Robert MacCulluch: Beware National - Living Standards are stagnating. Fix the economy - or else.

Infometrics is forecasting that over the next two years, 2024 and 2025, total GDP will grow at around 2% per annum. Nearly that entire increase is being driven by immigration, which is also running at 2% per annum, meaning the standard of living of locals, as measured by average income of Kiwi households, is predicted to go nowhere over National's term in office. Meanwhile GDP per capita is surging in America. Folks like our Worst Finance Minister Ever, Grant Robertson, and Otago University epidemiologist-turned-economic-expert, Professor Michael Baker, who predicted our "elimination" of the virus would go hand-in-hand with economic success have been proved wrong.

Should Luxon screw up on economic reform, then his dream of being a successful CEO of NZ will go the same way as Ardern's dream of being NZ's Guardian Angel. National was elected to fix the economy and reduce living costs, first and foremost. It's catchphrase was "delivery". So Luxon must deliver on the aim of making NZ more prosperous.

One of the reasons Labour lost was because Ardern's focus was on non-economic issues. Her Commencement Speech at Harvard University never mentioned economics but instead waxed on about conversion therapy, gun control, gay marriage, abortion, trolls, responsible algorithms, disinformation lies, not to mention "unhygienic keyboard warriors dressed in poorly fitted superhero costumes”. It got laughs and nods of approval at Harvard, but we don't all receive income on an endowment of $NZ 100 billion, like its professors and students do. Meanwhile, back on the farm in NZ, people were taking a disliking to Ardern philosophizing about such matters & relentlessly assuming the moral high ground. Our minds were elsewhere - namely on trying to pay the bills.

The previous Labour government's weakness was the economy. Should the new coalition get bogged down, as Ardern did, on non-economic issues like the evils of Big Tobacco and its influence on our politics, and on race issues that the Nats now say they have no intention of delivering upon, without fixing the economy, it will be in trouble. The previous lot were so awful that this new coalition better succeed, as over half the population are wanting it to, even though many judges, academics, mainstream media journalists and Wellington bureaucrats, who have become dismissive of democracy, are wanting it to fail.

Professor Robert MacCulloch holds the Matthew S. Abel Chair of Macroeconomics at Auckland University. He has previously worked at the Reserve Bank, Oxford University, and the London School of Economics. He runs the blog Down to Earth Kiwi from where this article was sourced.