John MacDonald: It's like getting a bank loan to pay the pocket money

Author: John MacDonald,
Publish Date: Wed, 2 Sep 2026, 12:33pm

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Nine billion dollars a year. $750 million a month. Or $24 million a day.

That’s how much interest we are currently paying on government debt. Just the interest.

But, despite that, the Government thinks it’s a good idea to borrow more money to cover the cost of the revenue it’s not going to get because of the fuel tax freeze.

The Transport Minister has confirmed that more money is going to have to be bow-wowed. Because the Government’s books are in deficit.

Chris Bishop says borrowing is the only way to do it, given the state of the country’s finances.

Which comes at a time when we are spending $9 billion a year just paying the interest on government debt.

It is nothing short of lunacy.

I’m not against governments borrowing money. But it has to be money for essential things like infrastructure.

If we have to, borrow money to build roads. If we have to, borrow money to build hospitals.

But don’t go borrowing money because you’ve decided, for whatever reason, to deny yourself revenue because of this political paranoia about taxation.

Politicians go on all the time about the Government having to run the books just like you and I run our household budgets.

So sticking with that analogy, what the Government’s doing with this plan to borrow money to pay for its decision to play politics with taxation is like someone getting a loan from the bank to pay for the kids’ pocket money.

The kids are happy but, because the money has to be paid back with interest, they struggle to pay the powerbill during winter.

Sounds nuts? That’s exactly what the Government is doing with its borrowing to pay for less tax revenue. It’s exactly what Labour did too.

Remembering that the long-term picture when it comes to government debt isn’t pretty. We’re heading for a situation in the next few decades where government debt will be 180 percent of GDP.

Yet, these politicians in Labour and National, claim to be the ones who know what it takes to run the economy. And they think more debt is the answer. Do me a favour.

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