The Spinoff: Doing more with what we already have: a challenge to the abundance agenda

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A surprise bestseller last year, Ezra Klein and Derek Thompson’s book Abundance won converts the world over with its vision of a better life attained through building more stuff. The key to tackling climate change, the cost of living and other crises, Klein and Thompson argued, was to sweep away bureaucratic obstacles, embrace a growth mindset, and construct copious amounts of houses and windfarms.

Closer to home, The Spinoff recently anointed housing minister Chris Bishop the king of “abundance” politicians for his pro-growth reforms. A study published on Monday, however, suggests we should also be pursuing a far less sexy approach: doing more with what we already have.

The study, commissioned by the Energy Efficiency and Conservation Authority, shows that simply by changing the times at which we use electricity, we could avoid $3 billion in spending that would otherwise be needed for new energy generation and network infrastructure. Such infrastructure is often designed to provide extra capacity at peak times. But if we adopted practical, ready-to-implement measures to shift demand away from the peak – battery storage, for instance, or mechanisms that change the times at which dishwashers run – we could avoid those costs.

This proposal would have immediate environmental benefits because the energy supplied during peak periods is often the dirtiest, and because it accounts for renewable energy’s intermittency. But it also poses a wider challenge to the abundance agenda.

The book Abundance has proved popular for several reasons: it has a very simple formula, it encapsulates younger generations’ frustrations with the current system, and – crucially – it promises us that a better world can be achieved with essentially no personal sacrifice. A startling flaw in the book’s case, however, is that it never even attempts to prove that this is possible – that, in other words, we can build our way out of things like the climate crisis.

Any building process, after all, starts with digging the raw materials out of the ground, often at substantial environmental cost. The construction phase can likewise be damaging to delicate wetlands and the habitats of endangered species: hence so many projects get knocked back. 

Funds for new infrastructure are increasingly under strain, as governments face rising healthcare costs and maintenance bills for existing hospitals and power plants. And then there’s the irony that we generate emissions even when building the infrastructure designed to reduce them.

Concrete production alone comprises around 8% of the world’s carbon pollution. Even if one assumes, somewhat heroically, that the carbon used to produce each kilogram of concrete could rapidly be halved, this gain would be completely wiped out by a doubling of concrete production. (And it’s worth remembering that, every two years, China consumes more cement than the US did in a century.)

Such points could be mobilised to serve bad-faith arguments that we should not, for instance, build more houses because of steel and concrete’s embodied carbon. In reality, we need more homes, hence the welcome upzoning of recent years, itself a prefiguration of the abundance agenda. The wider difficulties inherent in building our way out of climate change should, however, give us pause for thought.

For instance, three-quarters of the world’s energy currently comes from fossil fuels. The recent growth in renewable generation is, admittedly, one of our age’s great success stories. Last year, wind and solar farms generated more electricity than coal plants for the first time – and at a rapidly diminishing cost. But is it really conceivable that we can build so much renewable energy that it rapidly replaces almost all fossil fuels, and keeps up with population growth, and meets increased expectations of affluence, while also restoring nature and reducing emissions at the pace the planet demands?

It would, of course, be wonderful if that were true. And the abundance agenda is – it bears repeating – not entirely wrong. Building more homes in city centres, for instance, enables a future of far fewer work commutes, and thus lower emissions. But many of the other innovations designed to deliver us a sacrifice-free but environmentally sustainable economy, such as greener aviation fuels and carbon capture and storage, have failed to produce anything meaningful, and look utterly insufficient in a world where we need to halve emissions by 2030. EVs, meanwhile, are splendid, but replace perhaps 70% of a petrol-fuelled car’s lifetime emissions, not 100%.

We should, at the very least, be placing far more emphasis on exploring whether we can get more out of what we already have. It’s not just peak electricity demand: we might, for instance, avoid the need for a new $4 billion tunnel through Wellington if we could spread out the morning and evening peaks in traffic, through congestion charging, working from home and staggered workday start times. (Better options for cycling, walking and public transport – which, in fairness, Klein and Thompson advocate – are also essential.) It’s unclear if that plan would work – but it should at least be properly explored.

Some years back, Britain’s energy ministry calculated that if everyone boiled only the water they needed for their cup of tea rather than filling the jug, the country could mothball an entire power plant. Equivalent New Zealand calculations are frustratingly hard to find, but we are surely passing up similar opportunities.

Abundance’s boosters would argue that this alternative approach, and indeed anything that involves living more lightly on the earth, relies on heroic assumptions about the sacrifices individuals are willing to make. But this is not a matter of sweeping lifestyle change, just relatively simple things, like switching the times at which we use electricity. To take another example, smart appliances and the like held electricity demand constant throughout much of our last decade. The potential for further innovation is undoubtedly there.

Think of it this way: surely the only logical approach in life is to establish what more one can extract from a given thing, before one goes out and builds a new one. This does not mean abandoning abundance entirely. At least at the level of vibes, its agenda is useful: we should certainly face the future with as much optimism as possible. But building new things is certainly not the only path forward.

The Post: This week’s floods show why we need to talk about climate change - and keep talking

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The most dangerous way to deal with this week’s North Island floods would be to treat them as a one-off event. They are, in fact, an emblem of the damage we do by burning fossil fuels. This is the core truth, and as the floodwaters recede, it must be broadcast again and again, if the public is to be stirred into tackling climate change with the urgency it deserves.

Many readers will have sensed something wearily familiar in this week’s news reports. There have been 20 “red” weather alerts since the Met Service introduced that warning label – the toughest in its arsenal – in 2019. Combined, these alerts recount a tale of accelerating damage.

Flooding hit Southland in early 2020, then Canterbury in 2021, sparking local states of emergency. In 2022, Cyclone Dovi brought record rainfall to the North Island, closing State Highway 1. Later that year, floods caused widespread damage in both Gisborne and Nelson.

Few people have forgotten 2023’s devastating Auckland Anniversary floods, or the destruction later wrought on the East Coast by Cyclone Gabrielle. Then there was 2024’s flooding in Otago, a repeat of the Top of the South floods in 2025, and severe storms elsewhere across the country last year.

Such storms have always occurred, of course, but as the scientist Kevin Trenberth points out, climate change makes them much worse: more common and more extreme. Burning fossil fuels heats the globe. And in that warmer world, extra moisture evaporates from bodies of water, building up in the atmosphere and loading storms with ever-greater power.

At other times, conversely, excess heat dries out the land, leading to more droughts. We now spend less time in typical, “healthy” weather, and more time in the extremes of wet and dry.

