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We've just witnessed ferocious debates in the US concerning the future of their country. How applicable are they to NZ? Will the same sorts of debates determine the outcome of our next election? First and foremost, although my subject of economics is the one that we prefer to focus on, there is a view that the US election was fought on non-economic issues. Senator Pelosi argued the Republican Party effectively redirected public discourse towards non-economic cultural issues. She stated that Democrats faced a cultural assault centered on divisive issues like guns, LGBTQ+ rights, and religion - a triad Pelosi referred to as “guns, gays, and God.” For example, abortion featured as one of their most hotly argued topics. Is there a parallel in NZ? Yes. Former PM Ardern, more than any other NZ leader, threw herself into the center of culture wars - into gun control (after the Christchurch shootings) and God (as she self-anointed herself as the Patron-Saint of Kindness). She propelled Treaty-related issues into being at the forefront of national divisions. Ardern's Harvard Commencement speech was all "guns, gays and God" - the economy was never mentioned, not once. It got her a standing ovation at that University. It also got her and Harris booed out of office.


Former PM Ardern's interest was never on economic and cost-of-living matters. She burnt through money on the problems that arose during the pandemic, borrowing & spending, and printing cash on a reckless scale never before witnessed in NZ. But like Pelosi in the US, and Karmala Harris, she misjudged how much people cared about their standard of living. Harris was asked during the election by a member of the US public, "How would you reduce the cost of living?" and could not answer. Ardern also had no answer to that question, other than more income support. Like Harris, Ardern was thrown out when Kiwis elevated the cost-of-living to their chief concern. Kiwis tired of her moralizing and playing at identity politics. Consequently, what we have in common with the Americans has been our joint concerns over inflation and rising costs. What we do not have in common is concerns over protecting Kiwi jobs from cheap imports, as well as immigration issues. Why not? NZ is classified as a "small open economy". Ours is far more dependent on exports than the US. We need free trade agreements. Exports to GDP are 25% in NZ - in the US they are less than half that amount. On immigration, ours is nearly entirely legal, and the electorate has shown itself remarkably tolerant to it - with the main issue being the skill mix. By contrast, the kind of immigration in the US that became an election issue was illegal immigration, from Mexico.


In spite of these many differences between the US and NZ, there is one over-riding issue that does unite us: namely, that we have both lost our mojo. NZ was once proud of "Kiwi ingenuity", of being a place with an old US-style "wild west" culture, where people could try out new ideas, do extreme sports, experiment and be free to pursue their own "lifestyle". Kiwis were people who could get the job done and "cut through the crap" - we were very desirable overseas as workers for that reason. Now it takes us 10 years and counting to build a stupid little convention center in Auckland after a Monty Python catalogue of mistakes. The Christchurch Cathedral lies in ruins 15 years after the quake. Both are symbols of national decline - of how we can no longer deliver the goods on time - of endless wrangling. If one wants to be tightly controlled, regulated and highly taxed, then go live in Europe. Kiwi beliefs are shifted more in the direction of US ones - we believe hard work & effort should be, and largely is, rewarded in the market. We want freedoms to pursue our dreams. We don't share French beliefs that life is overwhelmingly unfair and, in spite of our best efforts, its unlikely we will ever be successful. We have a big thing in common with Americans - we both want to be living in stimulating, cutting edge economies, ones where there are opportunities for young Kiwis so they don't flee. President-elect Trump wants to return more powers to the States, to get them competing more, to make them more edgy. Elon Musk left over-regulated California to move his businesses to Texas. The equivalent in NZ is Kiwis leaving to go to one of the States of Australia. The problem for NZ, however, is that moving to Australia is leaving this nation. Moving to Texas is not about leaving America.

Add up the cost of the two new proposed tunnels in Wellington, fixing its water supplies, fixing Wellington's port and ferry facilities, building endless lightly-used bicycle pathways, reinforcing Wellington's buildings that can never be reinforced sufficiently to deal with the kind of earthquake that can easily be generated by the fault-line they sit right on top of, building an "international convention center" that will never hold much in the way of international conventions since Wellington doesn't have a proper international airport, and you get a figure of way over $10 billion. Is it being funded by Wellington rate payers? You must be kidding - their Council's debt is exploding, and the Transport Minister is already saying his new tunnels will be paid for out of general taxation. Wellington will probably be bailed in a few years, just like defaulting Detroit, another failing city, this time in the US.


Whilst other cities in NZ boom, Wellington City shrinks. To help protect the value of his commercial buildings, more than for any other reason, the guy we all thought was a free market, libertarian right-winger, namely Sir Bob Jones, has now been revealed as embracing Big Government. He's defending Wellington like crazy. Sir Bob wants Wellington to get bigger, filled with even more government workers to lease buildings from him. At least Bob has at last fully revealed his investment strategy - he has relied on socialism for his survival. That is, buy up in Capital Cities, because they "don't die", to quote his newly released words of wisdom. Then negotiate long-term leases with government. Being government, he figures the tenants won't leave, will keep the place tidy & not care what rent they pay, since its tax-payers dollars. The greatest hypocrite of all time, but a genius never-the less. Given how much Bob loves boxing and once famously punched a journalist for interrupting his fly fishing, he should maybe consider giving himself a punch sometime, or at least smack a trout over his face, as punishment for his hypocrisy.


Sir Bob is not telling the whole story. When I lived in Bonn in Germany, it was the capital city of that nation at the time - the center of power in what was then the world's second largest economy (before China surpassed it). During my time there, the capital was shifted to Berlin. Bonn could have been emptied out by the move, although managed to retain a bunch of government ministries. The same should be done in NZ. Wellington can retain its official status as capital, like Berlin is now, but should unequivocally have a bunch of its Ministries moved to Auckland. Social Development, Education & the Ministry for Business, Innovation and Employment should go. Its inappropriate they continue to be based in Wellington. Most of the country's social & educational problems are located in South Auckland. Those Ministries should be moved to Manukau City, which is next door, and by the International Airport. The fewer people going into work in Wellington City the better - then it wont need $10 billion ploughed into it to support the increasing population that it will never achieve. Of course, Sir Bob will try to stop the shift, since he's just come out as against free markets and creating wealth, apart from wealth that comes from taxpayers paying his rent.




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Robert MacCulloch

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