UTOPIA LAB

THE PROBLEM

Our fear of government debt is holding us back.

For more than 15 years, New Zealand households have carried more debt than they earn in income. Our total private debt — mostly in mortgages — is now one and a half times national income.

But when it comes to the government’s finances, pressure to balance the books is a handbrake on even modest public spending.

Until recently, the Labour government’s self-imposed budget rules required it to reduce the national debt to 20 per cent of GDP.