The Lotto dream is over

Now that the big lotto prize has been won, life for ordinary New Zealanders can return to normal. The dream is over. All but two people didn't get anything significant out of the $36 million dollar bonus ball jackpot on Saturday night.

There is nothing wrong with dreaming. I had a ticket, and I had worked out pretty much how I was going to spend it. Pay off debts, find a project to do some seriously good in the world (perhaps $10m for that), and a bit of self indulgence - a decent feed of whitebait, and some overseas travel, and put the rest aside for retirement.

Of course there's nothing wrong with dreaming. After all someone had to win this jackpot and it could have been you.

But this is the new week and the reality of our situation is still with us.  Changing our fortunes, personally or as a country, was never going to come about from the remote chance of a big win. I wish the two big winners every happiness, but for all the rest of us, the dream is over, and we now need to deal with what is in front of us.

What is that you ask? As a a country, it's a bit bleak: a huge and expensive recovery job in Christchurch; more borrowing and more overseas debt, and lenders just a bit more cautious and wary than before. There are hard decisions about spending coming in next month's budget. A lot more people are going to get a lot less than what they think they deserve or need, and less than they would have got but for the earthquakes.

The price of oil is sky high, and once stable countries like Greece, Portugal and Ireland - even the UK - are being torn apart by controversy about how to deal with their debt crises.

All four countries like Iceland before them and perhaps with Spain to come, have spent beyond their means, borrowed to make up the difference, have let their economies grow uncompetitive and their non productive sectors grow too big, and their normal lenders have run out of willingness to lend.

What keeps me awake at night is the prospect that this may happen to New Zealand. Implausible?  Not really. Suppose commodity prices for things like milk, now high and great for our farmers, were to fall sharply. Incomes would fall, the government tax take would drop, and we'd end up not being able to service our debts without massive cuts in government spending.

The public would revolt, and lenders would become even more frightened. And then it would be plughole time. Catastrophe and misery all round. So now is the time to put away the dream that a big windfall will somehow come about and rescue us without any real effort on our part. It didn't happen on Saturday, and it won't happen to the New Zealand economy either.