It’s bad enough losing the rugby, but in 2014 Australians will have to suffer Kiwis getting uppity about their economy as well.
While our economic growth is stuck around 2.5 per cent, there’s talk New Zealand could be doing double that by the middle of the year.
For so long the poor cousins across the ditch, it’s the Kiwis’ turn to ride the China resources roller coaster, with all the fun and fear that can engender. The commodity is different but the fundamental story is much the same as the China boom that lifted Australia over the past decade.
What iron ore and coking coal did for Oz, milk powder is doing for New Zealand. Forget the clichés about New Zealanders and sheep – it’s cows that are making Kiwis feel good now, as well as the All Blacks having an undefeated year.
And they are feeling good. An ANZ bank survey this month found NZ businesses the most confident they’ve been since 1994. House prices and wages are rising and consumers are spending more – the government is expecting consumption growth of 2.8 per cent while Australia struggles to manage 2 per cent.
New Zealand’s terms of trade are at their highest since 1974, giving the average Kiwi sharply stronger buying power. It’s not so expensive for Kiwis to visit the relatives in Australia – but the land of the strangled dipthong is no longer a cheap holiday for Australians. The Kiwi dollar started the year above $1.26 to the Aussie. It’s finishing at $1.09.
Thursday, January 2, 2014
The Aussies are jealous
Normally, Australians like to think that their poor relations on this side of the Tasman Sea are jealous of them. But as Michael Pascoe notes in the Sydney Morning Herald's BusinessDay, even the Ockers are getting green-eyed at New Zealand's economic success; Pascoe opines: