Inflation backlash shows Fortress New Zealand is not a sustainable strategy – Stuff

Dileepa Fonseka is a Stuff writer on business and politics.

OPINION: Norman Kirk once said people need somewhere to live, someone to love, food and clothing.

But if they cant afford their rent or groceries, their clothes from ASOS are sitting in a warehouse waiting to be shipped, and their loved ones havent been able to get through the border in a year, then they are unlikely to be happy about it.

Those four needs were part of a no-frills vision of political desires during a much simpler time, but there are increasing signs we should add another need to that list: the need to play a meaningful part in the wider world.

Enough column inches have been written about the recent One News/Kantar poll to fill a mega container ship waiting off the coast of Long Beach, but another part of the poll has received significantly less attention: a major sea change in how New Zealanders feel about letting people through the border.

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One News reported 75 per cent of New Zealanders want the borders open to tourists and visitors (provided they are vaccinated) - a big philosophical shift.

Before the pandemic, and even before Labour came to power, a real move against globalisation was taking place, and New Zealand was no exception.

The United States voted for Trump, the United Kingdom voted for Brexit, and in New Zealand we voted for the promise of restricting tourism, protecting workers from global capitalism and lowering house prices by locking foreign buyers out.

John Raoux/AP

A wave of anti-globalisation sentiment was sweeping the globe in the years before the pandemic.

As former Deputy Prime Minister Winston Peters put it on the day he signed on to support Labours first term: "Far too many New Zealanders have come to view today's capitalism, not as their friend, but as their foe."

The currents of anti-globalisation were running so strong back in those days that then-Treasury Secretary Gabriel Makhlouf made a point of defending globalisation at a public lecture at the University of Canterbury in 2017, shortly before the new Government came to power.

"If an economy shuts in on itself, it also shuts down opportunities to raise living standards,

"And the smaller the economy, the fewer the opportunities to improve those living standards."

He said New Zealand had a choice: "The big question is, how should New Zealand respond put up barriers or build bridges?

The pandemic was the perfect opportunity to put up barriers, a regime of controls soon to be summarised by epithets like Fortress New Zealand or the nice, kind hermit kingdom.

NZ PARLIAMENT

Reserve Bank governor Adrian Orr discusses the level of concern about inflation in February.

With the borders closed, and international travel severely restricted, the country did not have much choice but to look within its own borders for opportunities to grow the economy and provide the things we needed.

So, wages went up, people got promotions, but then they began to experience the other side of that equation.

Yes your wages might have gone up, but now you had to do the work of two people, because if you didnt do it then no one else would.

Two years on, a survey of 900 workers by Frog Recruitment finds 68 per cent of workers are feeling burnt out.

Sydney Sims/Unsplash

Salaries have gone up, but people are also feeling the stress of burnout from working harder.

To make matters worse, the price of everything has gone up, eclipsing these hard-won salary gains.

The sectors where prices have gone up the most have been protected from globalisation too.

A recent Commerce Commission study shows the grocery sector has effectively managed to lock out global competitors from entering the marketplace through land covenants.

And in the building materials sector, New Zealand-specific standards limit the importation of foreign materials that are regarded as high-quality in other markets like the United States.

While global supply chain issues have taken centre-stage recently, not all the blame falls on globalisation: a record number of ships passed through the Suez Canal last year, and global manufacturing output was up 11 per cent (a record high).

One of the largest bottlenecks has been nation states and their lack of landside infrastructure to handle these increased loads. This is not a function of globalisation, it is a function of Governments who are too miserly to build a railway or a road.

Suez Canal Authority

A record number of ships passed through the Suez Canal, despite the Ever Given incident.

One poll question in isolation doesnt make a trend, but you can see it in the way other debates are taking shape.

You can trace the shift in sentiment back to John Keys opinion piece on the need for the country to open up, you can even see it in support for Christopher Luxon, a former chief executive of Air New Zealand who is unlikely to be in favour of shutting borders.

As for the TikTok generation, after seeing the world on their phones for two years, many now just really, really want to get out of here.

Unfortunately right now we have little say around how globalisation evolves we have little influence over Chinas zero-Covid strategy that is locking down ports, or Russias war in Ukraine.

The public is getting a greater appreciation for globalisation right at the point when they have the least choice about it.

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Inflation backlash shows Fortress New Zealand is not a sustainable strategy - Stuff