For several years we’ve looked across the Tasman as Australia boomed on the back of Chinese demand for its minerals.
It’s now New Zealand’s turn:
. . . 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 cliches 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.
But it’s not only dairying and the All Blacks doing well.
. . . 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. . .
While our Treasury forecasts Australia’s unemployment will nudge up to 6.25 per cent, New Zealand’s is 6.2 and falling from a high of 7.3 last year, twin factors that can be expected to reduce the usual migration flow. Australia has done well out of its Kiwi migrants. Given the direction of the New Zealand currency, we might have left it a wee bit late to stock up on five-eighths and sauvignon blanc. . .
Trans-Tasman rivalry is usually pretty good natured.
But while we can enjoy our moment in the sun, we shouldn’t forget that Australia is our second biggest market.
Beating them because we’re doing well and we’re doing better is to be celebrated. Bettering them because they’re going backwards is bad for both of us.