New Year brings with it new hopes, expectations and of course challenges and although the world appears to face a series of serious problems (see our second Leader below), there is cause to believe that New Zealand will do better in 2015.
A number of positive notes augur well for New Zealand but indubitably, global developments would affect us as well.
Firstly, the general election held on September 20, 2014 has produced greater political stability, allowing the National government (although not with absolute majority) to move ahead with its promised reforms. While some of the proposed statutory changes would find less opposition from political parties and the public, a few others would be challenged. Any government in its third terms risks weariness, leading to increasing public apathy. Although National does not face such a risk now, it must tread its path with care over the next three years.
Secondly, the election of Andrew Little as the Leader of the Labour Party on December 18, 2014, could well begin the painful process of rehabilitation. The Party has started making gains in opinion polls (not at the expense of National but the Green Party), which in itself may be a good thing. As former Labour Leader David Shearer writes in his regular column (see Homelink), “Andrew Little has made a very strong start as Labour’s new leader. We are in good spirits – and looking forward.”
Thirdly, the Reserve Bank of New Zealand has implementing new policy initiatives that would promote a healthier banking and insurance sector. A number of prudential tools (as mentioned in Businesslink) will help in creating a more congenial environment and boost business confidence, imperative for higher levels of growth.
The Government believes that an OBEGAL (Operating Balance before Gains and Losses) surplus is achievable this financial year, despite Treasury’s latest forecast predicting a $572 million deficit (0.2 per cent of GDP) for the year to 30 June 2015.
Finance Minister Bill English is optimistic, saying that the New Zealand economy remains one of the fastest growing in the developed world, and that his government’s economic programme is taking the country in the right direction.
Available figures appear to endorse that view. New Zealand’s Gross Domestic Product expanded by 1% in the September 2014 quarter, taking the annual growth from September 2013 to 3.2%. The average annual growth from June 2007 to June 2014 has stood at 2.9%, considered good during a period of global financial crisis.
As Mr English said, “We are in an unusual but encouraging situation where we have solid economic growth, more employment and higher wages, but few pressures on inflation.” Lower inflation and the consequent lower tax revenue would however challenge the Government from returning to surplus this year.
As we had mentioned before, Mr Key has swept back into power, because not only people did not want a change, but also because they believed that he is genuine leader with a heart for the progress of ordinary New Zealanders.
His opponents would not agree of course, but to a majority of New Zealanders, tax incentives, improving law and order, tougher sentencing for convicted criminals and repeat offenders, delivery of better health services, higher standards of education and most important of all, benevolent governance are issues on which he and his party have secured a good mandate.
The party is over. It is time to get down to some serious work.