Land of the long dark cloud

Given she is a former head of the International Union of Socialist Youth it may be no surprise New Zealand’s new Labour prime minister Jacinda Ardern believes capitalism is a “blatant failure”. But she really needs to be sensible and stop sounding like her wacky British Labour counterpart, Jeremy Corbyn. Yes, New Zealand has a problem with homelessness. So, the OECD says, do Australia and a host of other leading economies, notably Canada, Germany, Sweden, Britain and France. But for Ms Ardern to use homelessness to try to litigate the broader argument that the nine highly successful years of “capitalism” in New Zealand under John Key’s and Bill English’s centre-right National Party governments were a “brazen failure” reflects poorly on her.

Like Kevin Rudd and Julia Gillard after the immensely successful Howard years, Ms Ardern, as she sets about governing with her disparate New Zealand First and Greens coalition colleagues, has much to be grateful for in the Key-English legacy. The sooner she recognises that, instead of trying to trash it, the better. Unfortunately, early signs are not promising. Indications are that like Mr Rudd and Ms Gillard she may be more focused on costly ideological interventions rather than good policy and good government.

For Australia no less than New Zealand, it will be a pity if that turns out to be the case. No country in recent times has been a better exemplar for us of sound, reforming government achieving economic success. It has won plaudits from global business leaders and economists for policies that have lifted the tide for all New Zealanders by creating sustained growth and jobs. In 2008, when the National Party came to power, New Zealand was 24th on the World Economic Forum’s Global Competitive Index, six places behind Australia. Today New Zealand is in 13th place, eight positions ahead of us.

As Nick Cater pointed out in The Weekend Australian, everything Wayne Swan claimed would not work in Australia during his ill-starred time as treasurer has worked magnificently in New Zealand, setting it up for a decade of investment and growth. Today the New Zealand budget is in surplus while Australia is deep in deficit. Ten years ago the New Zealand government’s gross debt stood at 25 per cent of GDP while Australia’s was 20 per cent. Today the positions are reversed. Australia’s net public debt is at 47 per cent while New Zealand’s, after hitting a peak of 41 per cent, has declined to 38.2 per cent.

Ms Ardern must build on this globally admired achievement by her predecessors, not squander it in the shameful way Mr Rudd and Ms Gillard did. Many will wonder about her priority in promising a referendum aimed at legalising marijuana, a sop to the Greens. There also will be questions about the new government’s keenness to make the first year of tertiary education free, increase student allowances and the minimum wage, build tens of thousands of affordable housing units and set a zero carbon emissions goal while it also cuts back severely on immigration and bans overseas real estate investors.

Ms Ardern must recognise that all her plans depend on maintaining a strong economy. Using clapped-out Corbynesque socialist rhetoric to deride “capitalism” does little to inspire confidence in her political maturity or her L-plated government’s prospects.