Population ponzi sinks New Zealand government

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By Leith van Onselen

With the general election scheduled for 23 September, things are starting to look bad for the recently promoted Prime Minister of New Zealand, Bill English, delivering a stark warning to Aussie politicians.

Yesterday, Stuff.co.nz reported that the latest Newshub-Reid Research poll has placed Bill English on 25% in the preferred prime minister rankings. The result puts him 11 percentage points behind Key’s 36.7% result in August last year – which was his worst result in the Newshub poll. English’s result was also the lowest figure for a sitting Prime Minister in at least 10 years, dating back to Helen Clark’s final term in charge.

And today, the latest Roy Morgan polling revealed that National has slipped behind on a two-party preferred basis:

During March support for National fell by 4.5% to 43.5%, now just behind a potential Labour/ Greens alliance 44% (up 5%). If a New Zealand Election was held now the latest New Zealand Roy Morgan Poll shows it would be too close to call with New Zealand first likely to play a decisive role in determining which parties would form the next Government…

Of the three Parliamentary Opposition parties – Labour’s support was at 29.5% (up 3.5%), Greens 14.5% (up 1.5%) and New Zealand First 7.5% (down 0.5%). Of the parties outside Parliament the Internet Party was 0.5% (up 0.5%), Conservative Party of NZ was 0.5% (up 0.5%) and support for Independent/ Others was 1% (down 1%)…

Gary Morgan, Executive Chairman, Roy Morgan Research, says:

“Today’s New Zealand Roy Morgan Poll shows a sharp decline in support for National – down 4.5% to 43.5% – the lowest they’ve been since English became Prime Minister in early December.

“A potential Labour/ Greens alliance is now just in front of National on 44% (up 5%) with both parties enjoying increases in support – Labour up 3.5% to 29.5% and the Greens up 1.5% to 14.5%. The neck-and-neck contest between the two sides of New Zealand politics means the centrist New Zealand First Party (7.5%, down 0.5%) led by ‘Maverick’ MP Winston Peters could once again decide which parties form Government in September.

“The fall in support for National comes after Prime Minister Bill English announced a raft of potential reforms to New Zealand’s superannuation laws early in March including increasing the retirement age to 67 (from 65) by 2040. The proposed reform will impact anyone born after July 1, 1972 – ie under 45 today.

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A perennial issue lurking in the background is the housing crisis (particularly in Auckland), which has shut many young Kiwis out of home ownership.

National has pinned the solution purely on supply, but is failing badly on this front. Immigration into New Zealand is running at an all-time high 71,333 people, with most of these migrants settling in the already under-supplied Auckland:

NZ Net Migration
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According to the Statistics New Zealand figures, there were 30,123 new dwellings consented across New Zealand in the year to January 2017, with just 10,032 consented in Auckland. This is well below the estimated 15,000 new homes that need to be built in Auckland every year just to keep pace with its migration-fuelled population growth.

On the other hand, the Labour and Greens opposition are in favour of cutting immigration and have far more comprehensive housing affordability policy platforms.

Many of these policies were formerly championed by Bill English but his ascension to power has seen them discarded with predictable results.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.