Ardern has served lashings of Christmas cheer – but others dish up a more sobering outlook

So   what can  New  Zealanders   look  forward  to in 2022?

After   what  PM  Jacinda  Ardern has  labelled  an “incredibly  hard  year” , surely  the   path  ahead  is  smoother.

Don’t   bet  on  it,  even though the PM reckons our economic recovery is outstripping that of Australia, Canada, the European Union, Japan, and the OECD.

She  told  Parliament  on  its  last  sitting  day  that export forecasts were at a record high, as were milk pay-outs to farmers, and the terms of trade were positive.

Further, she said:

“A statistic that represents people’s livelihoods and their overall financial wellbeing is that we have seen unemployment down to record lows of 3.4%. And for every person that has stayed in work or has moved into work, that represents thousands and thousands of employers, business owners, business start-ups all working hard to support one another and their staff. It has truly been a team effort.

“But those numbers are also recognition of the hard work, foresight, and passion of this country’s finance Minister and Deputy Prime Minister, and I pay tribute to you, Grant. On a day when we release numbers that show projected net debt is lower and our return to surplus sooner, we say thank you”.

With   those  words  ringing  in  their ears,  New  Zealanders,  surely, can  indulge   in some  real Christmas cheer?

Maybe, but  there could  be  a  deeper-than-usual  hangover.

Not   just  from  Omicron — keeping that at  bay is still  very  much more  than  just  a headache — but  from  inflation  and other  economic  pains.

“Societal happiness”—one of  the  goals  of  the Ardern government—is  proving  as  elusive after  four years with  Ardern   at  the helm, even though  she claims (on child poverty) that  109,000 families are now on average $175 better off a week because of what her government  has  done and 40,000 children have been lifted out of poverty.

“On housing, we’ve now added 8,700 extra housing places; 3,100 extra transitional homes. And consents: consents for new homes have broken record highs for eight months in a row this year. On climate, we have increased our ambition and quadrupled climate aid.

“Because of our clean-car discount, more electric vehicles were registered in NZ in the past six months than for each of the past four years.

“We’ve seen 6.6 m/ tonnes of emissions cut from our industrial process heat sector.

“We’ve quadrupled the Green Investment Fund.

“And just in the last two weeks—just in the last two weeks—you will have continued to see progress on establishing the Māori Health Authority. Minister Marama Davidson released our country’s first ever strategy on family and sexual violence.

“And we’ve taken action to make NZ smoke-free in our lifetimes.”

 But  according  to many  authorities, NZ – and, indeed, many parts of the Western World have got themselves in a bind with inflation.

As  Keith  Woodford  writes: 

“Getting out of the current mess will be painful”.

 Woodford  believes the final precipitating factor that has created the current situation is the specific monetary response to Covid-19, but the underlying flawed thinking was firmly in place before that”.

Woodford  says there is no painless solution to the  current inflationary problem.

 “If inflation is to be reined in, then interest rates have to rise. That has potential to take the heat out of inflation,  but it is also likely to slow down the overall economy. I see storm clouds ahead”.

So  New  Zealanders –  when they sit  down  to Christmas  dinner should  enjoy – every  morsel of  it.

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