Ahead of the Budget we got the same message we got from a barefoot, jandal wearing Chippy on day one of his post summer break.

More debt. Borrow more and spend more.   

Name an issue, pick a portfolio, any portfolio, where Labour has not criticised the government for cuts and promised to restore spending to pre-Willis levels. 

The latest example is pay parity, but that is just the latest in a long and growing list of items on the wishlist. 

In case they didn’t get the memo, Kiwis voted for cuts at the last election. If we’re doing our bit, the government ought to do its bit. That’s the politics of it.

The economics have been up for debate.

Net core crown debt has more than doubled on pre-Covid to $182 billion or 42.6% of GDP.

Like our tourist arrivals, debt has unfortunately not returned to normal pre-Covid levels. 

Some of this is inflation but much of it is not. There’s spending that went too far and got baked in.

A couple of things to note.

Yes, government debt is low compared to other OECD countries.

But, the credit ratings agencies are telling us we must get back to surplus and start paying it down. If you risk a credit downgrade, then borrowing costs you more.

We’re already spending more financing debt than we do on defence, Police, Corrections, Justice, and Customs combined. 

And remember, we’re the shakey isles with huge exposure to trade. We need headroom to borrow big if shit hits the fan. 

Ask any economist or the person who runs your household and they’ll tell you borrowing for everyday spending is a bad idea. We’ve been doing that year, after year, after year, and Willis is actually still doing more of it. 

If that’s enough to convince you on debt, here’s the kicker. The real doozy. 

Private debt.

We have student loans and business debt and houses. We love houses. Loads of mortgages, and the problem is how much we owe and who we owe it to. 

Household debt is 120% of GDP and higher than America, Spain, Germany, Ireland a bunch of other countries.

What’s worse, much of it is owed to foreign banks. We don’t have enough savings to lend to ourselves. 

This makes us more vulnerable as a country, keeps Reserve Bankers awake at night, explains why Nicola Willis’s nickers are always in a twist when it comes to getting the government’s debt levels down. 

Willis could, and many argue, should go harder and faster as she’s still spending more than Grant Robertson. 

But one thing you can be sure of, because it has come from Hipkins mouth repeatedly this week, is that spending and therefore borrowing would be higher right now had they be given a third term.

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