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Elizabeth Kerr talks Budget values ahead of this Thursday’s announcement

Elizabeth Kerr talks Budget values ahead of this Thursday’s announcement

By Elizabeth Kerr

This Thursday is ‘Budget day’ and I’ll be sporting my most tantalising pony-tail (that joke will never get old) down at Parliament with other “media” for the early sneaky-peek at what cheques Key and his team intend to write this year.  

Journalists, economists and financial analysts are locked away together from 10.30, under embargo conditions, which basically means we perform a secret handshake, read the document and promise not to tell anyone anything until the veil of secrecy is lifted at 2pm, which coincides with English delivering the details in his speech.  

Ok, you got me, there is no secret handshake but writing that made it sound way cooler!!! There is also no Wifi, no cellphones are allowed and we are even escorted to the bathroom. Perish the thought I happen to smuggle a wadding great A4 copy between my legs on my way to the toilet. And who would I give it to? – all the journalists worth talking too are supposedly stuck in a room together competing to see who can identify an angle to write about that no one has spotted. As a mum of two busy boys; being in a lock-down without Peppa Pig and Elmo sounds’ bloody awesome!!! Bring it on!!!

The purpose of embargo is actually quite ingenuous. The theory is if we are all reading it at the same time, and no one can send out a press release until 2pm, then no one is going to cut any corners interpreting the information because of pressure to get the scoop over the competition. It’s like being in a race where we all cross the start and finish lines at the same time.

If ever there is an exam for journalists…. this is it. But seeing as I'm not one I'll leave the big words to them and just tell you how I see it, what this could mean for your Money Machine (and what everyone secretly talks about in the “lock-up”).

Inspired by this weeks’ event, today’s column is a story about the values of budgeting.

Once upon a time…..

… when I was young and financially ignorant a colleague and I were shopping at lunch time. She was a highly paid consultant and I was very much …not! Both admiring the (first generation) iPhone my response was “It’s too expensive for me”…. And she said “I can’t afford it”.

At $1200 it was the equivalent of half my month's wages; but for her, well I was all like “WHAYAT!!?? What do you mean you can’t afford it, you earn like a gazillion dollars?”

Of course I didn’t say that out loud, back then I was like everyone else – talking about money was akin to social suicide. “Don’t worry, it won’t take off – the Nokia has everything you could need” might have escaped my mouth.

But she wasn’t saying “I can’t buy it” she was saying “I can’t afford it” and that is totally different.  

Buying vs. Owning

These days it is rare that one can’t physically make an over the counter purchase because there are a variety of credit cards, finance options, and overdrafts to use in lieu of your own money. Patience has totally gone out the window – no one even lay-bys anymore.  (For those too young to remember lay-bys, it’s when you decide you want something and pays it off over time. But the store keeps the goods until you have paid them off). 

People tend to purchase the other way around nowadays. Firstly they decide they want something, they buy it using a finance facility (credit cards, loans, store credit etc..) and then commit to paying it off after they have the goods at home. The thing is that hedonic adaptation usually means we are bored of the item before we have paid it off and tend to go hunting for the next happiness purchase right away.

So, back to my colleague. She could have bought the phone if she wanted to, she probably had credit cards or overdrafts which would have facilitated the purchase if her enormous salary couldn’t cover it. But still she said “I can’t afford it”. What does that mean?

Spending choices = Personal Values

A budget is an attempt to align our spending choices with our personal values. What she was really saying is “I am choosing not to spend my money on this phone”. She could have physically bought the phone but she wanted to honour her financial goals more.   At that time in her life spending $1200 on a phone was not going to help her Money Machine.

Was it hard to say “No” to buying it?  Maybe…. Sometimes it is hard to say no to something we really like, but I truly believe that what you focus on becomes bigger. What that means is that if you walk around focused on what you can’t have you will quickly become dissatisfied with what you do have. But if you focus on the progress, no matter how slowly it goes, and of the benefits of your money machine, then you will find that becomes much more important to you.

Depravation is NOT failure!

People rarely say out loud “I can’t afford it”. You might feel like a failure to admit that you might not have enough money to buy yourself everything that you really like. But that is simply just not true. Going without is not failure… it merely opens up a void for the things that you really want.  

Life is about choices and you just can’t have it all because you will always be tempted by beautiful, useful things. It is a neverending wish-list out there in the big wide world.  

Not spending money on that phone kept my friend's money available for financial successes that she did want. It might have only been a small decision in the scheme of things but that is where people become unstuck… because it’s the small decisions that add up over time.

Pot calling the Kettle black

So this week as we watch earnestly to see how the Government is going to budget this year – let us remember that a budget is our best attempt to align our spending with our values. Before you throw stones at Key and his team firstly ask yourself if your personal budget and recent spending decisions are 100% aligned to your values. See, it’s hard isn’t it?!

As always I like to hear your thoughts and so if there is something particular you’d like to know about from the pomp and ceremony of Budget Day please email me at

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Did you see that Kath and Kim episode where Kim had a ponytail and a male horse mistook her for a the rear of an enticing female horse.... Haha.

ha ha ha I do remember that episode.

Rest assured mine is well and truly stuck to my head... it has to be... one never knows when it might be tugged these days lol

I thought it was a DonKey, not a horse?

I've been on a good salary but I have never been able to afford Sky TV. Ironically the first thing they put up on some new Council flats that were built in Wellington were.... Sky TV aerials!!!!
One interesting side effect of not having Sky TV is that I have lost all interest in watching Rugby..... Permanently.

Soon Sky TV will be dead, and the other-people's-budgets police will have to find something else to be judgypants about.

'Budget Police" i like that title. Has a TVone-at-7.30pm kinda ring to it....

Who's keen.....? .

