What will 2018 bring?
Welcome to 2018. In this new year, the world seems a more uncertain place than it did a year ago, but on the domestic front, New Zealanders have at least some things to look forward to.
Hundreds of thousands of lower-paid workers and families will get an income boost. Firsttime tertiary students – about 80,000 of them – are now enrolling for a year of fees-free courses.
The minimum wage will increase 75 cents an hour to $16.50 on April 1, upping the pay packets of 164,000 workers. On the same day, 384,000 families with children will become better off by an average of $75 a week thanks to changes to the tax system, working for families and an increased accommodation supplement.
These measures are dated and costed, so can be noted with some certainty. Beyond that, the crystal ball foretelling our fortunes for 2018 gets a bit murkier.
The figures for university and polytechnic enrolments will not be known for a few weeks, but expect an increase. The Government has budgeted for an extra 2000 due to the free-fees policy. Economic growth is predicted to continue at around 2.5 to 3 per cent this year. Interest rates will remain low, at least for the first three quarters. But the benign economic conditions that have fuelled the rock-star economy in recent years are now more uncertain.
Dairy production for the 2017-18 season is likely to be down 4 per cent on last year. Meanwhile, there are signs that the big three economic drivers – immigration, tourism and construction – have peaked or are running into capacity constraints.
Immigration curbs, meanwhile, will dramatically reduce the net inflow of people coming into New Zealand each year from its recent high of 74,000. This may lead to labour shortages in, for instance, the hospitality industry.
The Government’s ambitious house-building plan and restrictions on foreigners owning real estate can be expected to limit the rampant growth in house prices, but will take time to make a difference, and the effects will be patchy. Christchurch seems to have overshot on house-building, but Auckland’s problems will take years to fix. House prices nationwide will probably still rise, but not by as much as in previous years.
Expect big changes to how we live our lives on the technology front – everything from smart technology and more voice recognition in everyday objects, to artificial intelligence, to machine learning and cryptocurrencies. Those electric vehicle charging stations popping up around the place will soon be filled with cars.
Our increasing dependence on technology also carries risks which would not have been foreseen in even the recent past. Algorithms will continue to influence the way we interact and learn about the world around us, not always to our benefit.
Meanwhile, it is only a matter of time before New Zealand is hit by a WannaCry-type cybersecurity attack. And while the risk of real-world terrorism may remain relatively low in our isolated corner of the world, it cannot be ruled out. As for natural disasters, some believe we are already seeing the effects of climate change in more droughts and floods. GeoNet says there is a 2 to 14 per cent chance of a very large earthquake (of more than a 7.0 magnitude) in the next 12 months.
Happy New Year.