This will only worsen. In the words of Hayley Fowler, a Newcastle University climate scientist: “This is the least extreme climate you will experience in your lifetime.” Other scientists have calculated that climate change already costs the globe $16 million an hour in extra floods, hurricanes and heatwaves, a bill that could rise to $3.1 trillion annually by 2050.

These facts are not stated often enough. Scour media reports of this week’s floods, or previous extreme weather events, and you will find few mentions of climate change.

Reporters on the ground are understandably focused on getting first-hand interviews and visuals. In this polarised age, editors are also mindful of not being seen to push an ideological stance.

But the link between climate change and increasingly severe weather events, far from being a political statement, is simply the scientific consensus. If citizens are to properly understand the forces behind everyday phenomena, that link needs to be made clearer in reporting, especially when it has an analytical component.

Our politicians should also be making this connection more often. The reason this matters so much is that so little else seems to capture public attention.

The dire consequences of a warming world, some decades hence, remain remote to many people. By contrast, the increasing ferocity of current weather, and the damage it does to lives, livelihoods and property, is immediately tangible, and impossible to deny.

This week’s events should be used to put pressure on a Government that is failing calamitously on carbon reduction. Its plan for 2026-30 leaves us 84 million tonnes short of our official target, an amount equivalent to more than one year’s emissions.

Pointing out that this failure will contribute to more floods and droughts does not amount to exploiting a crisis; it is simply telling the truth. Of course our total emissions are small in the global context, but they are among the highest on a per-person basis.

We also face a moral responsibility to shoulder our share of the burden rather than lag behind the best performers, as we currently do. And if we shirk our responsibilities, we encourage others to do likewise.

Yet although the climate may never improve, we can help ensure it does not greatly worsen. We can limit, too, the harm done to the poorest households, who are likely to be most affected by climate change despite having done the least to cause it.

According to the World Inequality Database, someone in the highest-earning tenth of New Zealanders has a carbon footprint three times that of the average Kiwi. Even worse are the hyper-wealthy 0.1% with their heavily polluting super-yachts and private jets.

This is not to let everyone else off the hook. We can all live more environmentally sustainable lives, and collectively rewire our energy, transport and housing systems.

But the pictures we see of this week’s catastrophic floods are pictures of ordinary people, many of them not especially well-off, bearing the consequences of a situation created disproportionately by the affluent. That is not a comfortable conversation for many New Zealanders – but it is the conversation we need to have.

The Post: How better modelling could fix economic blind spots

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Sometimes it takes a Queen to raise the tough questions. After the catastrophic 2008 global financial crisis (GFC), Elizabeth II asked British economists, with unusual bluntness: “Why did nobody see it coming?”

Among many other causes, including greed, hubris and free-market ideology, one reason for the blindness was simple: economists’ models flopped. Just before the crisis, America’s Federal Reserve modelled what would happen if US house prices fell by one-fifth, and concluded, “Not much.” In the event, as the effects of a 23% house-price collapse rippled around the globe, millions of people lost their jobs and the American economy alone took a $10 trillion hit.

These issues are aired in a book I read over the break, Making Sense of Chaos, by the pioneering complexity economist J Doyne Farmer, a colourful, bearded American whose research spans multiple domains and whose CV includes stints building computer systems to beat casinos at roulette and outperform the stock market.

Post-GFC, conventional economics has had many antagonists, especially on the left, but too often they have been outsiders decrying economics as nonsense, possibly even evil, certainly to be ignored. Farmer, as a sceptical insider, is far better placed to explain where it has gone wrong, and recommend improvements.

His overarching argument is that economists’ assumptions about human behaviour have generally been both too simplistic, modelling people as self-centred consumers with perfect foresight, and too individualistic, failing to account for the way that our actions intensify and exacerbate each other.

So far, so predictable, for anyone who has been reading the critiques of the last few decades. Where Farmer excels, however, is in explaining why economics fell into error – and it was mostly, he thinks, due to a lack of computer power.

The core assumptions – that people generally maximise their own happiness, predict the future perfectly, and reach “equilibrium” states in which the needs of sellers and buyers line up – were required to make economists’ mathematical equations solvable using pen and paper. Introducing more variables would have rendered the calculations impossible.

Fortunately, we can now replace these mathematical equations and hypothetical individuals, this attempt to predict the future using top-down abstractions, with a much more real-world-focused, ground-up approach based on big data and massive computational power.

Drawing on recent advances in both the latter categories, Farmer has spent much of this century helping pioneer a method called agent-based modelling, in which data about the decision-making of actual people are used to make models in which hundreds of thousands of realistic individuals (“agents”) interact with each other. Modern supercomputers then run repeated simulations of all this interaction, producing predictions of increasing accuracy.

When the Covid-19 pandemic hit Britain, for instance, Farmer’s team at Oxford University modelled its likely economic impact with startling precision, forecasting a fall in GDP of 21.5% against an actual contraction of 22.1%. One crucial advantage of their approach was that it captured what are known as the “emergent” qualities of an economic system: the dynamics that arise only when individuals interact with each other and which cannot be predicted by taking each person in isolation.

As Farmer acknowledges, ordinary people would probably have assumed that this is how economic modelling has always been done. It is this method that has given us weather forecasts of ever-increasing accuracy. And economics is slowly catching up.

Many of the world’s central banks, the equivalents of our Reserve Bank, have begun using agent-based models to better predict economic trends. Farmer’s modelling for the Bank of England helped show that debt-to-income limits – now used here and elsewhere to curb excessive mortgage lending – drastically reduce the likelihood of future housing bubbles.

Such modelling could also help fight climate change. Conventional economic models, Farmer argues, have typically overestimated the cost of reducing emissions and underestimated the benefits.

His team’s modelling suggests the green transition will actually save the world around $12 trillion compared to business as usual, partly because renewables are becoming so much cheaper than fossil fuels. And because scaling-up production generates opportunities for learning-by-doing and further innovation, a faster transition saves more money than a slower one. These results provide powerful support for a rapid economic shift.

Encouragingly, when Farmer gave a webinar to our Treasury last year, many of the participants were enthusiastic about his approach, even if they did point to local data gaps that could hinder its implementation. The Treasury also has in-house expertise in this area.

Better modelling won’t, of course, change the world by itself. Many of our economic problems are at heart political: we tolerate gaping income disparities because we think poor people are lazy, and disastrously high emissions because we’re careless about the natural world.

Nonetheless I found Farmer’s book to be a small ray of hope – a sign that science continues to advance, that policies will slowly improve, and that we can come to better understand our present and, with it, our future.

