close button

Why won't Labour spend the Government's $5 billion surplus?

Spend the surplus, you cowards!

Why won't Labour spend the Government's $5 billion surplus?

Jun 18, 2019 Politics

OPINION: The Government needs to grow a spine and spend its unexpectedly high surplus on funding public services – “fiscal responsibility” be damned, writes Justine Sachs.

It turns out more money for teachers was there all along, despite what Labour would have had us believe. In response to May 29’s largest ever teachers’ strike, the Government serendipitously found an extra $271 million dollars to offer teachers, after weeks of warning the cupboards were bare and they should prepare to be disappointed.

This is good news, but let’s not make the mistake of thanking the antagonists in this story. Yes, Education Minister Chris Hipkins has suddenly produced an offer that appears to address concerns around pay parity, workload and wider issues within the education sector but this is not an act of benevolence or goodwill on the Government’s part. Teachers forced their hand, because striking works. It’s about the only thing that does – you can thank the unions for your eight hour work day too. This is the striking teachers’ victory, and we should thank them for it because it is our children who will benefit most.

What the Labour-led Government’s about-turn on teachers’ pay reminds us is they absolutely can afford to fairly pay teachers and nurses, as well as fund our public services. Capitulation to notions of fiscal responsibility ring pretty hollow when you consider the Government has an even-larger-than-anticipated surplus – $5 billion larger, in fact. Considering how under-resourced and under-serviced our public sector is, this surplus is infuriating. The government has the resources to fix these issues and more, yet instead they want to hoard it, like the greedy dragon Smaug (cheers for refusing to repeal the Hobbit law like you promised, btw).

"Turns out the money was there all along, lol". Photo: Getty
"Turns out the money was there all along, lol". Photo: Getty

What is fiscal responsibility? Holding the purse straps tight while teachers and nurses burn out, wages stagnate and public services struggle doesn’t seem responsible at all. In fact, I’d go so far as to say it’s reckless; a decision which will only worsen New Zealand’s shocking levels of wealth inequality. They don’t put that on our tourist brochures. I can hear the Mike Hoskings of the world grumbling while reading this. “Now hold on Justine, the economy is booming – we’re all better off even if the rich are richer. Happy days.” Wrong, bitch! The rich have gotten richer at the expense of the rest of us.

Somebody’s surplus is always someone else’s deficit. Government spending has systematically decreased since the 1980s. This was done, in part, to reduce the tax burden on the wealthy, or as I refer to them, the humans of Remuera. As government spending has decreased, household debt has increased. New Zealand has some of the world’s highest household debt levels, at 93 per cent of GDP. In other words, most New Zealand households don’t balance the books: they have mortgages, personal loans and credit card debt.

It doesn’t have to be this way. Costs saved by the state through so-called fiscal responsibility haven’t magically disappeared, they just got passed on to the majority of ordinary Kiwis. I’m furious with the Government and their $5b surplus. The surplus is not a sign of prudent fiscal management. It’s hoarding resources instead of investing them in our communities. It’s money which would go a long way toward fixing the devastation that underfunding has caused in our healthcare, housing and education sectors. All this talk about delivering a ‘Wellbeing Budget’ looking beyond economic growth as a metric for human flourishing is a fantastic public relations ploy – but that’s all it is.

If the Labour-led Government is not prepared to significantly invest in our communities and our ailing public services, then perhaps forcing their hand is the only way forward. The nurses got a better deal because they went on strike and now the teachers have as well. Strikes prove the most powerful leverage workers have is the withdrawal of their collective labour. The fight for higher wages and better working conditions by teachers and nurses is part of the same struggle for the future of our public services. Do you like bragging to poor American tourists about how great and (mostly) free our healthcare system is? Then you have a stake in this.

The Government should be ashamed of their surplus: it’s our deficit. Spend the surplus, you cowards, and if that isn’t enough: tax the rich.

Justine Sachs is a community organiser and Masters student in Sociology based in Tamaki Makaurau. She is the external communications organiser for the socialist group Organise Aotearoa. 

You can read more of her work for Metro here.


Latest issue shadow

Metro N°442 is Out Now.

In the Autumn 2024 issue of Metro we celebrate the best of Tāmaki Makaurau — 100 great things about life in Auckland, including our favourite florist, furniture store, cocktail, basketball court, tree, make-out spot, influencer, and psychic. The issue also includes the Metro Wine Awards, the battle over music technology company Serato, the end of The Pantograph Punch, the Billy Apple archives, a visit to Armenia, viral indie musician Lontalius, the state of fine dining, and the time we bombed West Auckland to kill a moth. Plus restaurants, movies, politics, astrology, and more.

Buy the latest issue