Massive popularity isn't always a good thing. Photo / File
Massive popularity isn't always a good thing. Photo / File
Opinion by Liam Dann
Liam Dann, Business Editor at Large for New Zealand’s Herald, works as a writer, columnist, radio commentator and as a presenter and producer of videos and podcasts.
I'm sure the risk isn't lost on our alternative-music loving Prime Minister and Finance Minister, who'll hopefully be pinching themselves about last week's polls.
Without an effective opposition, it is more crucial than ever that they stay open to external ideas and work with business to rebuild the economy.
There are some grim economic numbers stacking up against us but I think we can beat them if we get the balance right.
The Government needs to be sure it listens to its critics and doesn't turn the dials up to 11, like Spinal Tap did.
One thing that the gloomy economic forecasts often fail to account for is the adaptability of people.
It is our greatest strength as a species. But it's also intangible and difficult to factor into an economic outlook.
On top of the big variable economists already face - the length and severity of the Covid-19 pandemic - they are dealing with multiple variables about how our behaviour might change as we adapt to it.
So that's one of the reasons I remain optimistic about the longer-term prospects for New Zealand's economy – and the global economy – despite all the obvious bad news coming over the next year.
All over the country, individuals are reassessing the world and reshaping their pathways in response.
It's happening at a micro-economic level which is often not apparent until all those individual actions are added up and crunched into big data trends.
One of the problems with the kind of radical change we've just seen is that it highlights the lag in the collection of our most macroeconomic data.
Crucial information about unemployment and gross domestic product (GDP) is months out of date by the time it is collected, reviewed and published.
That doesn't matter too much when the world is moving in an orderly manner and the monthly and quarterly variations are slight.
The kind of shock we've just seen has created a clear break.
Anything recorded prior to lockdown and the border closures in late March is now redundant - almost from another world.
In the past week, I've been talking to economists about how we measure the way forward.
They've all narrowed their focus to fast-moving data which provides more immediate clues to progress.
Jobseeker benefit applications (what we used to call the dole queue) and job ads, electronic card transactions, the number of trucks on the road - all offer some insight into how the economy is tracking now relative to where it was.
But picking trends requires some subjective judgements - sometimes educated guesses.
It's not that the notion of behavioural change and adaptation is lost on economists.
It just that it is hard enough to pick consumer big trends, let alone subtle social and cultural shifts.
So economists deal in the facts they have and keep an open mind about changing their forecasts quickly as required.
We should hope that our extremely popular government maintains a similar stance.
The Government needs to be sure it listens to its critics and doesn't turn the dials up to 11, like Spinal Tap did.
It's done a good job in crisis mode but overwhelming popularity presents a threat to good judgement.
Warning governments about trying to pick winners in the business world is hardly original.
They aren't great at it, as those on the Right of the political spectrum love to point out.
But it's also foolish to invoke Darwinian notions about survival of the fittest - as some on the Right do - without recognising that human success is founded on the evolution of traits like compassion and social bonding.
What's required from government, in the first instance, is to cushion the blow of big events and ensure that good people aren't overwhelmed and wiped out in ways that limit their ability to rebound.
We've seen many businesses pivot and shift operational focus to cope with lockdown rules.
But we know the immediate economic crunch is so big that even some of the best will fail.
How we look after those who lose their businesses and jobs will determine the strength of our recovery.
So far the Government has handled this part well. And its message on the path forward sounds solid. That's been rewarded in the polls.
From now though it gets more complicated.
The balancing act around government intervention in the economy is delicate.
It needs to foster and encourage New Zealanders to grab opportunities.
That might mean more financial support to shift focus and invest in new strategies.
But perhaps most important is ensuring that the Government does not get in the way of people doing that.
Getting the recovery balance right is going to require a good deal of trust between business and government.
It looks increasingly clear that the public is prepared to put its trust in the Ardern-Robertson double act.
As they work towards that difficult second album, here's hoping they stay focused on the balance of social values, fiscal responsibility and pragmatic policy that has made them a great combo so far.
