Cut your coat to fit your cloth

Should we budget based on our bank balance or our wish list?

There is an old saying : “Cut your coat to fit your cloth”. We should make our plans based on the resources we have, not what we wish we had. I had reason to reflect on that recently for personal reasons which I share below.

Government and local government budgets

The current New Zealand Government is capping its expenditure at 30% of GDP. It is also telling Councils to restrict spending to essential infrastructure . Many Councils have ageing infrastructure that they need to replace. On the other hand, some Councils keep increasing rates by 2-4 times the rate of inflation, putting a burden on households and businesses.

Have we forgotten how to budget?

My father grew up in the depression of the 1930s. His family were luckier than some. There wasn’t much building for his carpenter father but he found other work. They kept some livestock and they had a big house so they took in boarders. He died a few years ago. But I recently found a newspaper article about his time as Town Clerk of Levin. he was leaving to be Treasurer of Wellington City. The article mentions his work building a new public library, paid for by commercial leases. This is a short extract from that Chronicle article in 1973:

His approach to Council finances was that rates were for essential services. Reserves, libraries and other things needed to be funded by commercial income, bequests and other sources because ratepayers should not pay for luxuries. He went on to run Wellington’s finances for 13 years from 1973-1986 but I wasn’t a ratepayer back then so I never noticed the benefit of his approach.

Is it time to get back to basics?

As a consultant, I work on efficiency, value for money and ensuring projects deliver financial benefits or positive service outcomes. Keeping to budget is always important but it is equally important to treat the money being spent as if it is your own in the sense of asking if it is genuinely continuing to deliver value.

There is a real risk in large organisations, both public and private sector, that we lose sight of the fact that the purpose of organisations is to deliver value and that it is the responsibility of managers to always seek out better ways to do that.

It is a sobering thought as I read that article from 52 years ago that my Dad understood that concept of delivering value so well back then. He wouldn’t have had a PR person on staff to spin a story about it. He just told a reporter at the local paper what he thought was important and went on to his next job to apply the same philosophy there. RIP Dad.

Phil Guerin, Consultant/Director, Hague Consulting Ltd. © Hague Consulting Ltd 2025. If you like this content, subscribe to our blog – it’s free! Enquiries@hague.co.nz

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