Pundit

The run up to the election is the silly season; is there any point in taking most of the tax proposals seriously? It’s the silly season when campaigning politicians repeatedly display their ignorance. Perhaps the most famous instance was NZ Party leader, Bob Jones, claiming in 1984 that floating the exchange rate would eliminate the government’s fiscal deficit, confusing the public sector with the entire economy with its deficit in the current account of the balance of payments.

Short notes on economic matters which do not make a full column. Wellbeing It is true that wellbeing is a fuzzier concept than, say, GDP. We can make it less fuzzy by discussing and researching the notion but because it is multidimensional and about actual people, I expect it to always be a bit problematic.

The American evidence is that they frequently do not. For over a century there was a separate Department of Labour, which was amalgamated into that vast miscellaneous department, the Ministry of Business, Innovation and Employment. Today there is no Minister of Labour, while the portfolios of workplace relations and safety and of immigration are held by different ministers despite migration being an integral part of the labour market.

Are we too focused on material consumption at the expense of wellbeing? GDP is a measure of market activity. It was originally developed to understand what was happening to the market economy, especially about the rise in unemployment during the Great Depression. It was never intended to summarise all human economic activity. For more than two-thirds of the history of the New Zealand economy, before the arrival of the European economy, there was economic activity but no markets nor money.

At the 2026 election, unemployment is likely to be higher and inflation lower than it was in 2023. It was headline news that the unemployment rate, at 5.6 percent of the labour force, rose in the June Quarter to its highest level since March 2015. In fact it has been creeping up over the last few years; the rate hovered around 3.2 percent in 2021 and 2022.

Christopher Luxon remains leader of the National Party, and therefore Prime Minister. Surely, he will now lead National into the election on November 7. Leadership questions and the fact that the National caucus is undoubtedly divided will also surely be a major factor in the campaign. Voters will not simply ignore the fact that Luxon’s closest colleagues have such doubts about his leadership that he’s required two votes of confidence this year to keep his job.

Productivity increases do not always generate increases in profits. We do not know when the economic boom generated by AI will be over, but the overstretched industry is increasingly looking shaky. When I last wrote about financial booms and busts, I equivocated over whether the next financial bust – there will be one, we just don’t know when – would be precipitated by a collapse in the cryptocurrency market or the AI market (or perhaps something else).

Where does the grumpiness threatening the nation’s stability come from? Why is everybody so grumpy? Politically grumpy, I mean. Not just in New Zealand; Australia, the US, Britain, much of the rest of Europe all have a restlessness which is indicated by dissenting populist parties. The political fragmentation is on the left and the right. It can even be difficult to place some of these parties on the political spectrum. The economy seems to be part of the problem. Perhaps not all of it.

The speed and strength of the condemnations of Stuart Nash this past week was a big clue. Nash had done what few can – unite all of Parliament’s parties in agreement. Christopher Luxon’s late night escalation was another clue. When the Prime Minister first commented on Nash’s opinion that Napier MP Katie Nimon was “the laziest MP” he’d ever known, Luxon had condemned Nash for “channelling the manosphere” but didn’t rule out him joining a future cabinet.

There is insufficient support for neoliberal economic policies so political parties of the hard right are adopting populist causes. To succeed the neoliberal revolution of Roger Douglas and Ruth Richardson had to change the culture of New Zealanders from their belief that the government was usually the solution to a problem to a society which emphasised the autonomy of the individual and down-played the role of collective actions which involved compulsion (like taxation).