January 20, 2006
Labour is engineering a recession in New Zealand
As if the worst business conﬁdence survey in 35 years wasn’t bad enough, Bloomberg reports that New Zealand’s ﬁnance minister, Michael Cullen, has been telling Japan to steer clear of the New Zealand dollar.
It’s another sign of a clueless administration.
A weaker dollar will help exporters, but considering the government hasn’t shown much sign of encouraging the sort of innovation that would spark exports, and the country is a net importer, then what does it expect?
Labour needs to make up its mind: New Zealand is either an exporting nation or an importing nation, but it can’t be both at the same time.
It’s acted as a net importer than enjoys having foreign money while people lounge about the Viaduct drinking lattès, the exception being the ﬁlm industry who drink chicken noodle soup from thermoses.
It was known to the government that these Japanese Uridashi bonds would mature this year, and it did nothing while the going was good to use that money for building up exports. It smells like the mess that got Gray Davis recalled in California: ignore the underlying problems when there’s money ﬂowing in.
There must have been some powerful stuff in those lattès, but then our Prime Minister was a bit more frank than President Clinton when he said, ‘I smoked, but I did not inhale.’
New Zealanders can expect the $2 per litre petrol price this year if all goes to “plan”—this must be Dr Cullen’s intention, because it is a natural and foreseeable consequence of his actions. And I am not even a forex expert. Just a bloke with a brain.
I tell the Japanese investors to play the eurodollar market and if they wish to ignore Dr Cullen, then they should. I would, but I live here.
I have frequently said the lack of vision on the part of Labour has sounded the nation’s economic death knell—and when there is a lack of vision, there can be no nation brand.
The PM is a heck of a nice lady who is far, far sweeter than her hardened image suggests. And I think she has placed her trust in the wrong people. If she does not realize that this year, then we are in for a rough ride.
I still argue that New Zealand, and the clever people we have here, are about innovation, independence and individuality—not a mere tourist playground for those conned by our environmental record. And sure we should export and have a weaker dollar, but who is exporting? I am, but who else? I once heard a statistic that only three per cent of ﬁrms here export—which I ﬁnd hard to believe.
Frankly, I don’t mind making a bit less if I know that my fellow New Zealanders are not having problems paying for their petrol and their mortgages.
However, when I deal with New Zealand Trade & Enterprise, I can’t work with the Wellington ofﬁce, in the city where I live—I actually have to deal with Auckland. Because Wellington doesn’t want us doing well or exporting. I guess they got some memorandum to say they must do the opposite of what they are charged to do.
The greatest successes in New Zealand have nothing to do with the government’s programmes as it rode the hype of Peter Jackson and his last four ﬁlms. It took one man and his love for New Zealand to tell people: (a) there is beauty here; (b) there are clever, innovative people here; and (c) you can be a geek and succeed. And funnily enough, Mr Jackson has detected a latent element in New Zealand that actually identiﬁed with this. This single-handedly changed the view of this nation—and reﬂects the foolhardiness of the government’s attempts at nation branding.
And now those major ﬁlms have come to an end. Two thousand six has a few ﬁlms, but nothing to the scale of The Lord of the Rings and King Kong.
Meanwhile, New Zealand’s state bodies charged with economic development and trade have instead been telling people: (a) this is the home of Anchor cows; (b) we chew the cud and browse; (c) we are clean, green, 100 per cent pure, just like Ireland, Sweden, Israel, Norway, and a good part of Canada. Come here if you like, but those other places are about the same.
I’m going to keep criticizing because this supposed ‘New Zealand, new thinking’ campaign has had no airing internally—and makes as much sense as South Korea’s 2001 ‘Visit Korea’ programme, which for the most part did not even get out of the country.
We need help—and we need a vision. Prime Minister, the ball is in your court. Read through the old ‘Bright Future’ programme that you cancelled, and please tell me what is wrong with it. And if there is nothing wrong with it (apart from the fact the opposition came up with it), do it. permalink
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Update: Ben Jones predicted the currency troubles in October 2005 at his blog. I take it that it’s not the same guy who played Cooter on The Dukes of Hazzard.
Update: a chap studying for his doctorate agrees with me.
As reported today, with some very bad news on the current account deﬁcit and a currency hitting US$0·615, this is playing out exactly as I predicted.Post a Comment
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