New Zealand

New Zealand should have a debate about its motorways. But by only talking about speed limits, we are having it back to front. Before discussing speed, we need to talk about the quality of our transport infrastructure.

Manufacturers and exporters have been complaining about the high Kiwi dollar for a long time. Opposition politicians are openly toying with the idea of changing the Reserve Bank’s mandate to manipulate the exchange rate downwards. The question is, if inflation targeting was abandoned in favour of managing the exchange rate, would it actually work?

There is a paradox: New Zealand would welcome skilled migrants, and there are a growing number of mobile high-potentials. But these people are not coming to New Zealand and are moving elsewhere instead.

Comparing Germany’s historical experience with New Zealand’s current dollar discussion, a few things become clear. A rising exchange rate certainly poses a challenge to exporters and manufacturers. But that does not mean that they will go out of business.

Of course political observers love the spectacle and drama of elections campaigns. But all this excitement is not an end in itself. Its real purpose is to constitute both a parliament and a government that do their jobs well. And for this reason, fixed four-year terms would improve New Zealand’s democracy.

As the New Zealand dollar reached an all-time high against the British pound and keeps rising against the US dollar, the euro and other major currencies, New Zealand manufacturers are renewing their complaints about the damaging effects of our strong currency. However, currency movements usually produce losers and winners. Just as domestic exporters suffer from a rising kiwi dollar, domestic importers benefit from increased international purchasing power.

In most markets, we are used to products becoming cheaper and better over time. Why should housing be any different? Perhaps we should think more about houses as homes, not primarily as a financial investment. Now that’s a radical thought.

The purpose of vehicle testing is safety – not creating employment. But as one of my favourite German proverbs goes: “If you want to drain a pond, you shouldn’t ask the frogs for permission.”