The Spinoff: When Chlöe met Corbyn – and Varoufakis and Piketty and Polanski and Mazzucato and…

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It was, one of her Instagram followers declared, “a tour of legends”. Another described it as “a full bingo card”. And it does look as if, on her recent European trip, Chlöe Swarbrick met everyone there is to meet on the political and intellectual left.

The list of figures the Greens co-leader encountered during two weeks in September was imposing. Former Labour leader Jeremy Corbyn. Newly appointed UK Greens leader Zack Polanski. Mariana Mazzucato, one of the world’s most-cited economists. Fellow economic superstar Thomas Piketty and his wealth-tax offsider Gabriel Zucman. YouTube sensation Gary Stevenson of Gary’s Economics. Manon Aubry, the leader of the European Parliament’s Left bloc. Economist, ex-politician and left-wing idol Yanis Varoufakis. Guardian columnist George Monbiot. Influential economist Daniela Gabor. And plenty more.

Although primarily in Europe to attend an insurance conference, Swarbrick seized the opportunity to meet these leading figures – and think about how to apply their insights back home. She arrived at a “pretty crazy” time, she tells me when we meet at parliament: 100,000 British far-right supporters were mounting anti-immigration protests, the latest UK left-wing political venture, Your Party, was descending into internecine warfare, and Zucman’s wealth-tax proposals were being bitterly attacked by France’s richest man, Bernard Arnault.

Swarbrick’s encounters covered a vast intellectual terrain, taking in “technofeudalism” with Varoufakis, state capacity with Mazzucato, the carbon transition with Gabor, and wealth taxes with, well, pretty much everyone. Front of mind was the growing evidence that widened material disparities – and the resulting economic insecurity – are the key driver of the public’s growing disenchantment with political institutions. “Pretty much everybody was talking about that interconnection between inequality and democratic decay.” And, consequently, the need to give ordinary people greater control over their economic situation. “Democratising the economy was a very strong thread of all of that [discussion].”

One of her key meetings was with Polanski, a self-described eco-populist who, since becoming leader of Britain’s Greens, has nearly doubled the party’s polling (from 8% to 15%) and membership (from 65,000 to 120,000). The “phenomenal” Polanski, Swarbrick says, has realised that “you cannot get people to care about the end of the world … if they cannot afford to put food on the table at the end of the week”. (Polanski, meanwhile, has returned Swarbrick’s approval, telling the Guardian that she is the living person he most admires, someone “demonstrating the bold leadership that I look to do every single day”.)

Another highlight of her trip came from meeting Mazzucato, who has been hired by multiple countries wanting to know more about her idea that governments should pick national “missions” to drive economic development. The Italian-American economist’s key insight, Swarbrick says, was the need to break the intellectual “deadlock” in which “the right are going ‘Shred the bureaucracy,’ and then the supposedly left-wing argument is, ‘We will keep the bureaucracy.’” The bigger question, as Mazzucato puts it, is, “What is the function of the bureaucracy?” While Swarbrick’s discussions with Mazzucato, Gabor and others took in specific policy ideas (national investment banks, for instance), all were adamant, she says, about the more general need to rebuild state capacity after decades of disrepair.

It wouldn’t, of course, be a Swarbrick trip without at least one “really nerdy breakthrough”, which came courtesy of Piketty, whose 2014 book Capital in the Twenty-First Century restored wealth disparities to their central place in political debate. As much a data nerd as the “economic rock star” he is sometimes labelled, Piketty somehow knew that New Zealand councils levy rates. He pointed out, Swarbrick says, that this means New Zealanders “actually do have exposure to a wealth tax … and isn’t it unfair that that applies only to property and not to financial assets?” That sparked a “hah!” moment in which Swarbrick asked herself, “Why have we not talked about it from this perspective?”

Her meeting with Varoufakis, at one point the intellectual “poster boy” for the European left, was equally memorable. Is he, I ask, as intense as everyone thinks? “Yes,” says Swarbrick, laughing heartily. “He is. But it was honestly really, really cool.” The two talked about the banking system, the military-industrial complex, and potential new forms of international relations. That said, he didn’t appear to her as an oracle, Greek origins notwithstanding. With all these figures “who I have admired for a long time”, Swarbrick says, “you’re sitting in front of them and [you realise] it’s just guys, you know? At the end of the day, we’re all just guys – just people – trying our best!”

Earlier in the interview, she had said, bluntly: “Nobody has all the answers.” And this was her point about Varoufakis – and indeed the other economists she met. Each of them “was able to answer with a huge amount of detail on their specific areas of expertise. But when I would ask them about the crossover and the cross-pollination and what the new economic paradigm looks like, they said that they didn’t feel comfortable, necessarily, to give that answer … They could answer for their part in that, but not necessarily the whole.”

If, in short, Swarbrick had hoped to be handed an economic blueprint, she would have been disappointed. Instagram clips from her encounter with Polanski show him acknowledging she has “a better answer” than he does on the global economy, while her appearance on Gary’s Economics starts with Stevenson asking her for advice about “how to influence [the] politics” of wealth taxes.

Did she, I ask, travel to Europe hoping to be schooled by its political leaders and instead end up schooling them? Swarbrick laughs uproariously, then sensibly pivots to talking about the task ahead. As she sees it, some 40 years after the advent of the market-fundamentalist, hyper-individualist ideology sometimes known as neoliberalism, a new overarching left-wing narrative remains to be written. “We are very much now in a place [where] we have to build the new house we want to move into. And we know what some of the foundations and some of those building blocks look like. But there are a lot of decisions we have to make about design.”

And for all that the figures Swarbrick met on her trip were left-wing heroes, they were also united by another characteristic: none had ever won power. (Except Varoufakis, who was part of the Greek government in 2015 – but even he was famously unenthused by the experience, jumping ship after just six months.) Does it worry Swarbrick that she didn’t meet any outright electoral winners? She laughs again, and says: “I think nobody so far has done what we want to do.”

She was, however, heartened by hanging out with Stevenson in London and “just watching regular people come up to him and be like, ‘Tax wealth!’, and for that to be such a normalised conversation in the UK.” Meanwhile, Piketty and Zucman were “feeling good” despite – or perhaps because of – being assailed by the French elite. “They understand that having entrenched power attack you, because you are speaking truth to that power, provides you with a platform. And if you can stand calmly in that space, can continue to hold that mirror up and speak that truth, then that cuts through in a way that resonates with people.”

For all that, the forces currently taking power across Europe come from the far right, not the radical left. But Swarbrick still believes victory is on the way – if the left can build a big enough volunteer army.

