Government spending is hard to imagine. Photo / Paul Estcourt
The dollar numbers that matter in this week's Budget are all in the billions.
Total Government spending is $95 billion. Welfare spending is $22 billion. The deficit is $10 billion.
A billion rolls off the tongue. Easy. But it never sinks in.
One billion dollars is impossible to get your head around. It's a number of dollars that we never concern ourselves with day-to-day.
The billions float past politicians and journalists as incomprehensible.
Spending scandals always involve a few thousand dollars, never a billion. These are the numbers we can understand. We can grasp taxi fares, flights and credit-card expenses.
We can't comprehend a billion dollars. It doesn't equate with our daily experience. We can't compute finance company bail-outs, ACC budget blow-outs, or government deficits. Blowing a billion doesn't rate a mention.
Parliamentary scrutiny focuses on the pennies and ignores the billion-dollar expenditure. Government department heads get quizzed about credit-card use and dinners out, never about why they should even exist or have a budget to begin with.
Our headlines and news focuses on politicians' laundry bills and their bottles of wine.
The $1.5b ACC funding shortfall hidden before the 2008 election was hardly big news. That money would keep Foreign Affairs Minister Murray McCully flying the world in comfort for the next 5000 years. The South Canterbury Finance bail-out would put him in orbit for another 5000.
The big money is always in the billions. And the big money is largely ignored.
I remember when I was an MP getting the estimated cost of big government reported. It was a huge cost. I was impressed the journalist had managed to explain the concept. But she wrote up the cost in the millions, not billions.
She said, "Yeah, I knew it was a lot. I was writing it up trying to remember, did he say millions or billions? I thought it must have been millions."
Turns out it didn't matter. No one noticed. A billion or a million. It's just a lot of money. To us a billion and a million are much the same.
I worked out back then that only stories involving hundreds or thousands of dollars were reported. They were the stories that we could easily grasp. The stories involving millions or billions of dollars didn't rate a mention. They don't fire the public imagination.
But I was interested what a billion dollars would look like. The Reserve Bank looked at me strangely when I asked how thick a wad of hundred dollar bills was. But it was clear that new MPs asked lots of dumb questions and this was just another dumb question by another dumb MP that was duly answered. It's a centimetre.
I sat down and figured out what a billion dollars looked like. The trick was in keeping all the noughts in order. The answer shocked me. I made it part of my speech whenever talking about government spending to general audiences or explaining to visiting school children what Parliament does.
That part of my speech always went well until I got a bunch of farmers.
"Imagine a $100 bill," I began. "Now imagine a wad of them from the bank wrapped up tight. There's a hundred of them. That's $10,000. Now imagine stacking wads of $100 bills one on top of another. $20,000, $30,000, that's Jonathan Hunt's taxi bill for a year." Everyone laughed.
"That's 3cm high."
"A hundred wads and you have a metre. That's a million dollars. A million dollars is a stack of $100 bills a metre high. So how high is a billion dollars?"
There was much scratching of heads and furrowed brows as the men tried to do the sum in their heads.
I triumphantly declared: "It's a kilometre!"
Government spending this year is $100 bills stacked 95km high. That's a lot of money.
The deficit is a stack of $100 bills packed tight and stacked 10km high.
Welfare spending is 22km.
At the end of my talk I said, "Now you know what a billion dollars looks like."
A grizzled old farmer put up his hand. He was still struggling. I asked how so?
"I'm still trying to imagine that $100 note."
Westpac's conduct affected a total of 24,621 customers.