Mike's Minute: The economic chickens have come home to roost

As the economy sinks, the Government sinks with it. What a shocking week. We have officially been in recession. Don’t let them con you into the “technical recession" line. A recession is a recession and going backwards is going backwards. I have no reason to believe that in the past three months of April, May and now June things have changed. And I have no reason to believe the Reserve Bank is wrong when they forecast a recession, which, in this case, might prove to be a double dip recession in the latter part of this year. If that didn't smack you in the face with a dose of fiscal reality, about the Auditor General's report into the Covid reset of the Provincial Growth Fund, a programme devoid of any rigour and any checks as to where the money was going, what sort of jobs it was creating and whether or not it was a massive waste of money. Or you could look at the International Monetary Fund's advice to the Government over our current account deficit, which is in dangerous territory. "We are living beyond our means". That's their words, not mine. The expansionary budget, which is flash talk for spending money when you don’t have it, is to blame. Our dealings with the world are in shocking shape. We owe a fortune and, if they call it in, we can't pay it. That brings us to the ratings agencies, who are ringing the same alarm bells. Our debt is too high and the cost of the debt is growing. Banks are badly exposed to housing and, if things turn pear-shaped, our rating will be downgraded, which means we pay even more on our debt servicing. And we can't pay it now. These are all real, tangible, indisputable things that are a direct result of economic ineptitude. When the Finance Minister says we are well placed to deal with them, he is wrong and I suspect, deep down, he knows he is wrong. But in election year, what else can you say? When history shows you governments lose elections as a result of calamitous economic management, what else can you say? Some of us have been warning of what's unfolded this week for quite a while now. Some will just be becoming aware of how dangerous the territory is that we are now in. Some, the Government will pray, haven't quite joined the dots yet. But when the whole world, whether through the IMF or ratings agencies, are all yelling fire - it might just be time we all finally paid attention.See omnystudio.com/listener for privacy information.