At this point, a conversation ostensibly about ideas becomes one about political organisation. “I think we’ve got very good academic and economic credibility for our arguments,” Swarbrick says. “But translating that into the real world, building trust in people’s belief that there is possible [change], and then actually enacting that … is a very different proposition.”

This, she says, “is where organisation is still the big missing piece – organisation on the ground”. She points to Polanski’s success in boosting the British Greens’ membership, to the point where it has reportedly surpassed that of the centrist Liberal Democrats and even the “natural party of government”, the Conservatives. (On her trip, Swarbrick also met the two leading figures behind Your Party, Jeremy Corbyn and left-wing firebrand Zarah Sultana, but is unsurprisingly more guarded about those encounters, noting only that the nascent party’s internal fighting is “rough as guts”.)

In New Zealand as elsewhere, it tends to be centre-left Labour and Democratic parties that have the strongest ground game. So could the Greens really surpass them? “Over time, yes,” Swarbrick says. One central task is “building coalitions” with faith groups, community organisations and the union movement, although the latter’s historical ties to Labour means any relationship with the Greens “will look different”.

The task for politicians, as she sees it, is to “think beyond electoral cycles” and generate public trust by being less opportunistic. “People, when you talk to them on the ground, don’t just want politicians to turn up when it’s election year and times are easy and they’re cutting ribbons. They want you to turn up when they’re having a bad day and stuff is hard. That process of constant accountability – that is where you build trust.”

This insight serves, in fact, as Swarbrick’s “major takeaway” from her trip. “I think we have … a really good diagnosis of the problem, we have clarity on a number of the tools that are necessary to move forward. But the gap that we have to bridge is trust.”

The Post: Why this might be the ‘angry centrist’ election

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The current paradox of New Zealand politics is that the public is the angriest it’s been for decades – but has in no sense shifted decisively left or right.

The country isn’t doing well: everyone knows that. The health system is a mess, our infrastructure is crumbling, and thousands are leaving for Australia. Still in the grip of the long pandemic-era hangover, the public’s ambient mood is bad.

None of this, though, has pushed middle New Zealand into the arms of either the right or the left. Big change may well be waiting in the wings: in this country we get it every 40 to 50 years, starting with the 1890s Liberal creation of a bare-bones social welfare state, continuing with the first Labour government’s 1930s-era fulfilment of that dream, and culminating in the fourth Labour government’s betrayal of it in the 1980s.

But even on that timetable, the next sweeping shift might not arrive until the next decade. Right now, one can feel the pressure build without any clear sense of where it will burst out.

Partisans on the right point to an increased ACT vote share, up at 8% versus less than 1% last decade. But that’s counterbalanced by a strengthened Green Party, comfortably polling twice the 5% threshold it once looked set to fall below.

Feeling these opposing pulls, middle New Zealand remains exactly where it was: dissatisfied with life but unsure about the proffered solutions. Which is where the latest theory from the New York Times comes in.

Mapping hundreds of recent American electoral contests, the Times has found that the politicians who can win crucial swing states and voters are what it calls “angry centrists”. As the name suggests, these are not the bland, status-quo-defending moderates of days gone by.

They are, instead, people like Ohio Democrat Marcy Kaptur, who happily attacks “the far right taking away women’s rights and protecting greedy corporations at every turn” but also lambasts “the far left ignoring millions illegally crossing the border and trying to defund the police”. Kaptur got re-elected in a state Donald Trump won by seven percentage points.

Such politicians, in short, are left-wing on economic issues and right-wing on cultural ones. They want to break up corporate oligopolies but take a tough line on crime. Far from being boring, angry centrists are “combative and populist”, the Times argues, promising sweeping change while criticising mainstream elites as out of touch.

If middle New Zealand is indeed resolutely centrist but also very angry, such an approach could be electorally potent. Analysis by the Post’s Henry Cooke shows 71% of 2023’s swing voters thought the economy had got “a lot worse”, but only 2% wanted further progress on Treaty issues.

Angry centrism is, of course, what New Zealand First does already. And one can also see the appeal for Labour.

The party knows that the cost of living is the dominant issue in New Zealand politics. Its MPs talk glowingly of their Australian counterparts’ decisive victory in May, one underpinned by Anthony Albanese’s relentless focus on household budgets and material issues.

New Zealand Labour’s greatest problem is that, having chosen a minimalist capital gains tax that garners equally minimal revenue, it will be unable to spend much on alleviating cost-of-living pressures. This puts even more onus on areas like competition policy.

Populist moves to break up oligopolies in energy generation, supermarkets and elsewhere could both lower prices and harness public anger. The bargaining strength of workers could also be boosted without any strain on the government’s books.

Such a focus on economic issues, at the expense of cultural ones, might be hard to justify ethically. Women still face horrendous levels of domestic violence; Israeli forces have killed 20,000 innocent children in Gaza; Māori live seven years fewer than Pākehā and are discriminated against in hospitals and courtrooms.

Middle New Zealand doesn’t have hard-right views on these issues. But it almost certainly doesn’t want to hear politicians focusing on them. The more that Labour does so, the less likely it is to win next year.

Winston Peters will still try to fight the culture war fight. But his attacks on “woke” politics and gender-neutral toilets will be, as much as anything else, wedges used to separate Labour from middle New Zealand.

Watching the main centre-left party trying not to engage on these cultural issues, while also not going so far right as to alienate its base, is unlikely to be an edifying experience.

But as the British pollster Michael Ashcroft once wrote: “If an election is an exam, voters will set the question; parties that choose to answer a different question will be marked accordingly.”

The state of the economy is foremost in the public’s mind and, like it or not, looks set to dominate the year ahead.

The Spinoff: Why does it feel like everyone hates the state?

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In September, the commentator and PR expert David Cormack stirred up his readers by writing: “I long believed [the existence of] charities indicated that the state wasn’t doing its job …. But maybe I’m looking at it the wrong way. Perhaps the real issue is expecting the state to show care at all. The evidence is clear: they don’t. And maybe they never will.”

Such comments would be unremarkable coming from the hard right, but Cormack is a former Greens staffer. He’s also channelling an ambient despair about the state of the state. Grant Duncan, an honorary researcher at the University of Auckland, wrote in October that New Zealand’s state “is eroding like a sandcastle, as public confidence and political consensus crumble beneath the waves of global change”.

Rhetorical exaggerations aside, such sentiments are now relatively common. Around Wellington, I often hear the public service described as inward-looking, out of touch with ordinary New Zealanders, or unable even to deliver decent services. It still employs driven and talented people. But even among its usual defenders – those who work in it – I hear a growing concern that government has somehow lost its way.

