The Irony of Post-GFC New Zealand

The irony of post-GFC New Zealand is that a Keynesian fiscal stimulus characterised by enormous levels of deficit spending and infrastructure spending has driven a reduction in unemployment in the context of a low interest rate world that has not triggered that much inflation outside of clearly politically highly-regulated areas like housing, education and healthcare.

Despite the media focus on inequality, that’s not really connecting with many “average New Zealanders” because an awful lot of them have made some quite tidy capital gains on their houses and are doing alright as evidenced by retail spending and record high new auto sales.

Plummeting per-capita GDP growth and abysmal overall productivity rates that simply attract rationalisations and “smoke and mirrors” style explanations should be the perfect opportunity for a Loyal Opposition to hold a government to account.

Labour has failed totally to achieve anything concrete in its years in opposition whilst simultaneously drifting further and further away from things that the “average New Zealander” or “median voter” cares about.

I wouldn’t be surprised if a 5th term is on the cards for National, let alone an almost assured victory next year for John Key, a reflection on his sensible approach to government and perhaps greatest example of incrementalism in New Zealand history.

Having spent a bit of time this year interacting with people outside of my Wellington bubble, it’s clear that John Key will be able to deftly defuse any attempt to reclaim the centre. There is no credible alternative government and it’s debatable whether any of the populist style reaction observed in Britain with Brexit and the United States with the election of Donald Trump will water down his ability to form a government.

I’m skeptical that NZ First will expand its share of the party vote much more – Winston Peters may be kingmaker indeed but I wouldn’t be surprised if National starts releasing policy that cuts into his traditional market! Interesting times in New Zealand for sure, focus on family and friends and stop buying into the idea that politics will be able to solve anything anytime soon when so many young people don’t even bother to vote.

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