Ardern confronts a perfect storm: Inflation at its highest for 30 years; house prices unaffordable; rising fuel and energy costs — and that's without the impact of the Ukraine crisis which is sending prices spiralling even higher.
Central banks have indicated they have reached the limits of their arsenal to stimulate economies — as they did during the Covid pandemic — through low interest rates.
It's enough to make a political leader duck under the duvet for a day and watch an escapist series on Netflix.
There are no easy answers for political leaders.
Unfortunately, Ardern's rote response to thorny issues — sometimes the facts even — is to automatically "refute" or "reject" (often "absolutely" too) propositions put to her by interviewers or political opponents.
She is an intelligent politician and has plenty of guile when she wants to use it.
How refreshing it would have been if she had come better-armed to her interview with the AM Show's Ryan Bridge on Monday and simply agreed with him that New Zealand is facing a cost of living crisis — and announced that the Government would soon introduce some new transitory measures to assist Kiwis through the next period.
It was afterall entirely predictable that she would be challenged on the rising cost of living.
National leader Christopher Luxon had made the cost of living the centrepiece of his State of the Nation address promising to reverse Labour's tax imposts if his party wins the next election.
His party has since hammered the issue in Parliament's question time opting for the tried political strategy of ceaseless repetition. National's internal polling will have confirmed that this issue is a red letter one for New Zealanders.
But speaking with Bridge, Ardern simply acknowledged it was a tough time for many Kiwis, but stopped short of calling it a crisis.
"I wouldn't describe it that way, there is an impact that people are feeling undeniably but I wouldn't describe it in that way," Ardern said.
A survey by Consumer NZ has found the cost of living has become Kiwis' biggest concern. Photo / Sylvie Whinray
The upshot was she was ridiculed for taking too lofty an approach.
It was left to Social Development Minister Carmel Sepuloni to show some of that Ardern-style trademark empathy by acknowledging to RNZ that there is a cost of living crisis for many families, particularly those on low incomes. "Inflation is high, we know petrol costs in particular have skyrocketed ... they certainly will be feeling it, so I think for many families it is a crisis," she said.
Really, how hard was that?
The cost of living is skyrocketing. Inflation has hit a 30-year high; petrol's cracking more than $3 a litre and the timorous response by the Commerce Commission with its supermarkets inquiry is not going to reduce the cost of groceries and food significantly anytime soon.
A survey by Consumer NZ has found the cost of living has become Kiwis' biggest concern. The cost of living has now surpassed previous concerns such as Covid-19 and rising house prices.
The 1News-Kantar Public Poll released on Thursday underlined that many New Zealanders are switching support to National with the party registering 39 per cent voter preference ahead of Labour on 37 per cent; the first time the centre-right party has been back in the lead since early 2020.
Ardern still out-rates National leader Christopher Luxon. But her prime ministerial rating is the lowest since she took office.
Questioned on the poll results, Ardern did finally acknowledge that this was "one of the hardest moments" New Zealand has been through in many years, "We're in the peak of the pandemic; we have a global energy shock which everyone is feeling in NZ as a result of the war and Covid-related inflation and families are feeling it." But still not a crisis.
Other political leaders like US President Joe Biden are also confronting a similar perfect storm with the disparity between the cost of living and wage growth the top political threat to Biden and congressional Democrats as the 2022 midterm elections draw closer.
As the Wall St Journal reported this week, before the Ukraine crisis, economists and policy makers had been hoping for a peak in year-over-year inflation as supply chains heal from pandemic-related disruptions and the Federal Reserve begins an expected series of interest-rate increases. But the outbreak of war has supercharged prices for oil, wheat and precious metals, threatening higher inflation for longer.
The Journal also reprised analysis by former UK central banker Charles Goodhart that a seismic shift is under way in the world economy, one that fiscal stimulus and the post-pandemic recovery would only hasten. A long glut of inexpensive labour that had kept prices and wages down for decades was giving way to an era of worker shortages and hence higher prices.
With global debt at record levels and asset prices elevated, central bankers would struggle to tame inflation without forcing a deep recession. "A golden era for central bankers is ending and life will become a lot harder," was Goodhart's conclusion. Harder too for politicians and the rest of us.
