Key and the Bank: a step away from the old normal

The aftershocks keep coming. One ran through the Reserve Bank early this month. The epicentre was the Beehive ninth floor.

The original quake hit the Bank the day of Christchurch’s disaster but there was too little data on which to make a sensible official cash rate (OCR) call so it waited until the regular date last Thursday. Meanwhile, Governor Alan Bollard made a reassuring speech, which some took to foreshadow a rate standstill. Others took the opposite view and began to bet on a cut by cutting market rates. Bank economists were vocal on both sides.

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Crisis! Time to Act (for some)

Don’t waste a good crisis. Bill English and Rodney Hide agree on that. Canterbury’s woe has a political upside for activists.

Hide has his own crisis: a party short on unity with an election coming. Act’s conference this coming weekend will be an early test.

English has a long-term restructuring aim, which the earthquake might now advance. John Key is nearer that thinking than a year ago.

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The international reach of a local calamity

The earthquake is, first, a Christchurch catastrophe. It is, second, a national calamity. And, third, it has international reach.

The upbeat international dimension is the wide range of countries which, unasked, sent support teams. That attests to a reputation for fair dealing, constructive engagement and independence built up over some decades.

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After two years, signs of strategy

Phil Goff elevates David Parker, Grant Robertson and others and demotes Ruth Dyson and Parekura Horomia. John Key discovers debt.

Both have an aura of strategy — just before Parliament’s opening tomorrow plunges MPs into back-biting, points-scoring and a torrent of well-meaning bills (43 to come from Simon Power alone).

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Waitangi Day coming: a time to wave flags

It’s Waitangi Day on Sunday, a day to fly the Maori flag. Political parties have been flag-waving already.

Phil Goff is waving a pink flag: a “tax-free zone” for low incomes (which, by the way, is a gift to part-time second-earners in well-off households). John Key says we can’t afford it, though last year he, and we, afforded big tax cuts, out of which the well-off have done very well.

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Putting the environment in the economy (or not)

The cabinet reconvenes tomorrow. There is a lot on its plate for now and for the year. You might add: for the decade. But this is election year and elections focus politicians’ minds.

There is an election date to fix but options are limited: holding it before the rugby world cup might suggest John Key lacks faith in the All Blacks and thereby is prefiguring failure. The logical date, Key has said and senior ministers say, is the once-traditional last Saturday in November.

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An investment opportunity for trader Key

John Key is the face of the government but he has yet to put his stamp on it. That is a challenge before him as he bids for a second term. Part of the answer may be whether he trades Key the trader for Key the investor.

First, some numbers. If ACT right now had only three seats (the most, on present indications, it will have after this year’s election), it could not on its own give National a majority, as now. And if National had two fewer seats, the Maori party’s five would not do on their own either.

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When inequalities globalise, how much can we keep to ourselves?

This is the year to start focusing on the next globalisation: the merging of inequalities within economies with the inequalities between economies. It’s been running a while already. It might make free trade arguments irrelevant.

There is a parallel globalisation, that of the physical environment and its resources. Growing recognition of the interdependencies embedded in this globalisation lay behind governments’ bother at Cancun last month to keep climate change negotiations alive.

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