The state has always had its critics, especially among right-wingers and the radical left. Māori have long resisted it. But the lineup of critics now includes many social democrats, the authoritarian new right, and some government staffers. Although it retains immense power, the state has paradoxically few friends. Indeed it faces a greater challenge than any I can remember.

Nor is the chorus of critique specific to this government, although the coalition’s actions alarm many. The challenge, rather, is to the state itself – the collected agencies and departments that regulate the country, or, defined more broadly, the power of governing that each successive administration wields but must relinquish to its successor. The question is whether the current negative sentiment is merely a dip, a localised depression that can be lifted by well-judged tweaks, or whether we stand on the edge of something much more profound.

One plausible argument is that, in a decade’s time, the state as we currently know it – its schools and hospitals, its health and safety regulations, its justice system and so on – will be largely intact. 

As recently as 2017, the elite consensus was that the state could deliver services tolerably well. By this I don’t mean that New Zealand was a utopia. It endured racism, poverty, environmental degradation and many other ills. But that was all plausibly a result of the kinds of governments we elected, not a basic inability of the institutions of the state to deliver those governments’ pledges.

Now, though, there is a widespread belief – rightly or wrongly – that state agencies are a little like a slack piece of string: push one end, and nothing happens at the other. This sense is strongly connected to the perceived failings of the last Labour government.

Labour, as it happens, delivered rather more than is now remembered, including the legalisation of abortion, a rapid ramping up of state house-building, and an effective free school lunch programme. But it also famously struggled to implement policies like Kiwibuild and Auckland light rail. An extra $2 billion was spent on mental health services without anyone being able to show what it achieved. Overall, government spending rose by around one-quarter, adjusting for inflation and population growth, with decidedly mixed results.

The question, though, is whether those failures represent an existential problem for the New Zealand state, or whether they largely reflect one-off events – the pandemic, most obviously, but also the mosque shootings and the Whakaari White Island disaster – as well as Labour’s evident unreadiness for government. 

National’s argument is that the issues are relatively self-contained. Quarterly plans and KPIs will focus efforts. Social investment will measure “what works” and ensure that spending is effective. Better contracts for NGOs will break down enervating governmental silos.

The actual implementation of this approach is easily critiqued: social investment, for one, currently looks more like social disinvestment. But National’s approach is not wholly implausible. And it is complemented by other, under-the-radar work in areas like building projects, where the Infrastructure Commission is slowly bringing more rigour to the way that we plan for hospitals, roads and the like. 

Confidence in public agencies is also more robust than people think. Overall trust in government was higher in 2023 than it was in 1993, even if it has probably fallen since. Four-fifths of New Zealanders are satisfied with the public services they receive. Trust in the public service “brand” is higher than it was in 2015, albeit lower for Māori and Pacific Peoples than for other ethnicities.

On this reading, the challenges to the state are relatively superficial, focused on questions of delivery and amenable to targeted measures. But what if the problems run much deeper?

Many of the alleged defects of government date back decades. Most observers believe agencies struggle to comprehend the mega-trends of the age – population ageing, climate change, AI. The auditor-general has repeatedly warned that we know precious little about the effects of many government programmes. Far-sighted governance is, ironically, seldom sighted. Effective cross-agency working is even rarer. 

Free and frank advice, meanwhile, is generally thought to be on the wane. The public service no longer seems to be a home for bold, creative problem-solvers. And its staffers often appear profoundly distanced from the communities they are supposed to serve.

The system still contains well-motivated public servants trying to make a difference and defend the common good; especially at the frontline, some staff go above and beyond. But the agencies and structures in which they work often thwart their initiative.

Nor does government appear to be future-proofed. AI, for instance, is not just a tool to speed up service delivery; it will irrevocably change how we work, establish shared truths, and even determine what it means to be human. But is our government well-prepared for these profound shifts? Only the foolhardy would say yes.

The underlying environment in which government operates has also become harder to manage. The past was, admittedly, a more complex place than people recall; memory has a habit of flattening out such wrinkles. But societies are undeniably becoming more diverse and more fluid: less ethnically homogenous, less oriented around predictable career structures. The world is increasingly riven by geopolitical conflict, trade wars, and actual war.

Meanwhile we live in a less deferential age. Unquestioning acceptance of authority is rare. Most people exercise unprecedented consumer choices, and expect something vaguely similar from government. Young people in particular have a greater expectation of being heard, and are frustrated by being ignored instead. The world has changed; the way the government works, by and large, has not.

The state also faces an ambivalent challenge from the authoritarian new right, exemplified by Donald Trump and his fellow travellers. Their vision of the world is one part hyper-individualist: hence Trump’s sweeping tax cuts for the rich. But it is also one part big-statist: witness the whole tariff saga, a story that has offended libertarians more than anyone else.

The populist challenge, as it manifests in New Zealand, is less about cutting back government and more about denigrating the idea that state agencies have any independent role in protecting due process, any separate guardianship of the public interest. Every time Shane Jones threatens to “exterminate” public servants and their pesky procedures, every time ministers arrogate more powers to themselves under the fast-track process, the traditional ideal of the neutral and competent state is noticeably degraded.

These are all hard challenges. The most comprehensive, however, is coming – has always come – from Māori. The legendary sociologist Max Weber famously described the state as the organisation that exercises “a monopoly over the legitimate use of physical force”, but Māori thinkers and activists have long made it clear that they do not regard the state’s use of force as legitimate (to put it mildly). Te Tiriti o Waitangi, the version that rangatira signed, preserves their sovereignty; even the English-language version arguably leaves their domestic autonomy untouched.

And for all that the current government is winding back Māori rights, we are witnessing the emergence of indigenous economic and political institutions that arguably have state-like qualities. Māori have long enjoyed a distinct education system in the form of kōhanga reo and kura kaupapa. Now, iwi like Ngāti Toa are using their economic base to slowly repurchase land; they also run chains of health clinics and other services.

All this operates, for the moment, within the Crown’s authority. But thinkers like Moana Jackson have started to sketch out a world in which Māori construct their own political institutions, operating peacefully alongside – and frequently interacting with – the departments and agencies of the Crown. How quickly this vision will become a reality is anyone’s guess. But it unmistakably challenges the traditional idea of the state.

None of this suggests that the state’s problems can be solved with a few KPIs and a dash of social-return-on-investment analysis. The state is, in some senses, alienated from its citizens. This alienation, and the failure to deliver improved living standards, are what lie behind the authoritarian-populist revolt. Over a decade ago, the writer Peter Mair argued that many ostensibly democratic administrations were in fact “governing the void”.

