NZ’s turn to ride commodity wave

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.

One Response to NZ’s turn to ride commodity wave

  1. Gravedodger says:

    Sadly now that the simple sheep loving people over the ditch have threatened to make the “Lucky Country” look a little bereft of luck, there is a growing undercurrent of ignorance based resentment beginning to permeate political and social discussion.

    Look listen learn is being replaced with blame, legislate and deny.

    Don’t ever forget two things, their Labor party is to the right of the NZ outfit, quite broad church and their unions are very powerful politically entrenched and bloodyminded to boot.
    Corruption and union graft still are major impediments, some of their union based thugs makeour now long gone Finton Patrick Walsh, Bill Anderson, Frank Barnard and Jim Knox look like lay preachers.
    Have a read of the Gillard, Wilson, Slater and Gordon shennanigans, particularly the horrendous attack on Bob Kernohan.

    Maori violence, perceived easy admission for migrants, reduced cheap holidays, job and income security and cheap food sources have all made recent headlines in the aussie press.

    Far too many see no fault in the ALP for Holden Ford, SPC, Quantas, all disasters carrying the when not if outcome threat.
    Sheesh The A(LP)BC and Fairfax have cancelled Abbott’s honeymoon well under the 100 days he might have expected.
    Coles and Woolworths are coming under increasing pressure as their cosy little number is challenged by US based Costco.
    Much of their flagrant policy stupidity may yet cause severe disruption to the tranquility they have masked global reality with for too long

    The psyche of the average Australian is a very fragile thing and they do not take setbacks with the same alacrity they take kudos.

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