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The damaged CTV building - Source: Getty -
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The political ground was always going to move after the Christchurch earthquake, and on Sunday we saw the first rumblings, with the Prime Minister unable to rule out TVNZ's Guyon Espiner's suggestion of a "zero Budget" this year, on TV ONE's Q+A .
The earth moved further yesterday, when John Key confirmed his hints, saying there would be no "new money" - or very little - in the May Budget for almost all government services.
The $600-800 million needed to boost health and education, he said, would come from cuts to other parts of the public purse. And to cap it off, 120-odd Christchurch businessmen broke through the cordon encircling Christchurch's CBD, fed up with their inability to get access to their own buildings, and the stock, equipment and paperwork inside.
Until now, grief and decency has kept a thorough public debate at bay, but with Friday's memorial service behind us folk have felt more able to ask the big questions and express their disquiet.
This political earthquake has only just started its early tremors, but it undoubtedly has the potential to bring down any political party that doesn't show it due respect. And in the past few days a few cracks have appeared in National's façade.
Key's admission that the Budget would be "really where the government's response will come" came because he was forced to address the political and economic pickle his government is in due to its decision to extend borrowing to help pay for the earthquake rebuild.
Borrowing has been anathema to this government; debt was the $250m a week bogeyman it has been using for many months to justify its cautious response to the foot-dragging recession that New Zealand is enduring.
Indeed, earlier in the year Key himself had said such continued borrowing was "unaffordable" and "holding the economy back". So when the government announced last week that it would borrow more to pay for the rebuild, the critical question became why it was unaffordable then, but is affordable now.
Key admitted it still isn't affordable, just that the government doesn't have any other choice - a difficult argument to maintain when you've ruled out increased taxes or a new levy on what seems increasingly like ideological grounds.
Key and his money man Bill English are right to say that borrowing is an orthodox and proper way to help pay for a one-off cost, such as putting a ruined city back together. But more than one source of income will be needed, and this is where the government risks getting itself in a muddle.
Essentially, to raise money a government can borrow more, tax more or spend less. No-one is likely to argue against extended borrowing as part of the mix.
The problem for the government is that is has, for its own political purposes, sold the story that borrowing a single dollar more would damn the country to an economic Hades. Now it has to walk into hell insisting that she'll be right, mate. It's a bit like Ken Ring and his missing major earthquake. When you predict a disaster that doesn't occur, you look foolish.
Ring is left to answer why we didn't get an earthquake "for the history books" on Sunday, while National has the job of explaining why borrowing for welfare, tax credits or education would have been disastrous, but borrowing for Christchurch is ok.
Key says more tax - even a one-off levy- is out of the question because it would suck money from the economy. But at the same time he's talking about cutting Working for Families and other government spending, also, er, sucking money from the economy. Which makes the reluctance to levy a population willing, even eager, to chip in for our southern brethren, look like ideology overcoming common-sense.
In the same interview Key also said "there's no single either
asset you could sell or expenditure that you could cut which would
be great enough to actually fund the type of impact that the
Christchurch is having on the books."
Yet moments later he's saying that the government's response will
come via a cut to expenditure.
If you're getting confused, you're surely not alone. The government seems to want to borrow without increasing debt and cut spending without taking money out of the economy. But tough choices are going to have to be made, and the political cost paid.
The question is how the public will respond to the government's
choices. Do we really prefer a cut in government services to a
one-off levy, for example?
As Key said yesterday, the public will get to see what the
government chooses come Budget day and "in the end, they'll judge
us on that".
Yep, the election is just nine months away, and the shaking is only beginning.
