The Key government has an agenda. They want to move New Zealand towards a small government — less intervention — lower tax position. However, their party (the gNATs) was scarred by the backlash to Ruth Richardson in the aftermath of the last economic downturn (in the mid 1980s).

She cut benefits, increased transparency and decreased the power of the civil bureaucracy. And Wellington has never forgiven her. Helen got in at the end of that period…. and over the next decade increased the role of the state and the civil service.

She is still loved in Wellington… and by the elite. Key is trying to move “reasonably” towards fiscal responsibility. With the left resisting all the way.

The problem is that we are still running up a tab — to the tune of 250 million a week, at a time when the world is losing patience with profligate governments. Most of the EU and the USA are technically bankrupt.

New Zealand is not. But our loans are being under-subscribed. We are being dragged into the morass.