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| Dr Oliver Hartwich | Executive Director | oliver.hartwich@nzinitiative.org.nz | ||||||||||||
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Opinion polls have consistently told us for months that about two-thirds of the population believes the country is going in the wrong direction. The logical expectation would be a strong push for change. And yet, the same polls suggest a tight race. National and ACT had an opportunity to capitalise on widespread dissatisfaction with the state of the country. Judging by the polls, their campaigns have not achieved that. A major factor would have been their conflicting and sometimes contradictory messages leaving voters confused. National, for example, initially refused to discuss possible arrangements with New Zealand First. Then, just two weeks before the election, they changed their tune and opened the door to such discussions. But that was immediately followed by more reservations about working with them to the point of speculating about a second election. Winston Peters was the only beneficiary of all these speculations. He probably could not believe his luck. The opposition’s inconsistent messaging has been exacerbated by the media’s focus on personalities, coalitions, and various sideshows. This came at the expense of meaningful policy discussions. As a result, the New Zealand electorate has been short-changed; we have been denied the deep debates about the country’s future and the policies that might genuinely improve it. As voters prepare to go to the ballot box (if they have not voted early), two likely outcomes emerge: a National-led government, somehow supported by both ACT and New Zealand First; or a third-term Labour-led government, this time supported by the Greens and Te Pati Māori. While the latter scenario seems much less likely based on current polling, it cannot be ruled out. It only takes a few percentage points to swing to Labour and the Greens for Chris Hipkins to keep the keys to the Beehive. At this stage, the most surprising aspect of the 2023 New Zealand election is how close it is. Given the country’s many challenges and the degree of public dissatisfaction, one would have anticipated a political earthquake followed by a shift in direction. Instead, New Zealanders are left with uncertain choices at a time when a clear mandate for genuine reforms across policy areas such as education, law and order and the public service are sorely needed. Over the coming weeks, we will find out if we will at least get some of these reforms. |
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| Benjamin Macintyre | Research Assistant | benjamin.macintyre@nzinitiative.org.nz | ||||||||||||
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It does not matter if your sympathies lie with Palestine or Israel. It does not matter if you consider violent retribution as inevitable or even defensible. You either believe that there is no world in which the massacre of babies in their homes is acceptable, or you don’t. The Israeli-Palestinian conflict has been simmering, and sometimes raging, since the creation of the Israeli state in 1948. There is very little room for discussion. Both sides believe they are the rightful heirs to that stretch of the Middle East, and that they are battling invaders trying to strip them of their God-given right to sacred land. There is a long list of grievances deeply felt by both Israeli and Palestinian people. I will not do this sensitive topic a disservice by attempting to analyse them here. Some truths, however, transcend political and historical context. Music festival goers are not a security threat. Children are not a security threat. Babies in their cots are not a security threat. It is important, in times like these, to be wary of “whataboutisms”. The limelight has been turned, across much of social media, on the Israeli response and on past actions by the Israeli state. In normal circumstances, this discourse would be warranted. However, to bring it up now is simply to try and justify what happened last weekend. There is no justification for the butchering of families in their homes. If you agree with this, you should not use Israel’s actions to justify Hamas’s. This was not an attack on Israel. This was an attack on ordinary civilians just trying to live their lives. It is not just Hamas who are guilty of needless and tragic escalation. There are now multiple reports claiming that Iran helped plot the attacks on Israel. If true, that only further increases the risk of further regional instability. And for what? Hamas didn’t gain a military advantage or strike strategic targets. They simply murdered innocent people and guaranteed retaliation, which will rob both Palestinian and Israeli mothers of their sons and daughters. Perhaps this is the greatest tragedy of all. It does not matter if you think one side is right and the other is wrong. No one wins when children burn. |
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| Professor Christoph Schumacher | Adjunct Senior Fellow | christoph.schumacher@nzinitiative.org.nz | ||||||||||||
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GDPLive (gdplive.net) uses large amounts of daily transaction data from New Zealand companies and a machine-learning algorithm to track GDP in real-time for the country, regions and various business sectors. When the official values are announced, we compare them with our live values from three to six months ago. We put a red dot in our graphs to ensure everyone can see how good (and rarely bad) our live values are. A red dot represents the mean live value for each day during a quarter. We also use the official value to re-train our algorithm and analyse why we might have over or underestimated GDP. We tracked quarterly growth at 0.97 per cent during the year's second quarter. This was far more optimistic than the Reserve Bank of New Zealand forecast of 0.5 per cent. The major banks also predicted quarterly growth to be around the half per cent mark, so our value raised a few eyebrows. So, how did we do when Statistics New Zealand recently computed the second-quarter GDP growth rate? The officially announced value is 0.9 per cent. Yet again, GDPLive outperformed the forecasts of the RBNZ and the major banks. This is not a fluke, as in many quarters since we launched GDPLive, we got closer to the official figure than anyone else. As government agencies collect more data, official GDP values get revised. So far, revisions have always reduced the difference between our live value and the first-announced value, which reassures us of the accuracy of our tracking model. Combining daily data with an advanced machine-learning algorithm gives us an edge. With the high quality of our real-time data, we simply get a great snapshot of daily economic activity. Given the power and capabilities of artificial intelligence (AI) algorithms, it is surprising that government agencies have not added modern technology to their traditional forecasting models. GDPLive produces reliable real-time GDP and inflation values, which could complement the current process. Having access to real-time figures between official announcements would benefit decision-making and reduce the anxiety of official announcements. |
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| Dr Eric Crampton | Chief Economist | eric.crampton@nzinitiative.org.nz | ||||||||||||
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But the things Betfair can’t tell us makes me miss our missing election stock market. From 2008 through 2015, Victoria University hosted the world’s best election stock market, iPredict. The National-led government finally strangled iPredict in red tape. But it was glorious while it lasted. iPredict’s traders bought and sold contracts that paid out if different events happened. One contract might pay $1 if the election resulted in a Labour Party Prime Minister; another might pay $1 if New Zealand First re-entered Parliament. Prices on these markets are probabilities. Rather than relying on pundits’ reckons about what might happen, we could look at the collective wisdom of traders with real money on the line. The markets were accurate. If a contract traded at $0.80, it would pay out at $1 about 80% of the time. And because the market was local, new contracts could be launched whenever worthwhile. If iPredict were still around, we could have contracts on how long it might take to form a government after the election or whether it might go to a second election instead. It would at least help with summer vacation planning. If a government forms, whose would be the real coalition of chaos? We could have had markets on whether the next government would last until 2024, 2025, or 2026 – depending on whether National or Labour led it. And who really has the biggest fiscal hole? Trading on the size of government deficits for the next few years, with one set of contracts paying out in the event of a Labour-led government, and another for a National-led government, would tell us more than any party’s secret spreadsheets. Traders could have been betting on whether National’s ruling Winston in or out would affect New Zealand First’s chances of re-entering Parliament. The markets might have warned Luxon that saying Winston’s name causes him to appear. Instead, Kiwi election punters are stuck with foreign-based markets that only tell us whether a National-led or Labour-led government is more likely. And because Labour promises to ban offshore gambling and National promises to tax it, we might not even have that next time around. The only sure bet is that I’ll be pouring one out for iPredict on election night. |
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