Resilience amid turmoil: a long-range challenge for Key

It never rains but it pours. Queenslanders would get the point of this tired, hackneyed, overused, wrung-out, saturated cliche. New Zealanders might be starting to get the point of the figure of speech.

Do some simple addition.

Start with two Christchurch earthquakes in an area where there was, Sir Peter Gluckman’s scientists told us last Wednesday, “no evidence for seismicity” (no “foreshocks”). Add the Pike River mine explosion.

Count up the short-term costs to Christchurch commerce, manufacturing, education services and other exports, tourism and wages and immediate additional living costs. Add the short-term and medium-term costs to the national economy in scared-off foreign tourists and students, higher insurance charges and fiscal costs (then offset those with a construction boom from 2012 on).

Then add the Japan tsunami: short-term costs here in exports and tourism and higher global oil, gas and coal costs as other nations shut nuclear plants and rethink nuclear programmes.

Then guess whether the Middle East unrest might over time be disruptive not just to Arabs but to international stability. That would have economic as well as human costs.

Next, note that food prices are above the 2008 spike which in that year precipitated riots and political instability in a range of poor or poorish countries. In this country poorer suburbs are being bashed by high prices driven off the export bonanza.

There is reason to think food will be a periodic global issue for some time. Stocks have fallen for years. Higher oil prices encourage farmers to grow fuel for petrol tanks instead of food. Water is short in many parts of the world and ways to fix that are likely to take some time put in place.

It all adds up to a reason to hunker down. Stack it on top of the post-2007 great financial crisis (GFC) and worry, along with Australian Reserve Bank board member Professor Warwick McKibbin, about a commodity bubble. The cruisy mid-2000s are now the distant past.

Bill English’s warnings in 2009 and 2010 of shocks to come look prescient. An orderly return to pre-2008 calm prosperity looks optimistic.

How will this play out in politics here?

Look abroad. Irish and British governments deposed, seismic change in the American Congress, the Australian Labor federal government nearly gone and state Labor governments either gone (Victoria, Tasmania), on the way out (New South Wales this coming Saturday) or under water in the polls (South Australia).

Might we expect the same treatment for John Key’s government in November?

The opinion polls don’t say disasters and turbulence have damaged him or his government. Since the 2009 honeymoon ended, the rolling average of the gap between National and Labour has been in a 16-22 per cent range and if anything, has risen a bit since the natural disasters started happening. Adding the Greens to Labour and ACT to National to give a left-right picture doesn’t change the readings.

Add in a real poll, the by-election in Botany on March 5: essentially, on a left-right basis, it was a standstill on the 2008 result, which is not as good for National as the opinion polls and so might be read as an indicator of a shift after the Christchurch shock, except that specific local and other factors were in play — and in any case a standstill on 2008 would be an easy win.

And, unlike in Ireland, Britain and Australia’s states, National is not to blame for the economic plight. In the United States the swing was as much against traditional opposition Republicans as against newly incumbent Democrats. The federal Australian government self-combusted. Key’s shows no sign of that.

So the GFC, natural disasters and commodity spikes are not (yet) a threat to National’s return to power. Appeals to stability might even work in National’s favour.

But what then? At some point Key will be held responsible. He will then need a plan.

An implicit challenge will land on Wednesday when the Auckland Council issues a discussion document on its “Auckland plan”. Can Key and Len Brown make that plan a New Zealand plan, not just one for Auckland?

The discussion document talks of a high-value city economy and of Auckland being an innovation centre for this country and, grandly, the innovation capital of the Asia-Pacific rim.

The challenge for Key and Brown is to ensure policy is conducive to Auckland becoming a place where creative types congregate who make money out of high-knowledge-intensive activities. Such enterprises can do more to lift this country’s wages nearer Australia’s than more cows and Chinese tourists.

Such activities might also be less susceptible to disasters of most sorts, as the Christchurch IT sector shows. That is, they might make the economy more resilient.

That can’t happen overnight. But a Key who wants not just to survive recent disasters, financial upheavals, commodity spikes and other shocks but surf future ones with voters still on board might need some policy insurance.