Editorial

Whoever becomes Prime Minister this month – or next month, depending on the vagaries of MMP’s mechanics and potential negotiations – will inherit an economy with statistics that would be the envy of many world leaders. New Zealand is in a much better and more stable position than at the height of the global financial crisis, when finance companies were toppling and alarmists were suggesting – with barely suppressed glee – that we were witnessing the death throes of capitalism. As is so often the way, its demise was greatly exaggerated.

Job growth and wages are now increasing in a country that has enjoyed some of the best GDP and employment growth in the Western world in the past five years. Unemployment and inflation have held steady at low levels, at least by historical standards. Interest rates are close to a 50-year low, meaning a family with a $300,000 mortgage are now paying about $300 a week less in interest than a decade ago. And, importantly, with the economy back in surplus, our political parties can make spending promises to address the concerns over housing, health and education that are rightly a focus.

It can seem an impossible task, however, to assess the best policies to deal with difficult social and economic issues. The Financial Times is fond, at election time, of quoting US journalist and cultural critic HL Mencken: “For every complex problem there is an answer that is clear, simple and wrong.”

And yet, even before a vote is cast, one of the great advantages of a close race such as we are seeing is that the parties themselves quickly focus on solutions to those complex problems. They have already come close, for example, to agreeing on a target to lift children out of poverty. That alone is a victory for democracy.

But sometimes what counts most is not the difference between the two sides’ policies in the lead-up to an election, but their approach once in Government as things come up issue by issue. That’s where, New Zealanders presume, National’s instinct is more on the side of free enterprise and personal responsibility and Labour’s is on organised labour and state intervention. What really puts parties to the test is the way they apply those instincts to unforeseen issues – New Zealand was caught unawares not only by the global financial crisis but also the commodity price collapse of 2014.

Our economy was robust enough to withstand the shock. We did not go into recession. The National Government’s economic management deserves some of the credit for the country’s economic recovery and stability over the past nine years, but growth has also been based partly on population increases caused by more immigrants arriving and fewer New Zealanders leaving. There is also, simply put, a cyclical factor in economics: economies expand and they contract and the greatest potential that a government has is to make things worse, rather than better.

Consequently, when New Zealanders vote on September 23, they should consider not only the promises being made in the current buoyant economy, but the ability of various parties to handle a downturn and a crisis. Nothing is surer than that both will come.

It seems unlikely, however, that we will experience the “buyer’s remorse” of voters in Britain’s Brexit referendum, and in the US and French presidential elections. There, voters seem to have been beguiled and focused too little on what their choices would mean in practice. In the US presidential election, Donald Trump pledged to “Make America great again”. Yet as President he has arguably accelerated America’s decline in influence.

In Brexit, it seems all too obvious in retrospect that the single word “leave” could not begin to encompass the pain of disentanglement from the EU. The existential shock to the economy is now making Britain poorer. Meanwhile, in France, the photogenic President Emmanuel Macron, elected in a landslide four months ago, now has a dissatisfaction rating of 57%.

None of these situations is directly comparable to New Zealand’s. Yet each is a salutary reminder that the small, individual act of voting has real consequences. Plato warned us centuries ago that one of the penalties for refusing to participate in politics is that we end up being governed by those we don’t respect.

Our choice – a far more positive one than in most nations – is now.

When New Zealanders vote, they should consider the ability of various parties to handle a downturn and a crisis.