Tony Alexander on if we have a NZ Trumpit

Tony Alexander from BNZ writes:

Could we see next year’s general election produce a very unexpected outcome, with voters gravitating strongly toward a party or candidate quite different from the incumbents and usual competitors?

Here are some arguments in favour of this not being the case in New Zealand. These are simply the thoughts of a macroeconomist and there are bound to many more points for and against an NZ parallel with Brexit and Trumpit that skilled sociologists, historians and political analysts could make.

Our labour market is strong with plenty of job opportunities. Not only is the proportion of the traditionally defined 15-65 working age population in work at a record high of 70.1%, it is massively above the US rate of 62.4% and the employment rate for Kiwis 65+ has jumped from 5.8% to 23.6% since 1998. Many people in the United States feel there is so little chance of getting a job that they are not even making themselves available for work. They are no longer part of the labour force. They have given up hope of advancement for themselves and their families and have felt disenfranchised by a leadership more focussed on issues of social equity than the economy.

That is a big difference – an extra 8% in the labour force.

We have a strong welfare system. In the United States they have food stamps, time-limited unemployment insurance, and minimum wages which range from $5.15 an hour to just over $10. The NZ minimum adult wage is $15.25. New Zealanders got rid of their perceived “nanny-state” government in the 2008 general election. Our MMP system for electing parliamentarians means disaffected voters can already gain representation. We do not have a society displaying the same depth of concern about immigrants – whether legal or not – as in the US and UK. It is virtually impossible for anyone to turn up in NZ unannounced.

There are some concerns over immigration settings, but unlike the US and EU we do have secure borders.