NEW ZEALAND LETTER:The feelgood factor from the Rugby World Cup will boost the National Party in the upcoming election – especially if New Zealand win
NEW ZEALAND is in many ways similar to Ireland. It has almost the same population as the Republic (4.316 million), a big neighbour which acts as a safety valve in difficult times, and it hopes to win the Rugby World Cup.
It is an understatement to say New Zealand is obsessed with winning its first Webb Ellis cup since the inaugural tournament in 1987. It means so much that the New Zealand government has agreed to meet two-thirds of any loss incurred by hosting the tournament.
With lower than expected numbers travelling from overseas, and less than stellar ticket sales for many games, that loss is set to be NZ$39 million (€23 million).
But the World Cup is still expected to inject about NZ$700 million into New Zealand’s economy, boosting gross domestic product for the quarter by 1.4 per cent.
The current National Party-led government, which came to power in 2008 after three terms of a Labour-led government, is facing re-election immediately after the World Cup. It won three years ago on a platform to catch up economically with Australia, where wages are 30 per cent higher – a factor that has resulted in a “brain drain” of skilled and educated young people.
The National Party took power in the midst of the unfolding global financial crisis and New Zealand, like every developed country bar Australia, went into recession. However, it guided the country safely through the worst of the downturn and at the start of this year it looked like it was heading for a budget surplus.
But the devastating Christchurch earthquake in February, which killed 181 people, will cost the government about NZ$8billion in the coming years. New Zealand’s budget deficit this year will be 8 per cent of GDP, and any short-term hope of catching up with Australia is gone.
New Zealand finance minister Bill English has done an about turn on his party’s election promise and is now trumpeting the country as a low wage economy.
To some extent, it’s working. There are so many films being shot around the capital, Wellington – with local legend and Lord of the Rings director Peter Jackson having a hand in several of them – that it’s now routinely called Wellywood.
The Hollywood moguls are said to refer to their Kiwi workforce as “Mexicans with cellphones”, but nobody cares much so long as they get paid to make movies.
The low wages are not deterring emigrants, with many young Irish people making the 18,000km (11,200-mile) trip. About 30,000 Irish have obtained New Zealand work visas in the past decade, with the frequency increasing since 2008.
There are three Irish bars in close proximity to each other in Wellington (where, recent form notwithstanding, the Irish team, due to arrive tomorrow morning, are hoping to play a World Cup quarter-final).
Murphy’s pub, appropriately, has some Corkonian staff. One of them told me she left a restaurant job at home because she was bored with the daily conversation in Ireland being about nothing but the economy. “I’m over the recession,” she said.
Despite the difficulties caused by natural disasters and continuing global financial uncertainly, New Zealand’s unemployment rate is 6.5 per cent – the 12th lowest among the 34 OECD countries and well below the OECD average of 9.2 per cent.
Recent polls have put the National Party on 54 to 56 per cent and it is on track to win a majority in the November election. If so, thsi will be the country’s first majority government since the mixed-member proportional (MMP) electoral system was introduced in 1996.
MMP means two votes, one for a party and one for a local candidate. Parties that get 5 per cent or more of the party vote are entitled to a share of the 120 seats.
If a party gets below 5 per cent it can still get members elected from the party list if they also win a general electorate seat. There are 63 general, seven Maori electorate and 50 list seats.
Labour hoped to gain ground in straitened times but is instead likely to lose seats.
Its case is not helped by comments such as those of west coast MP Damien O’Connor, who earlier this year attacked the “gaggle of gays and self-serving unionists” which he says dominates party decision-making and alienates ordinary voters.
The main reason the National Party, under prime minister John Key, is so far ahead is the government’s assured handling of the aftermath of the Christchurch earthquake.
The government will also be helped by the Rugby World Cup feelgood factor, especially if New Zealand can win. They won the 1987 final in Eden Park, Auckland, where this tournament’s decider will also be held.
Despite economic difficulties, New Zealand’s quality of life remains high. The Legatum Institute index – a measure of material wealth and happiness among 110 nations – rates New Zealand fifth.
For Kiwis, the only possible sticking point is that Australia rates fourth.
