Last Wednesday the new Government took over in New Zealand. While the world celebrated the ascension of Barack Obama in the United States, welcoming a return to the left and hopefully the greater global fold, Kiwis were feeling grumpy. They dumped the three-term Labour Government coalition in favour of a right-leaning National-based government led by a multimillionaire and former currency trader (I think) named John Key.
My fellow Americans zigged, New Zealand zagged.
The National party fell a few seats short of a true majority – which would be a major feat in the MMP system used here. Instead they formed a comfortable 70 seat coalition that includes the Act Party, the Maori Party, and the Peter Dunne Party (which goes by the broader name of United Future. It’s not hard to be united when you’ve only got one MP in parliament).
The irony is not lost on some of us that Mr. Key used the spectre of a “5-headed monster” i.e. a 5-party Labour led coalition during the campaign. Apparently 5 parties is just 1 more above tolerable. Then again, you have to give Mr. Key credit as he deftly reduced the influence of the Act party (very right-wing) by forging an alliance with the Maori Party (more left-leaning), giving National the ability to sway in the political wind. The alliance represents a bit of gamble by the Maori Party leadership given the strong Labour party vote by Maori in the election. Then again, better the devil you know as the saying goes.
Similar to the United States, the mood here remains cautious and wary. It is not clear yet what the full effect of the global financial change will bring for New Zealand. Apparently the Treasury is now forecasting up to 10 years of budget deficits. Initial indications suggest that the “bland” NZ economy may take awhile to feel the backlash. The NZ Reserve Bank is following suit and slashing interest rates quickly in the hopes of keeping the embers of the once-hot NZ economy warm. The effectiveness of such a policy remains to be seen, as a good portion of NZ credit is (was) sourced overseas.
The new National-led government’s agenda seems to focus for the moment on review of government services. A factor in Labour’s loss likely stemmed from the increase in government size durinig their tenure. You typically get two views on this: either government became bloated under Labour’s watch and needs refocusing/reducing or Labour simply restored government services to reasonable levels after too drastic cuts by the previous National-led governments of the 1990’s. I suspect that the truth lies, as usual, somewhere in the middle.