The Ardern government may have been stirred, but it wasn’t shaken, by the nationwide protest by farmers last Friday. And no matter how far the protest may have turned heads in the rest of the population, it leaves farmers no further advanced in persuading ministers to modify or revise the policies which their action targeted.
So if ministers won’t back down on their environmental reforms or their climate change policies, where can the farmers go? Parade through Wellington to Parliament? Mount a 24-hour vigil in Parliament Grounds?
So far there has been silence from the originators of the Groundswell and if there is a new sense of unity in the rural regions, it has yet to be channelled into the kind of pressure that automatically achieves change.
Farmers may be disenchanted with being told how to farm, but the evidence of climate change has been rammed home in the provinces in recent days hard enough to convince churlish sceptics of the need for urgent climate action.
As Point of Order sees it, this is the chance for Ardern and her team to find the compromises which will demonstrate to the world that NZ is once more at the front of the curve in farming practices.
In any case, the Ardern government looks as if it has stumbled into an even deeper pit closer to its own doorstep.
The charge is that it has created a “wellbeing” disaster. “Wellbeing” is one of its pre-eminent goals.
Finance Minister Grant Robertson even designs his budgets to achieve “wellbeing” as he pours billions into measures to raise living standards.
But Arthur Grimes, a former chairman of the Reserve Bank and a former Chief Economist at both the Reserve Bank and the National Bank of New Zealand, says the government and Reserve Bank have engineered a “wellbeing disaster”, using the inflation targeting approach towards monetary policy he designed in the late-1980s.
Grimes, who now heads up Wellbeing and Public Policy at Victoria University and is a Senior Fellow at Motu Economic and Public Policy Research, laments the explosion in house prices that has accompanied the RBNZ’s slashing of interest rates.
“This is the worst wellbeing disaster we’ve probably had in the last two decades,” he told interest.co.nz.
“I can’t imagine a worse wellbeing outcome that’s been engineered than keeping young people and poorer people out of the housing market.”
He has believed for some time the RBNZ overcooked its response to COVID-19 by loosening monetary policy too much.
He partly attributes this to the RBNZ being required to target annual consumer inflation of between 1% and 3%. Pre-1996, the target was between 0% and 2%.
“You basically have a central bank that’s actively been pushing up the cost of living. It just seems extraordinarily detrimental to wellbeing,” he said.
“If you have a wellbeing government, why would it be trying to push up the cost of living for people?…
“Prices are still going up when inflation is at 1%.”
Grimes believed the RBNZ could be made to target house price inflation in addition to consumer price inflation when setting monetary policy.
He commended the Government for recently requiring the RBNZ to “assess” the impact of its monetary policy on house prices, but maintained it could go further.
Grimes also reiterated his opposition to the Labour-led Government in 2018 requiring the RBNZ to target “maximum sustainable employment” as well as inflation.
He is adamant this requirement prompted the RBNZ to do more to lower interest rates than it should have.
Grimes said the Treasury was “utterly incompetent” when it advised the government on making the change.
“Now we’re seeing the result of that,” he said.
“It’s just terrible what’s been done to the generation that’s left school and getting into the workforce.”
Point of Order suspects the Grimes’ onslaught may be hitting the government where it hurts far harder than the farmers’ howl of protest.