Treasury communication failure a missed chance

One of the most important government documents in four years has largely sunk without a trace. The four-yearly and mandatory review of long-term fiscal issues by Treasury has plenty of sound analysis and a welcome new focus on regional divergence.

But the document is a pure lead block of dense waffle. Poor communication sadly means that this important document will not have the impact it should.

The long-term fiscal report highlights the issues we know all too well.

Particularly around the issue of an ageing population, which will massively increase our health and superannuation costs, unless we make changes in

We have to have a conversation about a new, fairer way of raising tax revenue.

eligibility by age, wealth or some other mix. We have to have a conversation about entitlements and which promises can be kept, and which cannot.

The projections show that we will be spending increasing amounts on the elderly, but it will rely on either borrowing lots of money, or taxing a diminishing group of younger people.

We have to have a conversation about where our tax revenue comes from. Our current mix of heavily taxing labour and consumption unfairly misses the wealthy. We have to have a conversation about a new, fairer way of raising tax revenue. We cannot tax young workers of the future to pay for unfunded promises for lots of old folk.

The projections highlight the challenges of poverty traps. That a small group of vulnerable people will continue to need extensive help. We need to aim higher. The investment approach that is much talked about by this Government has the right ambition, but it needs early and significant investment now to lift people out of the poverty trap.

A welcome addition to the long-term look was regional development.

That regional economic and social performance is diverging across our regions is well known. But what to do about it much harder.

Regional development has come and gone from the public policy arena over the years. Each time with arguably limited success.

But lack of success does not mean we should not be aware of the widening gaps in economic opportunities across our regions.

These divergences were at least partly responsible for Brexit in the UK and Trump’s victory in the US. We do not want that kind economic vandalism in New Zealand because of policy neglect of the regions.

The long term projections should excite public conversation. We need to talk about ageing. We need to talk about poverty traps. We need to talk about what the Government should spend money on. We need to talk about how we raise money to fund the things we want government to do.

All of these are worthy, but successive Governments have not engaged and have not changed public policy. To make these changes, in today’s poll-driven politics, we need to appeal to the public.

We have to put the public back in public policy.

To do that, we need to engage the public better. That means good communication. Their ability to influence the economy through lower interest rates is diminishing, and they have to increasingly rely on how they talk and influence our expectations.

Convincing and clear communication is a glaring weakness of the latest report from the Treasury.

Yes, they should continue to work on the nerdy stuff. But the report was so unapproachable and full of waffle, the public will not even see it, let alone engage with it.

It’s time Treasury fixed their communication.

Shamubeel Eaqub is an economist and partner at Sense Partners, a boutique economic consultancy.