Government large and in charge; eyes now on Orr
Grant Robertson retired this week. After 15 years in Parliament and six as Minister of Finance. But it is clear that some of the problems that he faced and confronted from late 2021 did not go away just because a National-led Government was elected.
And that is because this coming Wednesday, the Reserve Bank of New Zealand has another big deliberation to make: whether the economy is frothy enough to justify another interest rate rise. Two weeks ago ANZ Research came out with a prediction that Adrian Orr and his monetary policy committee will have to start lifting interest rates again.
While the majority of market opinion predicts a hold for Orr and co on this occasion, it is a salutary reminder that while the general inflation rate is down, squeezing the last of it out of the system will take time and possibly a bit more pain.
It is in this context that Christopher Luxon’s State of the Nation speech was made last weekend. In it he painted himself as the plain speaker who was going to level with New Zealanders about the tough love ahead and the reasons why it is needed. Spoiler: it was Labour’s fault.
This is partly about setting up public opinion for what could be a pretty grim Budget come May. It is also about tilling the ground to convince the public what a profligate government Labour was. But it also served another purpose, providing some cover for National in the event that life gets harder before it gets easier - via, for example, higher interest rates and stubborn inflation.
As my colleague Andrea Vance noted on Monday, Luxon’s speech was a very good one. He stepped out of his safe space of corporatese and jargon, and communicated clearly in plain English. Vance wrote of the address that is “was good. Better still was the presentation. Luxon sounded like a normal person.”
The relationship between politicians and speech writers is a delicate one. While a bad speech writer can make a good politician look pedestrian, a good speech writer can often capture a good politician’s essence and personality better than they themselves.
With time the relationship becomes a crucial one for successful prime ministers. In return, however, the writer or writers keep in the background and are careful to credit the politician for speeches. Suffice to say there have been some personnel changes with the drafting of Luxon’s speeches.
It worked.
The Government parties are now firmly dominating the agenda while Labour is casting around for the best way to maintain some level of relevance. But given the level of the election shellacking and the need to go back to the drawing board, over the next 12 months, if Labour is in the news a lot, it will most probably be for the wrong reasons.
There was a real feeling during the press conference announcing Robertson’s retirement that this was it: Labour really now was in opposition. Up-and-comer Barbara Edmonds appeared ready to take the mantle but, brand new to the job, had little to say at this stage.
She is going to have her work cut out. A clear political talent, the question will be whether Edmonds has got that one crucial piece of political skill and luck right: timing. She will now have to help shepherd Labour from the depths, through what could be a pretty divisive internal debate on how it approaches economic management in general and tax policy in particular.
Robertson, who served as the crucial figure in the last Labour Government behind Jacinda Ardern - and commanded significant authority - will now leave a big vacuum. In political parties, with authority comes stability. And authority usually derives from longevity or success. When Robertson finally leaves to take up his busy new job in Dunedin, Labour will have to navigate a new generation coming through with the opportunity and risk that brings.
Some of the desperation came through during the week when, a few hours before the tragic death of Efeso Collins, Labour’s Ginny Anderson starting preposterously accusing Mark Mitchell of being “paid to kill people” during his time as a security contractor in various hotspots overseas, including Iraq. She also accused him of making a profit from it (evidently dangerous work shouldn’t pay). Quite why she ended up talking about that at all, and why she went so far, is a mystery. She has since apologised to Mitchell, who has succeeded her as police minister.
When Robertson finally leaves to take up his busy new job in Dunedin, Labour will have to navigate a new generation coming through with the opportunity and risk that brings.
Opposition exhibit A. When a person is a minister they don’t need to do much to make the news. The switch to opposition can lead to all manner of weird behaviour in search of news coverage.
The same day, the tragic sudden death of Collins cast a pall over Parliament, with just a terrible sadness over the building and lots of hugs and tears around the precinct. The political week was just about over before it had really begun as Parliament rose for the rest of the week out of respect for Collins, who had only given his maiden speech the week before.
The next two weeks will be about the Government winding up its 100 Day Plan. Luxon revealed earlier in the week that once the momentum from that first set of targets is over, he is going to be getting into a “second quarter” of action. Can’t keep a good CEO down.
However, depending on what the Reserve Bank says on Wednesday the Government could well be in for a wake-up call. During the election campaign it looked like softening economic conditions could even mean rate cuts could be on the table later in the year. That now looks less likely.
The Luxon Government is now well into the process of cutting budgets across the public service. Fiscal policy is being calibrated with monetary policy. However, the bigger driver is immigration and a still tight labour market (although it is loosening). It has also made expectations clear to Orr and the Reserve Bank
The point is that while the Government is glowing in its newfound attention and power, the economic forces that helped to drive Labour out of office so decisively are still around. The summer of action could well give way to another winter of grind and a Budget of restraint.
The Reserve Bank has a big call come Wednesday.
Panda diplomacy is back. Just as America’s zoos were down to their last family of the world’s favourite non-Peruvian bear, President Xi Jinping has softened in his determination to inflict black-and-white punishment on Washington for its hostility to Beijing.
San Diego Zoo, which once hosted the most fertile of all China's giant panda exports, is to receive two more of the animals this year, after Xi’s intervention.
The number of pandas in Western zoos – an explicit marker of the state of international relations since Mao Zedong sent a pair to Washington in 1972 – has shrunk dramatically in recent years.
Britain lost its last pair when Yang Guang and Tian Tian left Edinburgh in December. Four in Zoo Atlanta are the only ones remaining in the United States, and are due to leave this year.
But China’s Wildlife Conservation Association has announced that new deals for panda loans have been signed, with Madrid Zoo Aquarium in the Spanish capital also a beneficiary.
The National Zoo in Washington, DC and the Schonbrunn Zoo in Vienna were likely to follow, the association said.
The political weight of the agreements was signified by a statement from the foreign ministry in Beijing.
“I can tell you that the giant panda is a national treasure of China and is beloved by people around the world,” a spokeswoman, said.
“We look forward to further expanding the research results of giant panda and other endangered species conservation through the new round of international co-operation in giant panda conservation with relevant countries, promoting mutual understanding, and enhancing people-to-people friendship.”
Mao presented Ling Ling and Hsing Hsing to the US as a symbol of friendship after President Richard Nixon’s groundbreaking visit to Beijing in 1972, ending decades of mutual hostility and, for China, isolation. Other Western nations came begging in the years afterwards.
The arrangement was never wholly altruistic, with zoos paying up to US$1 million per year per panda.
They also co-operated with China in breeding and conservation programmes, despite criticism that the focus on captive pandas, of which there are now more than 600 in China and around the world, distracted attention from the destruction of habitats in the wild.
Nevertheless, the number of wild pandas, now thought to number between 1850 and 2000, has stabilised, and the deal with San Diego Zoo includes co-operation on conservation.
Panda diplomacy reached a nadir with the return of nearly all of America’s pandas last year.
Two pandas in Memphis were particularly controversial – Le Le, the male, died aged 24, and his mate Ya Ya, 23, developed a skin condition which Chinese websites decided was caused by ill-treatment, even though experts said it was a common condition.
Global Times, a tabloid offshoot of the Chinese Communist Party’s newspaper People’s Daily that often reflects Xi’s views, had asked whether it was time for half a century of panda politics to come to an end.
Xi apparently thought otherwise – his decision to take up an invitation to visit the US in November was greeted with relief.
At an after-dinner speech in San Francisco, he touched on the valuable role played by the bears.
“We are ready to continue our co-operation with the United States on panda conservation, and do our best to meet the wishes of the Californians so as to deepen the friendly ties between our two peoples,” Xi said. – The Times