Liam Dann: A gloomy outlook is as Kiwi as jandals and mince pies

COMMENT: New Zealanders are a gloomy lot.

We're the only nation in the world to choose black as our national colour. We've built our literary and cinematic world on dark and uneasy tales.

Even our comedy is pretty black.

We tend to see pessimism as a healthy view — a kind of emotional insurance against disappointment.

We also — and I include myself here — maintain a pretty a gloomy outlook on the economy, even when the data provides solid evidence of strength.

Weak confidence has been a theme for business this year.

But buried in one recent confidence survey was a reminder of the negative bias we often carry.

Last month the MYOB Business Monitor — which polls 412 small and medium-sized business operators — found 53 per cent expected New Zealand's economy to decline over the next 12 months.

A large number reported actual declines in revenue in the past 12 months, so I'm not doubting that they are grappling with rising costs and squeezed margins.

But MYOB also threw in some questions which tested the broader outlook of respondents.

It asked how they thought New Zealand ranked against the rest of the OECD in key areas.

Mostly perceptions were overly negative.

For example, 31 per cent of respondents thought New Zealand was worse than the rest of the OECD when it comes to the difficulty of managing business compliance.

In fact the World Bank's Ease of Doing Business Report has ranked New Zealand as easiest place to do business for the past two years.

A particularly gloomy 15 per cent of respondents thought we were worse than the OECD average on corruption.

In fact we rank as one of the least corrupt economies — the Transparency Corruption Perceptions Index had us ranked as best of 179 countries in 2017.

Our self perception about issues like tax and infrastructure wasn't much better.

A degree of pessimism is also built into our fiscal and monetary policy settings.

Bill English was a champion of the grim outlook.

Asked about why we couldn't spend more and pay down debt more slowly, he would always fall back on the line that we'd soon need the money for the next crisis.

To be fair he had just seen us through a global financial crisis and a devastating earthquake.

English also came of age in an era when New Zealand nearly went broke — a time in the late 1970s and 1980s when New Zealanders were leaving in droves and our status as first world nation appeared to be at risk.

The economic shocks of that era rattled the nation and created a crisis of confidence that we still grapple with.

We've got a left-leaning Labour Party finance minister now in Grant Robertson but he's still highly focused on fiscal responsibility and debt repayment.

Robertson is my age (47) and just old enough to remember the worst of the economic meltdown in the 1980s.

Meanwhile, the Reserve Bank has had the official cash rate on hold at an historically low 1.75 per cent for more than two years now.

December GDP numbers might yet weaken to reflect that business gloom we've been hearing about.

But for now we're looking at an economy with a growth rate of 2.9 per cent, unemployment at just 3.9 per cent and inflation at 1.9 per cent.

Its not surprising that international analysts — when they bother to take a look at New Zealand — tend to take an upbeat view.

They run a ruler over those topline stats and throw us in the "all good" basket.

Goldman Sachs and Nomura Holdings did that after the Unemployment data and Monetary Policy Statement last week.

Both are picking the Reserve Bank will have to raise rates earlier as the economy rolls steadily on.

A lot of things have gone right for the New Zealand economy in the past few years.

We saw high dairy prices and a massive Chinese export boom see us through the GFC and Christchurch earthquakes.

And we became a popular place to both visit and live.

Just when it was all starting to overheat we've seen immigration rates and Auckland's housing market ease back.

But thus far they've both done that in a surprisingly orderly fashion.

Even our soaring stockmarket has eased back without a full-scale meltdown.

We haven't (touch wood) had a widespread drought for several years.

Soaring fuel prices threatened to blow out business and household budgets this year but now they've eased back sharply since October.

Is this just a lucky run — a series of fortunate events?

Yes and no. The way things have lined up for us certainly could have been worse.

But let's recognise the fundamental strength of this economy. It has solid foundations but remains flexible and is generally well managed — by pessimists on both sides of the political spectrum.

I don't want to see us let our economic guard down any more than I'd want to see the All Blacks prancing around like Italian football players when they score.

But I do think we should acknowledge that we tend towards a negative bias.

As a nation we can afford to be more confident now, take a few more risks and back ourselves to keep winning.