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  • rmacculloch

Trick question: Who's the Finance Minister of NZ?

One of the many extraordinary consequences of the latest Level 4 lockdown in the country is the dawning revelation that Grant Robertson is Finance Minister in name only. He is an Emperor with no clothes. With no power. Practically every economic policy is on hold. Why? Since the de facto Finance Minister is Chris Hipkins. In addition to being the Health Minister & Education Minister. As well as being de facto Immigration Minister. Yes, most issues related to our economy now depend solely on the virus response. Whether it be skills, migration, tourism, transport, even what type of business to start if you're an entrepreneur, and more. This has made predicting the future path of the Kiwi economy next to impossible.

Yet a very different state of affairs now exists in many other nations. The lockdowns world-wide last year can be classified more as short-run shocks, where temporary measures, like wage subsidy schemes, were used to deal with them. Now nations like the UK are moving back onto their long-run growth paths, in the context of a largely vaccinated population. In Britain, this new state of affairs partly arose out of battles between Chancellor of the Exchequer, Rishi Sunak, and PM Boris Johnstone, as well as the Minister of Health. Why? Since the Chancellor's job is to seek economic prosperity and that aim brought him into conflict with the PM and other ministers, who had different concerns.

Not so here. In the interests of party unity, Robertson has dared not to stand up for the economy. Instead he's ducked the issue of trade-offs by asserting there are none. By asserting that good (virus-related) health outcomes and good economic outcomes are perfectly aligned. Which is an admission he has little to offer in terms of economic policies. So if you want to try working out the prospects for the Kiwi economy, you're best to go ask Hipkins.



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