Big Government – more debt, and bad news for everyone

Big Government is Back, according to a recent article in the Financial Times. The FT says “most Western countries are spending heavily on welfare and the “green transition”, and with debt levels already sky high, then taxes are certain to rise significantly.” This is bad news for everyone, especially families which are already stretched.

The term “Big Government” describes a bloated government that is too large, wasteful, and intrusive (sound familiar?). According to Collins Dictionary: Big Government is characterised by high taxation and public spending, and centralisation of political power.

Ultimately, Big Government tends to be inefficient, fiscally reckless, and stifles individual liberties. Liberal elites tend to favour Big Government, wrongly believing that society can only be improved through large-scale government intervention, such as social welfare programs, regulation of business, and climate change action.

Despite the increased social welfare programs which help some, the inevitable increased taxation inflicts pain on the majority.

This should sound all too familiar to Kiwis, as we struggle through a cost of living crisis, increased mortgage interest rates, and crippling national debt. The challenges ahead are daunting.

NZ Treasury has this year warned that Government spending has blown out by an average of $600 million per year. This huge spending spree has caused debt to blow out from $5 billion in 2019 to a massive $104 billion in the most recent PREFU (Pre-election Economic and Fiscal Update).

The size of our public sector has also ballooned. Data released by The Public Service Commission shows that the total number of public servants is now 62,710 people (as of March 2023). This is a 33 per cent increase since Labour came into office. Across the public sector, annual reports show there are about 33% more managers and 40% more clerical and administrative personnel. While the number of bureaucrats continues to increase in Wellington, spending on consultants also grew to an eye watering $1.7 billion in 2022.

Despite these massive increases in government spending and public sector staffing, we’re not seeing improved public services, especially in key sectors – health, education, infrastructure, crime prevention. Big Government has never been the solution, and never will be.

The alternative to Big Government is certainly not some anorexic public sector where public services are stripped away. It’s simply about priorities, and where the resources are directed. Governments should be “staying in their lane” and focusing on the services which really matter – the aforementioned health, education, infrastructure, crime prevention services.

To summarise, here are some of the most common problems associated with Big Government:

Bureaucracy and Inefficiency: Large government entities become bureaucratic, leading to slow decision-making. Layers of administration and red tape can hinder the government’s ability to respond quickly and effectively to changing circumstances.

High cost = High Taxes: Big Government is expensive and inefficient, ultimately leading to higher taxes for individuals and businesses.

Waste Spending on unnecessary programs that do not deliver outcomes.

Increased Debt: The expansion of government programs and services can contribute to budget deficits and a growing national debt. High levels of debt can have long-term economic consequences and limit the government’s ability to respond to future crises.

Erosion of Individual Freedom: Expansive government may infringe on individual liberties and personal freedoms. Excessive regulations and government intervention in personal and economic affairs become the norm under Big Government. The New Zealand government’s “No Jab, No Job” mandates, and problematic Hate Speech Laws are just two examples of erosion to personal freedom.

Lack of Accountability: Large bureaucracies can be less accountable and more difficult to monitor, potentially leading to corruption or misuse of power. Lack of accountability can also result in wasteful spending and poor decision-making.

Disruption to Markets: Some critics believe that Big Government can distort markets by favouring certain industries or players through regulations, subsidies, or other interventions. This can hinder fair competition.

Lack of Innovation: A large and bureaucratic government can stifle innovation, whereas a more limited state fosters competitiveness, innovation and economic growth.

Centralised Approach: Big Government tends to adopt a centralised one-size-fits-all approach, which may not be suitable for the diverse needs of the population. Localised or individualised solutions may be more effective in addressing specific challenges.

Balancing the need for effective governance with the preservation of individual freedoms and efficient resource allocation is a complex challenge, but Big Government is not the solution. Hopefully the recent change of government in New Zealand will now see a reduction in the size and scope of public sector bureaucracy.

**Note – This post was written by Family First staff writers.