Polls bring Labour back to earth while a warning is sounded about the need to brace for next economic crisis

So how  is  the  political landscape looking as the country  inches  slowly  towards   the goal  of  being 90%  vaccinated against Covid-19?

The  government  which  just 12  months   ago  was  blissfully floating beyond electoral threat somewhere  in the  political stratosphere  has  come  back  to  earth with something  of  a thud.

But National,  still  apparently  without  the  capacity  to  strike  the  wavelength  to  reach the  public  as  it  did in its  heyday, has   yet to find  its  old  mojo.  By  comparison, ACT  has been  flexing   a  new kind of   muscularity, without  suggesting  it has  yet  the  ability to  land  a  killer  punch

Meanwhile  a group  of  top  economists  is  warning   that  the  seeds  of  the  next   economic  crisis  have  been  sown. The steps taken by countries, including New Zealand, to counter the economic impact of Covid-19 have masked and in some cases exacerbated the risks.

“The Covid-19 financial support package has kept Kiwis off of the dole queue and saved many businesses from bankruptcy,” report co-author Bryce Wilkinson​ said.

“However, the government should promptly repay those debts in order to be prepared for the next financial shock. Failing to prepare now for the next financial crisis could destroy New Zealanders’ nest eggs and threaten their livelihoods.”

Wilkinson said governments had been spending money they did not have to spend and central banks had been acting as “bottomless ATM machines”.

A common approach around the world has been for governments to roll out expensive support packages for households and businesses, borrow heavily, while central banks have loosened policy and printed money, driving interest rates lower and fuelling property and sharemarket prices and inflation.

However, the report said policy makers would have difficulties in unwinding the “extreme” measures, and there could be dire consequences such as higher unemployment, company crashes and the destruction of New Zealanders’ savings and livelihoods.

Former Reserve Bank chair Arthur Grimes wrote in the foreword  to  the report, published by the  NZ Initiative, that

“… central bank actions through the pandemic … have placed NZ at greater risk of an asset price collapse with ensuing economic pain; the risk is heightened by the unsustainable fiscal and monetary policies globally.”

Grimes is urging the government to prepare for the next GFC by reducing debt, even though NZ is too small to prevent it.

Against  that  economic backdrop  it should  not  be  a  surprise  that  political  polling   is showing support  for  the  Ardern government  has  retreated  and  some  political  pundits  are  reporting  that morale  within the  National  camp is  recovering.

The  Roy  Morgan  poll  this  week  showed Labour  down  at  39.5%,  six  points lower than in its  previous  poll in September.  National  was  26%,  up  three  points,  ACT  was  unchanged  on 16%, and the  Greens  were  at  13%.

Other  polling  is  understood    to   show  similar  trends.

Labour’s slide   coincides  with an apparent  rough  passage   for Prime  Minister  Jacinda Ardern as  the  government  seeks  to  steer a  course back  to   post-Covid  normality. It  seems   some  differing  opinions  are  beginning to show  up  inside  the Cabinet on  just  how  this  should be  done.  Moreover  the  government’s  handling   of  the  vaccination  rollout  is  now  being held  up  to  critical  scrutiny, just   as the  tardy  return  to  normality  has  been.

Other  issues  like  the  Three  Waters policy  being  driven through by  Local  Government  Minister  Nanaia  Mahuita  are   stirring   up vociferous  opposition.

National’s   failure   to  capitalise on  the  government’s  latest Covid fumbling is  being laid  at  the  door   of  leader  Judith  Collins,  who  has  been  unable  to  sharpen the  party’s  attack  any  more  than   she  can lift   the  spirits  of the  party’s  foot  soldiers.  Not  surprisingly,  there  has  been  increasing  speculation her  leadership  could  face  renewed  challenge, either   from  Simon Bridges   or  Christopher  Luxon.

Matthew  Hooton,  never  a  fan  of  Collins,  headed    his  political  column  in  the  NZ  Herald   this  week   “Now is  Luxon’s  time  to  step  up”.   Not  a  good  omen,  coming  as it does  from  from Collins’  home  base.

Meanwhile  Labour  goes  into  its   annual  conference  this  weekend with  an agenda  which means a major  talking   point  will be a  change  in  the  rules  on  how  the party  elects its  leader.  That  has  led  to  speculation , which  Point of  Order  understands to be  groundless,  that  Ardern is  seeking  an  exit  next  year.

2 thoughts on “Polls bring Labour back to earth while a warning is sounded about the need to brace for next economic crisis

  1. I think the speculation about Ardern’s exit is based on a growing belief she is temperamentally unable to handle criticism or being unpopular. Basically, if the heat in the kitchen gets too intense, she will decamp.
    Commentators are effectively predicting that Ardern is in for a very hard run — and not just over her management of Covid. The opposition to Three Waters will only intensify — especially once journalists are forced to acknowledge that it is yet another element of He Puapua being realised.
    Journalists are very reluctant to come to that party — but growing criticism on social media will force them to address the issue.

    Liked by 1 person

  2. Collins problem as I see it is not within the party or even the members it is the fact that Labour has paid $55million to the media and they (the media) are paying Labour back in bucket loads by not giving Collins a fair go – or a fair suck of the sav as the saying goes. If that changes even by 10% look to National to progress into the mid to high 30’s in the polls quickly.

    Like

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