Grant Robertson's about-face on debt

Minister of Finance Grant Robertson's position on public debt has drastically changed since moving out of opposition.
Minister of Finance Grant Robertson's position on public debt has drastically changed since moving out of opposition.

OPINION: When he isn't using social media to shame Wellington's landlords, Grant Robertson is New Zealand's Minister of Finance.

In that capacity, he recently took to Radio NZ to assure the country that we are well placed to weather any global economic shock. The fundamentals of our economy are strong, he says.

Why should we be so confident? "The low level of public debt is a really important part of it," Robertson told Guyon Espiner. We are "a country that always has to be aware of external shocks" and that this is "...why we keep our public debt lower than a lot of other countries".

Huh? This is the same man who, since becoming opposition finance spokesman in 2014, has repeatedly criticised the government for the same level of public debt. It is, in fact, the same person who said in 2016 said the amount of debt accrued to that point would hamstring our ability to respond to the next downturn.

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It gets even weirder when you consider it was also Robertson who fretted about our borrowing, but is now part of a government that has promised to spend even more. And some of this will be funded by the cancellation of tax cuts for middle earners, but a lot of it won't be. In other words, the new government will be borrowing more than the previous one.

Looking at the facts, I think this year's version of Robertson has the better of the argument. Expressed as a percentage of Gross Domestic Product, our sovereign debt is low compared to most countries. In fact, we have one of the smallest levels of such debt in the OECD.

But this was the case before the election. So why is the Robertson of 2018 so much at odds with the Robertson of 2014 to 2017? There are four possible explanations, none of which are particularly flattering.

First, he might not have actually understood our public debt levels before now. In opposition, he may have been just too busy protesting the TPP to study up on the issue properly. But now that his feet are under the desk, it may be that he's looked into it and come to the view he professed on Radio NZ.

Second, he may have had a grip on the debt situation but thought it was good politics to attack National for it anyway. Divorced from context, the amount that the government borrows looks enormous. Randomly select 10 voters and ask them to write down an appropriate dollar amount for the national debt. I bet that none of them would know where to start.

It would not be the first time a politician sought mileage from public ignorance.

Third, perhaps Robertson actually still believes the public debt is still really worrying.

Now he has the job, however, he sees that there's nothing that can be done about it in the short term. So, to put the best face on the situation and shore up public confidence, he is taking a public position at variance from his private views.

Lastly, perhaps he has just seamlessly moved from opposition to a government without even blinking. It could be as simple as everything under National being bad and everything under Labour being good. Since Labour is in power, the debt is not a problem whereas before, National was in power, so the same levels of debt was a scandal. No more analysis required.

My suspicion is that it's a combination of several of the above factors. I can't say for certain which, or in what proportion, because I am not a mind reader.

However, I do know that Robertson is a person and that people are complicated. Reason and consistency are not the only things that drive us to our beliefs - let alone our public statements.

Which is to say that, while it is right and proper to laugh at Robertson's about-face, let's not lose sight of the fact that it's hardly the most surprising thing in the world.

For example, imagine that National had been in power between 1999 and 2008 and Labour from 2008 to 2017. Labour's critics would have excoriated it for its borrowing levels and struggles to get the budget back into surplus. They would have bragged about the surpluses

National ran before the great recession.

And Labour would have countered that this is to compare apples with oranges. They would say they had done extraordinarily, all things considered. After all, they've just had to contend with the global financial crisis, finance company collapses and the destruction of our second city in one of the most expensive natural disasters in human history.

Does this say anything about the decline of good faith in politics? I think it's more likely that this is how politics has always been. And always will be.