It's been a tough 2024 - time to take a break . Photo / 123RF
It's been a tough 2024 - time to take a break . Photo / 123RF
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.
Surely an economic recovery - however mild - should lift the nation’s spirits next year. We might even find that “mojo” the Prime Minister has been looking for.
It’s hard work mustering the traditional optimism required for an end-of-year, MerryChristmas, newspaper column when you’ve just been hit with the news that New Zealand’s had its worst (non-Covid) recession since 1991.
Perhaps I should step outside our immediate economic malaise to find some good cheer. But that just leaves space for divisive thoughts of “culture war” and worries about the social media madness rotting our children’s brains (and ours).
“Brain rot” was dubbed the Oxford University Press’s Word of the Year for 2024.
It sounds exactly like the kind of weird computer-born virus that might have featured in a dystopian 1970s or ‘80s sci-fi film.
Next year we’ll rule a line through the first half of the third decade of the 21st century. Of course, everything is weird and mixed up. What did we expect? It’s the future.
Things still aren’t as bad as Blade Runner, or Logans Run.
But if the trajectory of AI expansion keeps up we might yet make The Terminator look prophetic.
If you worry about our energy consumption or climate change woes, the path to a Mad Max world still looks plausible.
And they still haven’t caught the last four monkeys that escaped from the Alpha Genesis research facility in South Carolina last month (I looked it up) - so even that franchise is in with an outside chance.
Terrifying as all that tech and future stuff seems, at least it is pretty interesting. And I have noticed my children don’t seem so nearly as terrified by it.
It’s just life to them. So maybe I’m in danger of succumbing to that special kind of pessimism we all become vulnerable to as we age.
Did my parents and grandparents worry so much for my future in 1991, when we had a recession so severe it would not be repeated for 34 years?
I’m still not convinced that New Zealand’s economy is as utterly down and out now as it was back then.
Unemployment was much higher and peaked in 1992 at 11%. We’re currently looking at a peak of just 5.4% sometime next year.
Covid has delivered five years of economic turmoil. New Zealand in 1991 had been on a roll of regular recession and persistently high inflation since 1976. That’s 15 years of lousy economic news and political turmoil.
Perhaps the economy is as precariously positioned as it was then - at the very least it is in that ballpark.
I’m not sure why it even matters so much to benchmark everything to the past.
Sometimes, I’ll go and see a young rock band with my friend Dave. As much as I might enjoy it I’ll break them down into composite parts of older influences. “They’re good but they sound like The Smiths with Led Zeppelin vocals and New Order keyboards” ....or whatever.
My friend Dave will remind me: “Liam, they are young guys making music in 2024 - they sound like what bands sound like in 2024.”
Dave’s right.
But I think it is helpful in economics to frame things so we can calibrate the urgency and severity of our response. We didn’t have anything in living memory to benchmark Covid against. That was not helpful.
And that’s why we still pay attention to hopelessly flawed metrics like GDP.
Quirks of GDP measurement aside, we know things are looking grim. The Crown’s balance sheet is sinking deeper into the red.
The pressure for an economic overhaul is mounting.
Everyone seems to agree major changes are needed. But nobody agrees on anything beyond that.
Do we need Nicola Willis to pick up the Ruth Richardson mantle and cut spending harder, to try and get the Government’s deficit under control faster?
Plenty of economists and commentators believe we do. But there are also plenty who’ll argue the exact opposite - that spending cuts are deepening the recession reducing the tax take and creating an austerity doom loop.
Who’s right? Is it Keynes or Friedman? The same old economic debate, forever unresolved.
What about a moderate path? I’m pretty sure that’s what Christopher Luxon and his team have been aiming for, with very little reward for their efforts.
Prime Minister Christopher Luxon and Finance Minister Nicola Willis. Photo / Mark Mitchell
The internet has stacked the odds against the moderate. The amplification of extreme views from both sides of the political spectrum has become a feature of life in the 2020s - hopelessly naive woke opinions and hopelessly cynical anti-woke responses. Everyone enraged.
Who needs these words in 2025? Surely they’ve had their day.
I can’t offer up all the economic answers we need in this column. But I can tell you how to shake the weight of all that political division - at least for a while.
Get off social media. Get out in the real world, walk down to the dairy - or the campground shop - and buy a newspaper. Or read a book. Talk to real people, walk on the beach.
Suddenly the world doesn’t seem so bad, the future doesn’t look so grim. The next few weeks are a traditional time of recovery and renewed hope.
Don’t waste them worrying. All the big challenges will still be there next year.
Have a great break. Merry Christmas and Happy New Year.
Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.
