Fiscal Irresponsibility

Both the (currently) major political parties consider themselves bound by the (apparently) bi-partisan principles of “fiscal responsibility”. In principle if not always in practice, or rather in words if not deeds.

The interpretations they place on this concept from time to time vary more in line with expedience than consistency or precision. But it has become a useful pretext for limiting Government spending unless such spending relates to a political preference or supportive constituency of the party in power.

When this is combined, as it has been, with antipathy or timidity towards taxing wealth or (in any serious fashion) capital gains, it inevitably limits our ability to properly address public infrastructure, poverty or environmental degradation. Only the Greens have adopted a consistent stance on the urgency of both aspects of acting and funding these issues and to do so they have shifted away from a prior ill-advised adherence to the “fiscal responsibility principles”.

This is, in practice, the only genuinely responsible position.

In what sort of world is it “responsible” to fail to end growing inequality and persistent poverty?

To fail to avert or mitigate climate, pollution, species diversity across whenua, awa, and moana?

To not fund adequately public transport and health infrastructure as it crumbles and fails to meet needs?

Well, the answer is in the world occupied by adherents to the artificial political doctrine of “fiscal responsibility”.

There is no economic law which dictates this. Nor even a broad consensus of economists that it is required or if it is at what levels of spending or deficits it might apply.

The genuinely responsible thing for a Government to be doing is spending what is needed to meet the most demanding social issues the community faces and funding this by taxation based on ability (not willingness or enthusiasm) to pay and borrowing as necessary. There are, obviously, limits to this but there is no evidence that we are breaking or close to breaking any such limits.

The (currently) main political parties are not doing what is prudent or responsible but are in thrall to a an artificial set of rules which are not in most people’s interests. Their idea of responsibility is simply irresponsible.