It is hardly surprising, then, that writers like David Cormack think it’s time “to stop relying on the government altogether” and to build anew, through “communities taking care of themselves” and other institutions of local self-help. (Libertarians, with their long-standing distaste for the big state, would argue for something similar.) Such utopias would face large obstacles: the time taken from daily lives, the difficulties communities would experience trying to build national grids and all the other things the state does at scale, the reliance on solidarity trumping self-interest almost every time. But the longer the social-democratic state degrades, the more appealing such visions will become.

The alternative, for social democrats like myself, is to rethink the state, to simultaneously revitalise and humble it, to bring it up to date with 21st-century needs and local realities. Any worthwhile conception of social democracy must, for starters, be flexible enough to accommodate indigenous autonomy and the institutions that will give it life.

Within the Crown’s sphere of governance, I would bet big on age-old political traditions that include participatory democracy – in which ordinary citizens take more decisions and elected representatives fewer – and deliberative democracy, which privileges listening, reciprocal turn-taking in speech, and, where possible, a search for consensus. Together, these two forms of decision-making are sometimes called everyday democracy because of the way they weave political decision-making and public freedom into people’s day-to-day lives. They combine, on the one hand, the pragmatic need for some kind of state to do all the national-level governing that the modern world requires and, on the other, a devolution of as much control to communities as possible.

The state has, of course, done immense harm to some communities, not least Māori. But I don’t think that means it is inherently incapable of care. What else do nurses and teachers do every day, except express their love and care for patients and children? And they are, in workforce terms, the single biggest part of the state. 

Of course even teachers and nurses carry out their work imperfectly, sometimes inequitably. The state needs to be far better than it is now. As multiple questions about its ability and authority coalesce, it faces a greater challenge, a more pervasive distrust, than I have ever seen. Though not about to collapse, it risks a slow degradation and erosion. In the face of this danger, reform is essential – and not in some far-off future, but starting right now.

The Post: The left needs to come up with a coherent message on the economy

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Pop quiz: could you tell me the Government’s narrative about how we fix the economy? Pop quiz part two: could you tell me the Opposition’s version?

Whatever your political beliefs, I suspect you’d find the former easier to describe than the latter. The Government, Christopher Luxon constantly tells us, has got inflation under control by curbing Labour’s “wasteful” spending, and is now “laser-focused” on getting rid of red tape so that Kiwi entrepreneurs can build flourishing businesses and we all become better off.

If he has a little more time, and is trying more directly to win over Labour voters, the prime minister will add something about lifting school standards, building infrastructure and reforming the RMA, all actions notionally designed to lay the foundations of long-term prosperity. But the core of his message is short and simple.

It may not be especially accurate: falling inflation, for instance, has had almost nothing to do with his Government’s actions, and everything to do with the Reserve Bank’s hiking of interest rates. But Luxon sticks to his message, as do his ministers and coalition partners; the public, accordingly, absorbs a clear and comprehensible story about how we raise our living standards.

By contrast, the opposition’s narrative about the economy is … what, exactly? Labour, the Greens and others have done a reasonably good job of prosecuting the Government’s failures, notably the calamitous decision to cut back on state house-building, classroom construction and other infrastructure projects just as the economy was in a state of collapse and crying out for stimulus.

When it comes to solutions, however, the picture becomes much muddier. Occasionally the Opposition talks about shifting investment away from housing and into more economically productive areas. Ideas are floated about boosting savings and backing Kiwi businesses.

The Greens in particular have a detailed fiscal strategy that makes the case for higher taxes to deliver better public services and greater borrowing to deliver the infrastructure future generations will need. But a strategy isn’t the same thing as a story.

If, as I suspect, many left-wingers could more clearly articulate their opponents’ economic message than they could their own, it suggests there has been a significant failure to develop an alternative narration. And that matters in a week when even a commentator like Bernard Hickey, long sceptical about the promised economic recovery, has acknowledged “green shoots” in the form of increased retail spending and rising business activity.

The Government’s critics may argue that no matter how strong National’s message discipline, the public aren’t buying the story. Unemployment has spiked, people are fleeing the country in droves, and Labour is now the party most trusted on the economy.

But as business activity regathers strength, the Government’s message will become more convincing, amplified by the public’s underlying belief that the right are better economic managers than the left. Time-poor and disengaged from politics, swing voters may be easily persuaded by the Government’s simple message, often repeated.

Constructing an alternative story is far from impossible. And it needn’t be especially original; National’s isn’t. (Indeed it is just a variation of the age-old right-wing fable: get government out of the way and watch the economy boom.)

The best alternative tale is probably a variation on bottom-up economics. The economy will thrive only if everyone, especially those who are currently struggling, can contribute to their full potential.

That requires foundational government investments in housing, education and healthcare, to help people maximise their abilities, and employment policies – higher minimum wages and so on – to ensure ordinary Kiwis’ hard work is rewarded. To put it in metaphorical terms: we’re all on the same waka, and that waka will forge ahead only if we make sure everyone on board can paddle at top speed.

This is, of course, far from the whole story. A fuller narrative would have to encompass the government’s role in shaping the economy’s direction – industrial policy, in other words – and the need to ensure any economic growth is compatible with protecting the planet.

This reflects an innate disadvantage the left faces in politics. The right’s story – not just on the economy but about life in general – is always much simpler: individuals are to blame for their success or failure.

The left, conversely, has to construct an account of the many and varied forces – poverty, discrimination, difficult upbringings, failures of public services, neighbourhood effects and so on – that can conspire to cast people down or lift them up. It is just an inherently more complex story.

Be that as it may, coherent narratives are still needed. And those narratives are only ever the wrapping, the covering, the envelope. The thinking that lies inside them must also be coherent.

Just as bad prose often indicates muddled argument, an unclear narrative often points to a lack of a comprehensive plan. That, in fact, may be the left’s biggest weakness.

The Spinoff: The warning signs for New Zealand in England’s ‘back to basics’ school reforms

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New Zealand education minister Erica Stanford’s controversial curriculum reforms are not without precedent. Around a decade ago, a right-wing English education secretary, Michael Gove, instituted a sweeping set of changes designed to make instruction – in a phrase now deeply familiar to Kiwi teachers – “knowledge-rich”. 

Stanford and Gove have, unsurprisingly, met and shared notes, and the former has been explicit about the inspiration she takes from England’s experience. So it should concern us that a landmark review of the latter’s reforms has just found that, alongside some notable successes, they created exactly the kinds of problems that Kiwi teachers worry will crop up here.

