Lifting of the long white cloud
THE weekend’s stunning election win across the Tasman for the centre-right government shows why the wave of New Zealanders shifting to Australia has become a trickle, and threatens to become a steady stream moving in the reverse direction.
New Zealand, said popular Prime Minister John Key during the campaign, is “on the cusp of something very special”.
Through a Saturday of driving rain in most of the country, and despite voting being voluntary, Kiwis gave their safe-hands National Party-dominated administration a bigger majority, for the third consecutive election.
Under Key and his canny Finance Minister Bill English — whom the Prime Minister lauded at the victory rally as “the best minister of finance in the developed world” — the party has stabilised the economy, restrained government spending, and delivered a budget surplus.
Last Thursday, it was announced that during the second quarter the economy grew 3.9 per cent on the same period in the previous year, the highest rate for a decade and comfortably ahead of Australia’s 3.1 per cent.
Last year, the net number of New Zealanders moving to Australia fell dramatically to 8500, compared with 31,200 the previous year.
A fortnight ago, the World Economic Forum’s new index of global competitiveness had Australia moving down a notch to 22nd while NZ rose one to 17th. The NZ unemployment rate fell to 5.6 per cent in the June quarter, while the most recent Australian figure is 6.1 per cent for August.
The top income tax rate is 33 per cent, compared with 45 per cent in Australia; the corporate rate 28 per cent against 30 per cent. The Fiscal Responsibility Act virtually requires parties, even the Greens, to seek surpluses. And English has vowed to set aside $455 million a year for the next three years for tax cuts starting in 2017.
Key, aged 53, grew up in Christchurch public housing with his mother, an Austrian Jewish immigrant who worked as a cleaner after his father died when Key was eight.
He was an investment banker who became a member of the foreign exchange committee of the US Federal Reserve, and worked in Singapore, London, Sydney and New York.
His competitor for prime minister was Labour leader David Cunliffe, a former diplomat and business consultant. Although he took over the party chiefly through union backing, he lost appeal.
The Greens, in formal alliance for some years with Labour, have male and female co-leaders. The female co-leader is Metiria Turei, and her male co-leader is Russel Norman, who came to NZ when he was aged 30 from Brisbane, where he was involved with the Socialist Workers’ Party, but has in recent years broadened the Greens’ policy base.
Cunliffe’s challenge following such a poor Labour performance — its lowest percentage vote since 1922 — is far greater. The party, says James, has driven itself down the cul-de-sac of identity politics, while its great National Party rival has more quietly and unselfconsciously developed an increasingly diverse caucus, with Maori, Pacific Islanders, a Korean, a Chinese, and two Indians among them.
The Nationals intend to reduce net debt to 20 per cent of GDP, further deregulate the labour market, reduce the barriers to development thrown up by the Resource Management Act, speed infrastructure development, boost the oil and minerals sectors, and improve irrigation for agriculture and horticulture.
Welfare reform will refocus the sector from a conventional “spending” approach to one based on “investment” in skills. Science and research programs will be at the forefront of boosting government investment to 0.8 per cent of GDP. And English intends to deploy a team to scrutinise, review and where needed re-draft legislation, following a 525 page Productivity Commission report.
A quiet program of change is gathering pace, with careful attention to minimise social pain.
The massive win at the weekend for the pragmatic Key means this program will continue largely uninterrupted through the new term and probably for a fourth.
The Abbott government will be watching NZ now with even more envy, wishing that, like Key’s team, it had no Senate to hamstring it.
http://www.theaustralian.com.au/news/features/long-white-cloud-is-lifting/story-e6frg6z6-1227065791604