KEY POINTS:
It was hard to remain optimistic this year. A survey of the Herald's daily leaders, or editorial viewpoints, in this column shows that we repeatedly hoped for the glass to be half full on the nation's economic slowdown. There is nothing wrong with refusing to join a stampede of negativism but circumstances repeatedly turned out to be darker than we dared anticipate.
Of the 315 editorials published this year, 14 explicitly addressed the country's response politically and through the Reserve Bank to worsening global credit markets and financial turmoil. Some of the 96 editorials published on politics in election year also, naturally, explored the appropriateness of responses to what has become the most challenging economic downturn here since at least the 1980s.
From January, when we observed that the Reserve Bank's decision to hold interest rates was correct because the global contagion "need not produce a significant economic struggle", there was support for Governor Alan Bollard's official cash rate judgments. In May, we urged Finance Minister Michael Cullen to be bold in his tax cuts as "this year is his rainy day" for which he had salted away taxpayers' monies. His Budget won our praise for relief broader than we had dared suspect. When Dr Bollard adopted a gloomy tone in June, this column asked if he was too negative and highlighted the remarkable resilience of the economy. The next month, we hoped that GDP figures might, belatedly, show that the worst will probably be past but, by September, recognised that the Reserve Bank's half-a-point cut to the cash rate showed the extent of our recession's bite. The dramatic unravelling of financial markets since October has and will have a significant impact on New Zealand as chances of a quick emergence from recession fade and that vital ingredient, confidence, stubbornly refuses to return.
Neither of the political parties won our support for their response to the credit crunch. National is yet to display decisive action in either fiscal cuts on one side or the stimulation of the economy needed to counter rising unemployment.
In politics this year, a government on the way out was the subject of 18 critical editorials here and nine in which we explicitly backed its actions or policies. Yet the challenging National Party was similarly held to account with six editorials supporting its stances before the poll and five since but 19 times being criticised. The new Prime Minister, John Key, was wrong, in our view to rule out asset sales and "made a rod for his own back" in adopting Labour's Working for Families scheme. In July, we advised him to look "beyond election day" in committing to such costly redistributions of tax. His failure to be straight on a series of issues was also a subject of criticism: "He needs to get his words under control and his mind up to speed." Yet by year's end, Mr Key had acted swiftly and with insight to form a broad governing arrangement with Maori and Act and he goes into 2009 soundly placed to deliver the needed boldness to help restore economic health.
Elsewhere, the issues demanding most comment were the US election, housing affordability in the early months before mortgage rate cuts and the falling market righted that imbalance, government interventions to stop the sale of Auckland airport, the emissions trading scheme (with National and Labour criticised in May for backing away from action but, in the new economic environment, we accept a "review" may be useful).
The economy might have worsened but there were two political bright spots. The Electoral Finance Act and the political abuses by Winston Peters and New Zealand First were each the subject of 10 highly critical editorials. The last on Mr Peters said, rightly, that the country had had enough. And the malign limits on electoral spending will be repealed.