Like Stanford, Gove was driven by a core belief that teaching had become too focused on developing broader competencies and thought processes, and insufficiently attentive to imparting core facts and knowledge. He sought to set out a clearer list of exactly what children “should” learn, privileging a “core” curriculum while invoking ideas of rigour and structure.

None of these ideas is inherently unhelpful. But Gove was – and is – a famously complex person; despite being known as “Mike the polite” for his old-school courtesy, he was also capable of the most vicious backstabbing imaginable. And that duality can be seen in his curriculum reforms.

Last week’s review, commissioned by the current Labour government and staffed by experts, feels comprehensive, nuanced and thoughtful, a world away from the political hatchet jobs that often result from such exercises. So it is important that the review finds Gove’s reforms “have had a positive impact on attainment”. English 15-year-olds perform above the developed-country average in reading, maths and science, while 16-19-year-olds do “substantially better” than average in literacy and problem-solving, having made “significant improvements” since 2012.

Given New Zealand’s well-publicised slide down the developed-country rankings, these results will be music to Stanford’s ears. The rest of the review, however, bears many cautionary tales.

The first is that the gap in achievement between poorer and richer pupils “remains stubbornly wide”, and those with special educational needs struggle. Some gaps “are widening rather than narrowing”. This is less a criticism of curriculum reforms, of course, than a reminder of their limitations.

As educationalists constantly point out, but the public struggles to comprehend, most of what affects students’ marks happens outside the school gates. Socioeconomic factors – poverty prominent among them – account for 60-80% of the variance in children’s test scores. The failure of Stanford’s government to tackle poverty will always be a roadblock to her potential success.

Gove’s reforms, by emphasising a “core” curriculum, have also narrowed the learning experience. That “core”, extending as it did to languages, history and geography, was thankfully less narrow than our own government’s borderline obsessional focus on English and maths. Nonetheless the review finds that England’s curriculum measures have “unnecessarily constrained students’ choices”.

Predictably, the arts and other enrichment activities have been badly hit. Theatre-related content has been “significantly reduced”, the review concludes, and student numbers are sharply declining. The same story broadly holds in music and dance. And these subjects are not nice-to-haves: the arts are fundamental to the human experience, a crucial source of beauty and understanding, and cannot be sidelined without great damage.

Nor is that the end of the problems identified by the review. It highlights an obsession with tests and exams, which in England are administered at twice or even three times the volume of other high-performing countries such as Ireland and Canada. 

Critics have also stressed the rigidity of Gove’s reforms, their unyielding belief that people holding power can dictate a minutely detailed list of facts that pupils “must” acquire. The review finds “a disproportionate focus on rote learning to pass exams”, impeding students’ efforts to comprehensively understand their subjects and acquire the skills needed to grapple with the real world. 

Most history teachers want the level of prescribed content “reduced significantly”. In maths, meanwhile, too many terms are rapidly introduced and then rigidly drilled, again at the expense of a deep engagement “with foundational mathematical concepts” and “non-routine problem-solving”. This leads to “only a superficial understanding of the fundamentals” and limited ability to apply knowledge to real problems.

It is a similar story in English, where the curriculum reflects Gove’s obsession with teaching grammatical terms like “fronted adverbials”, resulting in instruction that is overly theoretical, unengaging to pupils, “and, crucially, does not help them to write well”. In art, meanwhile, works by ethnic minority artists are seldom used. Young people, presumably including many from non-white backgrounds, told the review panel that not seeing people like themselves in curriculum materials was demotivating – a point that the review panel noted was supported by wider evidence.

Given the above rigidity, it is not surprising that the review echoes concerns – often expressed by England’s teaching profession – that an overly prescriptive curriculum can sap motivation or simply prove unworkable. The review notes that the curriculum must ensure “the professional autonomy of teachers”, adding that those teachers should be able “to bring the curriculum to life … to reflect their students’ lives and experiences”.

In all this, the resemblance to Stanford’s proposed reforms is unmistakable. Although there has been substantial goodwill among New Zealand educators to fix some of NCEA’s shortcomings, there is now also a substantial backlash against a new curriculum that, like Gove’s, can seem at times old-fashioned, overly narrow, and too focused on western “classics” at the expense of everything else. The review does not argue that Gove’s reforms have been an outright disaster, as some claim. Many aspects, it says, “are working well”. But it also lays bare the all-too-real dangers of a rigid curriculum.

The Post: How kids are the key to our KiwiSaver future

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The trans-Tasman “rivalry” has always had an embarrassing edge, because – as with all such contests between countries of disparate sizes – it means so much more to the smaller party. Australians, as far as I can tell, barely register New Zealand’s existence outside of sports matches; some Kiwis, by contrast, are obsessed by events across the Ditch.

As the two countries’ economic fortunes diverge, and the malaise surrounding New Zealand’s standard of living deepens, the rivalry on the Kiwi side takes an ever-more-envious tone. Forget the fine weather and the golden beaches: it’s Australia’s incomes, infrastructure and overall development that now excite especial jealousy.

This Ocker prosperity has multiple roots, including a resources boom that New Zealand probably cannot – and to an extent should not – try to emulate. But another crucial factor, many economists argue, is the bigger country’s radically different approach to savings.

Decades ago, our two nations took alternative paths. In the 1970s, New Zealand – in the persona of Robert Muldoon – rejected proposals for compulsory savings; in the 1990s Australia embraced the idea wholeheartedly.

Aussie firms now have to pay superannuation contributions equivalent to 12% of each employee’s salary. According to the Association of Superannuation Funds of Australia (ASFA), this has helped generate NZ$4.6 trillion – yes, trillion– in savings. By contrast, KiwiSaver is worth around $120bn, and the Cullen Fund – effectively a down-payment on the future cost of New Zealand Super – another $90bn.

Australia’s stronger savings culture is not only good in itself: it also boosts investment in domestic ventures. Although the country’s superannuation funds sensibly invest large amounts offshore, they also own one-fifth of the Australian stock-market. That local investment helps create more jobs and higher wages.

It looks, on the surface, a near-perfect scenario, and unsurprisingly the calls for us to copy it are only growing louder. But we need to look deeper before we take that leap.

First of all, the Australian system, in the words of ANZ’s Fiona Mackenzie, “hard codes” working-age disparities into later life. Minimum-wage workers and corporate millionaires will effectively be saving 12% of radically different salaries, and enjoy radically different retirements.

As our own Retirement Commission has concluded, New Zealand’s system – based around a universal and relatively generous public pension – reduces income disparities in retirement. Australia’s system perpetuates them.

Second, the compulsory Australian scheme is buttressed by expensive tax breaks for saving. The income diverted into superannuation accounts, and the returns earned by those investments, are both taxed at just 15%.

