But will it be ready to cope with economic headache?
If current polling trends work out on October 14, what sort of government might NZ electors land themselves with?
Take, for example, the latest Newshub-Reid poll which has National on 40.9% and ACT on 10.1%. If that is the measure of support on election day, the Right-of-Centre parties would have a clear majority, and the formation of a coalition government might be relatively straightforward.
Uncertainty about the outcome hovers over the prospect that NZ First will breach the 5% level so that Winston Peters reappears, probably to the chagrin in particular of ACT and its leader, David Seymour.
National, in contrast, might find it useful to keep Peters onside and even offer him a ministerial role: Foreign Affairs, for example, where he would be out of the domestic spotlight. That would follow the example of John Key who – after the 2008 election – governed with the ACT, United Future and Maori Parties, not all of which he needed for the numbers to govern.
Whatever the composition of a government led by Christopher Luxon, he is likely to be eager to put its stamp quickly on the regime, particularly as the economy he will inherit is in poor shape after the profligacy of the outgoing administration. Luxon will have the advantage, if he wants to use it, of being able to call on not only John Key and Bill English but other onetime ministers like Stephen Joyce for specialist advice—though the areas where he might need it most are in dealing with Winston Peters.
Nicola Willis, of course, will be invaluable because of her previous experience working as an adviser with Key and English, and she will be fully engaged in reconstructing the economy.
It won’t be easy: one has only to look at the size of the fiscal deficit and the pressures in NZ’s external trade. This week the Pre-election Economic and Fiscal Update starkly spelled out what frugal times lie in store for NZ. The PREFU has revealed that Labour’s budget doesn’t include enough funding to maintain real per-capita spending in areas like health and law and order.
Labour’s operating allowance isn’t high enough to take into account the impacts of inflation and population growth. Using Consumer Price Index forecasts, the government needs to dip in for $882m in contingencies just to keep the health system going in 2023/24, while in order to maintain health and law and order in 2024/25 they’ll be pinching $1.4bn from contingencies.
There is little doubt, too, that the incoming Prime Minister will have to wrestle with difficult foreign policy and trade issues, given that NZ has become heavily dependent on Chinese markets. Those markets have turned sour as China itself has failed to bounce out from a protracted period of Covid-induced austerity.
Point of Order is a blog focused on politics and the economy run by veteran newspaper reporters Bob Edlin and Ian Templeton
National, in contrast, might find it useful to keep Peters onside and even offer him a ministerial role: Foreign Affairs, for example, where he would be out of the domestic spotlight. That would follow the example of John Key who – after the 2008 election – governed with the ACT, United Future and Maori Parties, not all of which he needed for the numbers to govern.
Whatever the composition of a government led by Christopher Luxon, he is likely to be eager to put its stamp quickly on the regime, particularly as the economy he will inherit is in poor shape after the profligacy of the outgoing administration. Luxon will have the advantage, if he wants to use it, of being able to call on not only John Key and Bill English but other onetime ministers like Stephen Joyce for specialist advice—though the areas where he might need it most are in dealing with Winston Peters.
Nicola Willis, of course, will be invaluable because of her previous experience working as an adviser with Key and English, and she will be fully engaged in reconstructing the economy.
It won’t be easy: one has only to look at the size of the fiscal deficit and the pressures in NZ’s external trade. This week the Pre-election Economic and Fiscal Update starkly spelled out what frugal times lie in store for NZ. The PREFU has revealed that Labour’s budget doesn’t include enough funding to maintain real per-capita spending in areas like health and law and order.
Labour’s operating allowance isn’t high enough to take into account the impacts of inflation and population growth. Using Consumer Price Index forecasts, the government needs to dip in for $882m in contingencies just to keep the health system going in 2023/24, while in order to maintain health and law and order in 2024/25 they’ll be pinching $1.4bn from contingencies.
There is little doubt, too, that the incoming Prime Minister will have to wrestle with difficult foreign policy and trade issues, given that NZ has become heavily dependent on Chinese markets. Those markets have turned sour as China itself has failed to bounce out from a protracted period of Covid-induced austerity.
Point of Order is a blog focused on politics and the economy run by veteran newspaper reporters Bob Edlin and Ian Templeton
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