Why Ardern’s victory is a hospital pass
The votes are counted, the red confetti swept up and the blue balloons deflated. But what is now in store for Labour in their second term in office? Because if you thought 2020 was bad, wait until 2021 hits us full in the face.
This was the election nobody really wanted, and the poll no-one really wants to win.
Jacinda Ardern and her new Cabinet must deal with a slew of problems, some new, others longstanding, bearing down on them from home and abroad.
Covid-19 will continue its slow burn across the world, and she will have to decide how many intermittent lockdowns the public will accept, and the economy can handle.
If an approved vaccine becomes available, it may only offer protection for a short period of time. If immunity lasts less than a year, like other coronaviruses, we could see yearly flare-ups for some years to come.
Distribution of a vaccine could be slow, and New Zealand will have to fight for its place in the international deal-making queue.
If no effective vaccine materialises, Ardern is yet to develop a plan B. New Zealanders will be shut off to outsiders for years, hampering economic growth by killing off international tourism and immigration, the two mainstays of our trajectory out of the GFC.
We are currently in the worst recession seen in decades, more disastrous than 2008’s downturn, with GDP shrinking by 12.2 per cent between April and June.
The economy has proved more resilient than initial gloomy forecasts, as businesses adapted quickly to their new circumstances and Grant Robertson cushioned the blow by supplementing personal incomes with public borrowing.
Treasury predicts a big recovery by at least March next year. But the global economy is on red alert, and New Zealand’s fortunes will continue to be buffeted by disruptions in other countries. The spectre of double digit unemployment figures looms large.
The debt burden Covid has placed on future generations was well canvassed in the campaign.
At the same time, the nation will be grappling with a rapidly ageing population, with all the increased health and pension costs that come with that.
In the next two decades, almost a quarter of Kiwis will become eligible for Super. The ratio of people paying taxes and those drawing the pension will shrink. Ardern has refused to raise the retirement age.
She also ruled out a capital gains tax on her watch. (A new top tax rate of 39 per cent will swell coffers by roughly $500 million a year.)
That doesn’t preclude some other kind of wealth or property taxes, but she’d need to win a mandate. But it’s unlikely a party would bet their chance of a third term in office on such a radical policy.
The opportunity for resetting entrenched wealth inequality has been lost for perhaps another decade, with the Government powerless to rein in a runaway housing market.
We are also facing dual environmental crises. Climate change is eating away at our coastlines: the floods, storms, droughts and fires we have experienced recently will only become more frequent. As many as 4000 New Zealand species are at risk of extinction and our cherished landscapes are at risk. And, if things weren’t bleak enough on the home front, there’s no sunny upside in the geopolitical landscape.
The pandemic has laid bare the failure of social media companies to curb online scams, hoaxes and lies and misinformation is now a serious threat to both public health and democracy around the world.
Whatever happens in November’s presidential elections, Donald Trump bequeaths the next administration fiscal deficits in excess of $1 trillion.
Covid chaos in Washington gifted Beijing with an advantage, and breathing space, in their ongoing power struggle.
America isn’t going away, but China is here to stay. And countries will increasingly be pressed to take sides in the rivalry between the US and China.
Australia-China relations are unravelling, and New Zealand must tread carefully to avoid similar diplomatic tussles. A ‘‘Pacific Reset’’ pursued in the previous parliamentary term was met with blowback from China.
There is poison in the cup of victory, and as the post-election hangovers subside, Prime Minister Jacinda Ardern is facing a number of sobering challenges.
America isn’t going away, but China is here to stay. And countries will increasingly be pressed to take sides in the rivalry between the US and China.