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| Dr Oliver Hartwich | Executive Director | oliver.hartwich@nzinitiative.org.nz | ||||||||||||
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Trump’s victory reflects many Americans’ frustrations with living standards and inflation during the Biden-Harris administration. Vice President Kamala Harris struggled to connect on these issues. Her campaign focused more on Trump’s legal troubles than on a clear economic plan of her own, leaving many voters unconvinced. Yet Trump’s own economic programme also contains worrying contradictions. In his first term, he ran substantial deficits through tax cuts and increased government spending. This was hardly the free-market approach he had promised. Instead, it was old-fashioned deficit spending. Now he is pledging to do more of the same, but on an even grander scale. Trump has proposed steep tariffs on imports. These would reach 60 percent on Chinese goods. Other trading partners face tariffs of 10-20 percent. These measures would slow international commerce. The resulting higher consumer prices could cancel out any positive effects from his planned tax cuts. America’s public debt already stands at eye-watering levels. It exceeds 120 percent of GDP. For now, the United States enjoys what economists call an “exorbitant privilege”: It can borrow extensively in its own currency because the US dollar is the world’s reserve currency. But even this privilege has limits. This is especially true if trading partners seek alternatives to the US dollar in response to aggressive tariffs. There are lessons for Trump from Liz Truss’ brief and ill-fated period as British Prime Minister. Her attempt to cut taxes while increasing spending caused a fierce market backlash, ending her tenure within weeks. America’s reserve currency status provides far more protection than Britain ever enjoyed. Yet even this shield has its limits. Trump’s proposed fiscal irresponsibility dwarfs Truss’s experiment. Trump’s trade plans would have major global impacts. His tariffs could reduce GDP in the European Union by 0.6% and cut China’s growth by over two percentage points. New Zealand is heavily reliant on trade, and Trump’s deglobalisation policies threaten our export markets. Their impact on global growth will weaken international demand for our exports. Strengthening our fiscal position and diversifying our trading relationships beyond traditional partners are urgent priorities in this new economic landscape. Regardless of political promises, economic realities are inescapable. Trump’s “golden age” will more likely turn out to be a dark age if his strategy is based on deficit spending and trade wars. |
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| Dr Michael Johnston | Senior Fellow | michael.johnston@nzinitiative.org.nz | ||||||||||||
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One reason the uptake of apprenticeships by New Zealand school leavers is so low is a cultural narrative that holds university education in much higher esteem than training for a trade. The University Entrance qualification illuminates the way to university, but there is no qualification to do the same for trades. The senior school curriculum is likewise geared to the university pathway. That simply does not work for many students. Last week, I visited six Busy Schools campuses in Brisbane. Busy Schools is a not-for-profit organisation that caters to young people who have disengaged from mainstream education. Many come from troubled backgrounds. Some are homeless. Some simply found themselves aimless and unmotivated in their previous schools. Busy Schools aims to make its students employable when they leave school. They emphasise pathways into apprenticeships. Both State and Federal Government provide funding. Students start by completing work-readiness education while undertaking a half-time school curriculum. Employment Pathways Advisors then find them internships in local businesses. From there, they spend two days per week at school and two in the workplace. Initially, internships are unpaid, but when students have proven themselves, many secure paid part-time apprenticeships, which they complete fulltime after leaving school. While still at school, apprentices also attend tertiary training institutions one day per week. The Busy School model meets students where they are and shows them possibilities they never knew existed. It then prepares and supports them to make the most of their newfound opportunities. New Zealand could benefit from a similar model. The charter schools initiative to be launched in 2025 is one possible avenue. However, there is nothing to stop mainstream schools from adopting similar approaches. A Certificate of Trades Preparation would also be a welcome addition to our school qualifications system. A forthcoming report for The New Zealand Initiative will make proposals for a more coherent focus on apprenticeships in our senior secondary schools. Such a focus would benefit our economy. More importantly, it would offer purpose and opportunity to students who are not motivated by or cut out for academic study. |
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| Roger Partridge | Chair and Senior Fellow | roger.partridge@nzinitiative.org.nz | ||||||||||||
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This exclusive club, located in discreet corners of Australian airports, is now at the centre of a political storm. Qantas, has long enjoyed a certain regulatory harmony with the government and offers a remarkable array of privileges to certain favoured guests. Its unmarked doors ensure that ordinary passengers never witness the inner sanctum where the nation’s future is shaped. Membership of the Chairman’s Lounge is not something one can buy or acquire through loyalty points or business-class desperation. Rather, Qantas seems to reserve its best welcome for Australian politicians and officials. Former Qantas CEO Alan Joyce once said it was “probably the most exclusive club in the country.” Prime Minister Anthony Albanese, it has emerged, received at least 22 free flight upgrades during his time as Transport Minister. He has assured the Australian public that this had absolutely no bearing on his government’s recent decision to deny Qatar Airways additional flights to Australia. In a twist worthy of any good satire, even Australia’s anti-corruption leaders are on the Chairman’s Lounge guest list. Presumably, the comfort of first-class seats helps them keep a close watch on integrity. The timing of these revelations could hardly be worse for Qantas. The airline has been busy this past year, misplacing luggage, cancelling flights, and charging passengers what might politely be called “optimised” fares. Yet, they have their priorities in order, finding the funds for this invitation-only club. It now counts more than 90 per cent of federal MPs among its members. Qantas may consider all passengers equal, but clearly, some are more equal than others. In a noble show of principle, several independent MPs have given up their Chairman’s Lounge access in protest, gaining public admiration while, no doubt, puzzling their colleagues. Perhaps the most extraordinary thing about this affair is the rare unity it has sparked among Australians. Few events so consistently bring politicians, airlines, and the public together in shared outrage. As New Zealanders, we can only watch this spectacle with bemusement. After all, our parliamentary perks are far more modest. Perhaps that has something to do with our Air Force still trying to get its Boeing 757 off the ground. |
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