Country in waiting — ah, feel the peace
The longer this political interregnum goes on the less I can remember what all the preelection fuss was about. I recall there was excitement. There were debates where the words and body language of the National and Labour leaders seemed to carry much weight.
But it has all faded so quickly, like the dramatic tension in a TV show when they split the final episode into two parts.
You know you ought to care but it’s hard enough to remember the main characters, let alone all the intricate plot twists that seemed so important at the time.
The only thing I can remember is that the little guy with the big hair and charming smile makes comical remarks to keep the whole thing entertaining.
But New Zealand politics is no Game of Thrones and Winston Peters isn’t especially short.
Meanwhile, the New Zealand dollar is holding up well, the stock market is hitting record highs, interest rates are steady and Auckland house prices seem to be slowly resolving themselves.
And after the initial rush of speculative fervour and outrage at the degree of control the electorate has once again thrown to Peters, a kind quiet resignation seems to have settled on the country.
The vacuum appeals to the hardcore libertarian in me. (Or anarchist, if left-wing readers prefer.)
It would be an interesting experiment to see how long it would take before the lack of an elected Government impacted on the economy.
In Germany, as people kept reminding me when I was having a panic attack the Monday after our election, they may take months to form their new Government.
In the Netherlands, coalition talks are still going on. And their general election was held on March 15.
Apparently they are close to a deal but it is expected that they’ll go past October 9 and break their 1977 record of 208 days without a Government.
That will still be a long way short of the epic Belgian coalition talks of 2010-11, which saw the country go 540 days from a general election on June 13, 2010, to the announcement of a Government on December 5, 2011.
It looks like we’ll only get about three weeks respite.
That’s not enough time to test the economy but long enough for some sort of short festival — with cheery light shows and special cakes.
Given it would only be triennial we should also consider getting a long weekend out of it.
The point is we need to enjoy it while it lasts because the craziness will be back with a vengeance.
The Germans, Dutch and Belgians may take months but at the end of the process they can be sure of getting a parliament comprised of earnest Germans, Dutch and Belgians.
We can be sure of only one man. And as much as I’d like another few weeks of political dead air I have my doubts about how long New Zealanders could cope.
We’re a small country, vulnerable to external shocks. Also, the difference between a good New Zealand economy and a bad one is often something of a confidence trick.
The trick is: if we think we’re doing well, we spend and invest like we are doing well and that is why we are doing well.
That’s why the Reserve Bank takes business and consumer confidence surveys seriously.
Right now consumer confidence is holding up at three-year highs — despite a slowdown in the housing market.
ANZ’s Consumer Confidence survey showed Kiwis are feeling pretty good about the prospects for taking an overseas holiday or buying a new TV. Optimism about the economy a year from now was on the rise.
This is data that probably helps explain National’s strong showing on election night.
But ANZ economists sound a note of caution. History suggests the softer housing market should have caused more turbulence to confidence, they say.
Perhaps the wealth effect from the long housing boom has created more of a buffer than in the past.
But business confidence has been a bit shakier and that’s where political uncertainty would eventually take its toll.
If business loses confidence in the economic outlook it stops investing. Jobs are cut, wage rises diminished, work for contractors and freelancers starts to dry up and this quickly flows through the economy.
Overall business confidence is still relatively solid in the ANZ September survey.
But the number of firms looking to lift investment has fallen, employment intentions dropped and profit expectations fell. In the building sector, residential and commercial construction intentions both fell.
ANZ economists put some of that fall to traditional pre-election jitters. On that basis it would be pretty hair-raising to see New Zealand’s election uncertainty roll on for hundreds of days.
Whether the new Government is to the left or the right, expectations are high it will deliver added stimulus to the economy.
Business will also be looking for certainty around tax, immigration and housing.
But most importantly the new Government will need arrive with a credible story to ensure business and consumer confidence stay strong.
In the short term at least, it is a reassuring narrative New Zealanders will be looking for to keep the economy rolling.
Meanwhile, the New Zealand dollar is holding up well, the stock market is hitting record highs, interest rates are steady and Auckland house prices seem to be slowly resolving.