New Zealand has just suffered its biggest corporate collapse since 1989 and its biggest natural disaster since 1931. Both events have the potential to destabilise the economic recovery, but they won't.
There are 10 reasons to be cheerful after two weeks of gloom. They are also an antidote for those
who say I am a permanent harbinger of doom.
1. We are lucky to be next to the luckiest country.
New Zealand is lucky to have the luckiest country on the planet as its largest trading partner and nearest neighbour. Australia's economy just created another 53,100 jobs last month and it continues to benefit from China's insatiable appetite for raw materials. We have our own lucky attributes. Our water-rich land, fisheries and mineral resources are a real asset married to our stable political and legal systems.
2. We are in the Asian hemisphere.
New Zealand also has its own strong connections with an economy that is set to overtake America and become the world's largest by 2030.
China is now our second-largest trading partner.
3. Our economy is underwritten by Australian taxpayers.
Whisper it quietly when you're next visiting the relatives in Australia but we are lucky our banking system is owned by Australian shareholders and backed by its Government. The core of any economy is its banking system. Australia's taxpayers and savers proved they would underwrite our banks in October 2008 when they provided a guarantee and pumped in A$20 billion ($25 billion) worth of fresh cash.
4. We are learning our lessons.
New Zealanders have pulled their heads in after the excesses of the naughty noughties and are saving again. A Treasury paper out this week showed the ratio of household debt to disposable income is falling and consumers are more careful about repaying debt or saving before spending more.
5. The Government is reforming our tax system.
However slow the reforms are, our Government is trying to restructure the economy away from consumption and housing and towards production and exports. The increase in the GST, removing some property tax breaks and the reduction in income taxes will start to tilt the economy.
6. Hot money has dried up.
The global financial crisis and the introduction by the Reserve Bank of its Core Funding Ratio have combined to force our banks to source funding from local mums and dads rather than on wholesale money markets overseas. All this is helping to stop our foreign debt growing.
7. Many of our best are staying.
Talented technology entrepreneurs such as Sam Morgan and Rod Drury remain in New Zealand, reinvesting their wealth to build great new businesses such as Xero and the Pacific Fibre cable.
8. We are resourceful, creative and resilient.
The earthquake and our reaction since the global financial crisis has been to pull together and to get on with rebuilding with a minimum of social strife and disruption.
9. The world loves us.
Many New Zealanders underestimate how popular we are overseas. We're small enough not to be threatening. We're seen as innovative, open and friendly. We we can trade and collaborate on the strength of that good vibe.
10. Summer is coming.
<i>Bernard Hickey:</i> Kiwis, count your blessings
Summer is coming. Photo / Brett Phibbs
New Zealand has just suffered its biggest corporate collapse since 1989 and its biggest natural disaster since 1931. Both events have the potential to destabilise the economic recovery, but they won't.
There are 10 reasons to be cheerful after two weeks of gloom. They are also an antidote for those
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