Ironically, it’s NZF denting the Government’s economic credibility. We examine why.
Never mind all the side shows, National’s core popularity has been due to John Key’s economic ‘credibility’.
This has been built on three factors:
- The global financial crisis has made economic times tough, not National
- John Key is a self-made smart economic operator, who is likable
- National is the party of economic stability
Labour has been unable to make public headway with criticism of National’s economic performance. Primarily because it, and its spokespeople, do not yet have a reputation for credibility.
Winston Peters does not have a reputation for financial credibility either. But he’s been going on about financial matters most of his career.
Now, fours years into a recession with no apparent end, the timing is right. People are beginning to wonder, after inconsequential Budgets, what National has done that matches responses in nations such as the UK and US.
Winston Peters has a private member’s bill to amend the Reserve Bank Act. It won’t pass, but it has spurred debate about whether the current Act is helping the economy. The appreciating strength of the New Zealand dollar has raised concerns about exports.
Winston’s Bill would have given the Reserve Bank Governor the ability to consider many economic factors when setting the official cash rate (OCR).
He claims that inflation has not been a problem for a long time, but a high dollar value has been – so should be a factor in setting an inflation target.
Labour backed Mr Peters’ bill. It also seems to be advocating more radical options, pointing to US, which is printing money to devalue its currency, and other nations putting in valuation caps.
Winston’s bill was, surprisingly, a conservative route to improve flexibility, contrasted with Labour’s more radical prescription.
The circumstances have allowed Winston to appear thoughtful, considered and – crucially – proactive. While the Government appears to say things are okay as they are, and Labour hopes for many things.