Is Aotearoa on the mend?

What's your forecast?

Daring to think optimistically, this week in Aotearoa New Zealand was more than just the beginning of Spring.

Although the country is saddened by the passing of Kīngi Tūheitia, tangihanga is a time for reflection and for bringing people together. This could help to heal some of the discord since the Luxon government took office – although a controversial Treaty of Waitangi Principles Bill has yet to be fully, and no doubt hotly, debated.

And there are some signs that the economy could be on the mend – or won’t get any worse. The easing of inflation and the cuts in interest rates are being touted as “green shoots”, following a period when businesses have been struggling and living-standards slipping.

Luxon & Co may be hoping that the worst is over. They’ve taken the wrecking ball to Labour’s achievements and weathered a storm of criticism for it. In their wildly optimistic moments, they might think that, in a couple of years’ time, they’ll be boasting about an economic miracle – and romping home at the election for a second term. But things are not that sweet.

It’s projected that, come the next election, the government won’t have met key fiscal targets. They’ll still be running budget deficits, and public debt will still be above the desired ceiling of 40% of GDP. There’s also concern about local government debt (and hence rates) and about the current account deficit (i.e., sending more money abroad than we’re receiving).

The not-so-optimistic conclusion is that New Zealand is “living beyond its means”, while international creditors and rating agencies are watching.

This may be a bit theoretical for most voters, but they certainly understand rising prices and (un)affordability – and unemployment, which is set to rise. These may punch weaknesses into National’s defences at the 2026 election.

Political debates for the time being, however, may be guided more by historians than by economists, as people argue over “1840 and all that”. On the other hand, Luxon & Co may still be “driving with eyes on the rear-view mirror”, in thrall to the Key era. Will anyone be paying attention to the obstacles ahead?

It’s easy – and perversely enjoyable – to get gloomy and cynical, especially when big policy problems get used as political footballs, things don’t get fixed, and there’s little we ordinary folk can do about it. But there are some signs of progress.

A National Infrastructure Agency is to be set up by December, along with a 30-year plan. And there’s been talk (hopefully not empty talk) from both Labour and National about the need for bipartisanship on this, so that the short electoral cycle and changes of government don’t delay progress – and deter investors – with parties chopping and changing.

The country can ill afford the kind of polarisation that prevents opposing parties from agreeing on anything at all.

To succeed in the arts of government means to work through and with disagreements, and to compromise when necessary – rather than to try to beat opponents on all fronts, no matter how small. Politicians should lead by example on this, rather than be the worst offenders.

A lesson from the rise of populism is that it doesn’t pay to dismiss the values or perceptions of people who question or resist orthodox policies and opinions. If large numbers of people feel as if no one’s paying attention to them – no matter how they express themselves – then trouble will brew. People notice and get especially riled by hypocrisy.

If we believe that we do live in a democracy, then presumably we don’t believe in ignoring or suppressing what other voters think. When we disagree, then the better approach is to listen and find out why we disagree. We may discover that we’re not so far apart.

In my corner, comments from all sides of the political contest are welcome. I look at the concerns that people express, not at whether they fit a template. Unlike Elon Musk, however, I don’t accept insulting or abusive language.

Not AI-generated. Photo by the author.