Who said there was no such thing as a free lunch?

Dr Bryce Wilkinson
Insights Newsletter
18 November, 2022

We at the New Zealand Initiative are aware of an ill-founded view that we are somewhat critical of our much-beloved government.

Of course, this “alternative view” has no merit.

Take, for example, Labour’s 3 November list of its 100 achievements since November 2021.

On one count 71 of the 100 involved government spending more of our money on this or that.

Top of the list was putting a targeted cost of living payment on its credit card. Good thinking. 

After all, inflation is up because Government drew so heavily on the RBNZ’s ATM in responding to COVID. The remedy for too much government spending yesterday is obvious - more spending today.

The magical thing about the 71 spending items on this list is that they are all good. No one is harmed. Every item is beneficial. Why, otherwise, would it make the list?

Why is it magic? Well anytime you or I spend our money we give up something – the chance to spend it on something else. We have to think about that.

Government is different. It can and does create more money out of nothing. Today’s government borrowing, like tomorrow’s inflation, is the next government’s problem. What did future generations ever do for us?

There is more. Another 21 items in the list use regulations to spend other people’s money.

Item 2 on the list is making Matariki a public holiday. Who could object to that? Certainly not public servants. One less workday for unchanged pay.

Those malcontents who want to know who is paying for the lost public service productivity should be asking themselves why they think it is lost.

Increases in the minimum wage also illustrate the regulatory genre. Those who cannot get work at the higher minimum wage are as magically invisible as are its other costs.

If prices go up as a result, the obvious remedy is – you guessed it – a further magically-painless increase in the minimum wage. We have been doing this since 1894. It must be good.

The list includes many things that a different government would also have achieved, for example, finishing Transmission Gully and free trade agreements.

Given this feature, we should acknowledge Labour’s modesty in excluding sunshine and fresh air from its list of achievements. They are free lunches too.

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