how smart they are, all that idiotic and flowery nonsense about transformational budgets and making the world a better place, was done off the back of hard working New Zealanders. They simply took the money they had ‘inherited’ from National?s cautious budgeting and sprayed it around on all their pet projects. Some ministers with more clout got a bigger chunk ? Winston did well ? while others, the light weights, couldn?t negotiate anything more than a top up ? think, Hipkins.

Milton Friedman once said, ?There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you?re doing, and you try to get the most for your money. Then, you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I?m not so careful about the content of the present, but I?m very careful about the cost. Then, I can spend somebody else?s money on myself. And if I spend somebody else?s money on myself, then I?m sure going to have a good lunch! Finally, I can spend somebody else?s money on somebody else. And if I spend somebody else?s money on somebody else, I?m not concerned about how much it is, and I?m not concerned about what I get. And that?s government. And that?s close to 40% of our national income.?

The reality is that governments give people what they think they ought to want, shaped to get votes and appease their party?s paymasters. It?s that simple. Left to their own devices people will buy what they actually want. For most Kiwis the state and its regulatory intrusions mean there is no surplus left to pay for any ‘wants’ ? most of us exist on bare needs.

Governments need to do some stuff for our collective good ? defence, policing, border control etc. That expenditure is about 6% of GDP and has not changed over the last hundred years or so.

From the 1960s income and GST receipts have ballooned as we started paying ever-demanding benefits ? domestic purposes, superannuation etc. There was a huge swing toward paying for non-work and consumption. And, like a treadmill, it just keeps going and expanding.

This means the main preoccupation of governments today is taking money off people, deducting a processing cost (treasury estimates governments need $1.20 to spend $1.00) and then giving it back to us. In most years the desire to be the best Santa Claus has led to governments giving back more than they took leading to excessive borrowing.

Our collective expectations now seem to be, ?We did the hard yards under National?s austerity so now its payback time. Spend up big on social services.?

Who put their hand up and said, ?Give it back to those who produced it?”

Simon Bridges, who surprised a few people by the exuberance of his speech, spent too much of his time saying the Nats would rearrange the same chairs on the state ship slightly differently rather than demanding the chairs be given back. National had a real opportunity to differentiate themselves by their promised tax cuts but, sadly, they now figure that too many voters are net takers of state largesse and they want to be a better Santa Claus than Labour.

It seems these days it?s a matter of ?My bag is bigger than yours.?

Ardern, Peters and Robertson think we can spend our way to happiness and growing wealthier. How sad. The missing element that would achieve sustainable wealth and improved well being did not get a mention?? labour productivity. No political party wants to address that, however. It would mean taking tough decisions.

Santas do not like tough decisions ? the kids wouldn?t like them any more.