Any minister of finance would find this month’s Budget a challenge.

The problem is chronic deficit spending. It exists because extraordinary expenditure increases in part due to Covid-19 have not been reversed. The government’s operating spending is now running at around $150 billion a year, which is around $75,000 a household.

Far too much of it is ill-justified. For years, the Controller and Auditor‑General have warned that value‑for‑money checks are weak in too much of government spending.

At the same time as not doing enough to bring greater discipline to spending, governments have failed to raise taxes by enough to fund that spending. To do that would be to expose the degree to which household incomes are artificially high because of this deficit spending.

To read the article on the NZ Herald website, click here.