For people earning over A$250,000, that rate is doubled to 30%. But that’s still well below the top income tax rate of 45%.

As a result, Australia spends tens of billions of dollars on tax breaks for pension savings – around 2.5% of GDP, the equivalent of $11bn-12bn here. And such tax breaks typically provide the biggest gain to those who have the most to save – that is, the well-off.

This, in a nutshell, is the problem with the calls for New Zealand to likewise stop taxing savings. It can sound eminently sensible until one understands its potential to be both enormously expensive and hugely regressive.

What, then, is the alternative? This week the think-tank I helped found, the Institute for Democratic and Economic Analysis, put forward a policy that could be an alternative – or at least a complement – to the Australian system.

We’ve proposed a Kids KiwiSaver scheme in which every child would be enrolled at birth. The government would give their account a kick-start payment, match small annual contributions from their parents, and potentially provide direct assistance to low-income families, ensuring their children weren’t disadvantaged.

Because the scheme would draw on the magic of compound interest and stock-market returns, its first-year cost to government would be relatively small – potentially $20m-80m – while generating tens of billions of dollars over time.

From the young person’s perspective, the scheme could plausibly produce savings of $10,000-20,000 by the time they hit 18. Those savings could then roll over into standard KiwiSaver accounts, giving every young adult a clear pathway to home-ownership and retirement savings, and building a firm foundation for their future success.

Especially if the scheme were weighted towards poorer children – for instance, through direct government payments into their accounts – it could be a much more sensible way to build savings than big tax breaks for higher earners.

It could also be a valuable complement to compulsory KiwiSaver. If we went down that path, it would be all the more important to ensure everyone was starting their adult savings journey on an even footing. Kids KiwiSaver could do that job.

We would still need to narrow income disparities in the workplace, and preserve New Zealand Super’s poverty-reduction power. But a Kids KiwiSaver scheme could be one step towards a better savings future for all – a long-lasting legacy that gives us the chance to reverse some of our past economic missteps.

The Spinoff: One reason the left keeps losing economic arguments

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It is often said that in politics, explaining is losing. No wonder, then, that the left’s explanation-heavy forays into debating economics typically look like one defeat after another.

Nowhere is this more obvious than in the discussions about government debt – the amount our politicians have borrowed from financial markets in order to pay for things they cannot currently afford. This is a hugely consequential issue. A political party’s attitude towards government debt not only determines what we can and cannot build, it also serves as a metaphor for their economic credibility and, thus, their electability.

When National argues that the government needs to curb its borrowing, it relies on the readily comprehensible metaphor of the domestic economy. As finance minister Nicola Willis always says around budget time: “Like Kiwi households, we are tightening our belt.” Middle New Zealand, by and large, nods in agreement.

The left then launches into a complicated explanation of why, actually, the government is nothing like a household, citing reasons such as counter-cyclical policy, monetary sovereignty and intergenerational equity. It promptly loses the public argument. 

How to escape this trap? Though some would find it a bitter mouthful to digest, the left would be better off accepting the “government as household” metaphor – and turning it to its advantage.

One of the weaknesses in the right’s argument, after all, is the claim that we shouldn’t run up debts for the future. Yet this is precisely what households – and indeed businesses – do all the time.

The point about borrowing, when done sensibly, is that it enlarges one’s future means. Without it, individuals and organisations would be hopelessly constrained by their day-to-day income.

A business may, for instance, borrow $100 million from a bank in order to build a new factory. The $5 million it pays every year in interest on the borrowing (assuming a rate of 5%) could be attacked as unaffordable. But if the factory increases the firm’s revenue by $20 million a year, the annual interest charge is a tiny price to pay (and the borrowing is soon repaid). The company can easily afford the expense because the borrowing has permanently enlarged its capacity to pay.

Households, too, are constantly borrowing – most obviously in the form of mortgages. This allows them to purchase homes they could never afford based on their current means. The advantages are less about economics and more about building a nest. But the associated security and stability undoubtedly have flow-on financial effects.

This logic gives the left a readily comprehensible way to defend government borrowing. If the state relied solely on current tax revenues, it could not afford the new water pipes, hospitals and power generation on which this country’s future prosperity depends.

And once it has, through extra borrowing, built that infrastructure, our means will be permanently enlarged. As with households, that enlargement comes in non-financial forms: safer drinking water, better health, lower carbon emissions. And as with businesses, it comes in financial forms: the higher tax revenues generated from the extra economic activity this infrastructure makes possible. 

It may seem alarming that the government’s annual interest charge – the amount it pays lenders for the privilege of borrowing their money – has reached $8.9 billion. But not only is it a very small proportion of New Zealand’s annual income of around $450 billion, it’s simply the cost of enlarging our future means. 

As long as the borrowed money is well spent, we will generate far more than $8.9 billion – in financial and non-financial benefits – from the infrastructure that this borrowing has enabled. On these terms, borrowing is far from irresponsible; not borrowing would be the irresponsible move.

This argument gains extra strength from an element that does – to give the left some credit – make governments slightly different from households: their intergenerational nature. Future generations will benefit from the infrastructure built through borrowing, so they should pay some of the cost of said infrastructure, via interest charges spread over the coming decades. This, though, is an argument that can be bolted onto the “government as household” metaphor; it does not directly contradict it. 

The household metaphor also provides a simple way to explain whether borrowing is appropriate. Although households legitimately borrow to buy the family home, they shouldn’t put their groceries on the credit card. That’s what day-to-day income is for. On parallel lines, governments can legitimately borrow for infrastructure, but not to pay nurses’ salaries. That’s what tax revenue is for.

The “government as household” metaphor faces its greatest challenge during recessions, when the state must prop up the economy by borrowing and spending more precisely because households are not. If everyone “tightens their belt” at the same time, the resulting contraction can be disastrous, as this government has discovered.

That insight provides Labour with a defence of its past economic record: by and large its borrowing was a necessary way to counteract household retrenchment during the pandemic, just as Bill English borrowed to get us through the GFC. But that insight will be far less relevant next year when – barring unforeseen disasters – the economy will be growing again.

In 2026, National will be once more telling voters that, like a household, New Zealand needs to live within its existing means, borrowing and spending less and – in consequence – unable to afford the things it might like. National will also claim that because the opposition doesn’t understand this reality, it cannot be trusted with the public finances.

The left can launch into another series of explanations about why the government isn’t like a household, arguments that, though correct in part, will be basically unintelligible to swing voters. Or it can accept the “government as household” metaphor, flawed though it may be, and start pointing out why it supports a much bigger government than Nicola Willis would like to admit.