Machinations with money

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    This is Money Week 2017 and the indefatigable maw that is my daily email from official government sources tells me the Reserve Bank and the Commission for Financial Capability have collaborated in a series of videos to encourage people to better manage their debt and talk more freely about their finances.

    The videos focus on the theme of ‘debt’ but mostly seem to feature garbled commentary on our banknotes and their connections with “other pioneering New Zealanders, and the Queen, who appear on our Brighter Money banknotes”.

    Money Week’s bid to further financial literacy begs some awkward questions.  The first alert I had was Shamubeel Eaqub’s masterful denunciation in the Sunday Star Times of our learnings ten years on from the Global Financial Crisis. Not a lot, it seems, with the bailout funds having gone disproportionately into financial assets (bidding up their prices) rather than consumption. As a result, we’re now back to pretty much where we started: Too much debt and over-priced houses and other assets. 

    Exhorting, cash strapped citizens ‘to better manage their debt’ is like chivvying Titanic passengers into a bucket chain.

    On the more or less terrifying international debt clock, the national debt of New Zealand was, of Monday evening, $85,605,137,440.  Just while I typed the figures, it had gone to $85,605,144,670. That’s in five minutes. Ten minutes and you’ve scared yourself silly. 

    In 2007, the Government overseas debt was around $15 billion. By 2012 it was $60 billion, having climbed $27 million a day since John Key had become Prime Minister. 

    By 2016, said the headlines of the time, New Zealand was sitting on a half-a-trillion-dollar debt bomb. Government debt was $95.8 billion, household debt $232.9 billion, which would be those disproportionate financial assets previously known as family homes.

    Nor was much public financial literacy in evidence during the week’s election rhetoric. National Party pundit Michelle Boag – with a fine disregard for decimal points – touted the $2.80 apple while backstopping Bill Engish on the ‘water is free’ mantra.

    As if de-democratising Canterbury in the interests of dairy intensification and expecting us to stump up for cleanup of our now sordid rivers somehow required some ideological purity.

    A household seldom flourishes when a family is up to the eyeballs in debt to the bank, meaningful jobs in town are disappearing overseas and dad might lose his competitive edge at work any time soon.

    Where the bright kids in the family don’t get to university because it would be eye-wateringly expensive, there is no ‘family’ home and the nation’s housekeepers are expected to believe a consumer price index figure that relies on the data line that counts in ‘domestic air travel’ while the price of everything a family actually needs to live healthily has soared.

    Teenagers and young adults are expected to develop a fine disregard for the hypocrisies of their elders. It’s part of their path to individualisation, independent thought and integration of moral judgements – a brain path that isn’t complete until the age of about 23.

    Student unrest is a healthy part of the process, though much muted in the climate of our commodified user-pays tertiary education culture.A youth wave would be a relief.

    What 16-year-old cannot spot the dishonesty between the baying for blood that’s got a one-sentence poll question on the Greens’ Metiria Turei resignation more media column inches than the election of 37-year-old Jacinda Ardern to lead Labour a fortnight before?
    Not to mention a more-or-less successful Government shut-down on the lavish parliamentary salary and perks still going to the missing-in-action Todd Barclay.

    Of course, if you’re stopped in the street and asked if Turei should have had flatmates while on the DPB, most of us would answer no – and wait for the next question.

    Would it have been better if Turei had spun the story differently, as one of the many commentators in the weekend papers suggested? Maybe.

    However, she’s hardly alone as a high profile parliamentarian in having accepted welfare assistance to bring up her child.

    Parliament has some notable stories on that one, and as a lawyer and long-time contributor to society, Turei could also be considered a striking success story for a system which has been unfair, scapegoated and inimicable to well-found families and good parenting structures – reconstituted or not – for generations.

    As it was, our only structural response to the 1970s and 80s segue into wage stagnation, financial hardship and latch-key kids was the DPB and there was precious little in that to create the development of subsequent healthy and supportive relationships for fractured families.

    Is this a thriving economy? Or even remotely strong and stable? I’m hoping our youth don’t think so and will get appropriately outspoken about their requirements from an incoming government. Liz Waters

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