People would watch the hell out of that. Send a couple of lemon-lipped busybodies with a camera crew to knock on people's doors, rummage through the pantry, and shake their heads sadly if they find non-generic tomatoes, and then have them back down when the householder triumphantly produces the receipt to show that they bulk-bought those decadent Watties with Indian Spices while they were on sale for 99c.

Just like to say that Kakapo's comment made me do a LOL.

Me too :)

Freeview TV is also delivered via the "Sky" Aerial

That's when I stopped bothering with TV. Didn't have any reception, but access wasn't worth the hassle of getting Saturn or Sky. That was in about 2002.

Budgeting is spending wisely within one's means and also planning for the future financial viability to effect a happy future and retirement.

When we as a Nation have never achieved that goal, because of our leaders, surely there is a punchline to be made..on Budget Day.

I for one am aghast that funding for new flag funding comes before funding for Relationships Aotearoa Services. Even though i am right-handed i can still see the lunacy in those budgeting values.

4 million dollars to hold a meeting to talk about a Flag, to which no one turned up...sheer seen on Free-view TV.

Free to air. That is. Not 800bucks of SKY endless repeats and other waste of my time channels..

4 Million for a meeting??

Agreed. Apart from recent homebuyers, the most stark example of this are Councils. Who now issue bonds. Because they can. Because the borrowing costs are cheap. Currently cheap.......

Thinking of budgets makes me also think about all the talk about poverty in NZ How is poverty measured say in first world as opposed to the third world ? The greens would have up believe that giving a pot of money to newborn kids will lift them out of poverty , yet failed to show how it will impact the nation's budget..or how it will be funded?

I always say "I can't afford it" but I am the one driving around in an old Toyota while my friends drive new European's SUV's. Surprisingly I could buy both of their cars outright (they have huge loans) and afford to fix them when their eye wateringly expensive engines fail... For me the sound of water leaking into a tin bucket though our old roof in the North, no food in the cupboard and one thin cotton dress in the middle of winter to wear - although it was years ago now (when I was a child) is enough to remind me exactly poverty is and I have absolutely no wish to revisit it. I've been driven all my life to lift myself up, not be beholden to anyone and to buy only what I need, not what I want. These are the values I have instilled into my teenage children (although they have never experienced any hardship) and they are also happily living by these. It appears to me that most budgets of the people I know rest solely with the bank and how much more they can borrow against their over-inflated property for their new boat, car, renovation, international holiday, etc... One wonders where it will all end?

Katapo above said that we shouldn't knock other spending decisions. OK. So we will watch them come a cropper sooner or later. Those second hand SUVs you mention will be going cheap...
Note: The Council flats I was talking about housed people on the benefit, so our tax money was going on their Sky TV. This was before freeview came along. So it was Sky TV.

Are these the same ones that are being forced to pay extra for broadband when all they really want is a landline?

Weka, Agree entirely. What are some of the ways you instilled those values into your children? I bet there are parents reading these comments wondering how to reign in their own childrens' entitlement?

For me personally it's been about sitting down with them (from when they are young) and sharing my own experiences of growing up with very little. They have never had the newest, flashiest anything and if they want something they have always had to work and save for it. By the time they have got to saving the amount they need for the latest pair of Nike's - they recognise the effort/amount of time they have had to put in to reach their goal and subsequently don't even want them any more and put the money into something essential they actually really do need.. Both have had minimum wage holiday jobs and I've had the usual teenager gripes - too early, too hard, too long hours, etc. Mum gets tough and they are basically told to "get on with it" and not give up as nothing in life is easy without hard work and besides there will be no $ parental hand-outs, which has been incentive enough. They were actually surprised to get satisfaction out of working hard and ensuring they do well to get outstanding references to help them obtain a higher paying/more responsibility roles. They have painted fences, weeded gardens, cleaned houses, stacked shelves, mowed and babysat from 14, my oldest son was offered two apprenticeships from holiday jobs which he absolutely excelled in - but graciously refused them and is attending his second year of Uni. I'm not sure if this approach will work for others or if I just got lucky, but neither of them appear entitled - just genuinely grateful for any opportunities they are given and happy to anyone if they are able to.

P.S We don't need a new flag and if public opinion is anything to go by - we don't want one either so why do we seem to be getting one thrust upon us?

I agree- What makes it worse is I can guarantee that all the proposed flag alternatives will be Naff

It takes a very brave and wise person to retract on a path of action. I think Key would go far in redeeming himself if he did. It reminds me of how people throw money into a bad investment and even though all the signs of loosing are present, they just can't bring themselves to withdrawal.

(Maybe the Flag is his last hurrah and deep down inside he knows it?)

And every previously bought and paid for Flag will have to be made obsolete, to create a market for a New Flag, A Nationalistic Flag....Probably made in China.

How dumb is that.

Distraction is the name of the game. I believe. Something to Smile and Wave over...
Something to distract us from reality.

Anything to get us from talking about Houses, the Labour Market, The true State of the Nation, The shocking state of the world, the savior of all savers, the floods, the flooded markets, the Banks, the abysmal weather patterns,The Islamic State, in fact all the true state of the World, in peril. Bankrupt and in decline, but the party goes on for some..

In debt too....I think it is called a deficit, so distractions help...who?.

Which Party, the one we all know and love. They need something to smile and wave over the heads of the serfs. A new flag is just about as much use as our figure head. Smile and Wave ye simple bastards.

But what do I know...I just call it like I see it.

the savior of all savers??

... I'd like to see a new Kiwi flag ( MIC ... made in China ) with a large image of the Auckland Sky Tower dead centre , and Martin Jetpacks strapped around the base of it , stuck on with No. 8 wire ... ...

And if the housing bubble ever pops ... easy peasy .... just fly the flag upside down !

Or just 'YOUR AD HERE' call 0800FIRESALE in big block letters.