Australian journalist critical of Jacinda Ardern, New Zealand economic direction defends column

An Australian journalist who said Jacinda Ardern was "pushing the NZ economy off a cliff" says he was frustrated by the praise being heaped on the nation and wanted to point out its flaws.

Adam Creighton, economics editor at the conservative newspaper The Australian, wrote a column on Wednesday lambasting New Zealand's economic direction under Ardern. 

He claims "public finances are in tatters" due to tourism being obliterated, points out the country's issue with productivity, and says public debt is about to explode.

Finance Minister Grant Robertson responded to the column on Thursday saying productivity has been an issue for New Zealand under successive Governments.

The tourism downturn and projected jump in debt can largely be attributed to the COVID-19 pandemic which has required border closures and an unforeseen spending increase. 

Speaking to The AM Show on Friday, Creighton admitted productivity has "been a problem in New Zealand for some time". 

"It is also a problem in Australia, mind you, I am certainly not ruling that out here. Nevertheless, all the praise heaped on Jacinda seems to ignore these basic economic facts, that on some critical measures New Zealand is getting worse, and productivity is one of those," he said.

"I think it is fair - the Ardern Government now has been in power for almost three years - it's reasonable to point out the problems with productivity I think."

In his column, Creighton called New Zealand's response to COVID-19 "draconian". He said despite New Zealand being an island with a "massive moat and a small population spread over an area the size of Italy", the "stringency of its lockdown was higher than practically any other country, according to Oxford University’s Blavatnik School of Government".

The writer told The AM Show he was motivated to write the column after seeing the immense international praise being heaped onto Ardern during the pandemic. 

"It always frustrates me when someone attracts so much praise, there must be some otherside. My role as a journalist is to point out the faults or the flaws. I think there are flaws within New Zealand's response to the crisis that needed to be pointed out. The economic costs of the shutdown are just extraordinary."

Creighton said he loves New Zealand and maybe the focus on Ardern was "partly jealousy".

"She is one week younger than me and she is running a country, and I am not. She is an extraordinarily successful woman and she is very likeable, that is so clear, but I just worry that that likeability means people ignore the actual policies the Government is pursuing." 

He said Aotearoa had seen excellent success in terms of the number of COVID-19 cases and deaths, but those figures were "exactly the same as Australia's", which didn't introduce restrictions quite as tough as New Zealand. 

Per capita, New Zealand and Australia do have very similar case and death rates. But in April, New Zealand epidemiologist Sir David Skegg cautioned comparisons between the countries, saying Australia's hospitalisation rate was far higher.

In a Market Outlook released on Monday, BNZ said New Zealand's unemployment rate is forecast to jump from 4 percent in the fourth quarter of 2019 to 6.3 percent two quarters later. In comparison, Australia's is projected to grow from 5.1 percent to 11.7 percent over this time. However, the outlook noted that after New Zealand's wage subsidy runs out for some businesses in June, unemployment here is expected to continue to rise until peaking at just under 10 percent in September.  

On debt, Creighton told The AM Show it was also a problem for Australia where "it's going to explode as well". 

"But it is not going to explode to the same extent as in New Zealand. I think in Australia it is going to go, combined state and federal net debt, to 40 percent of GDP."

"I was just shocked when I looked at the figures, that it was going to go from 19 to 54 in just such a short space of time. New Zealand is a lot smaller than Australia… I am just worried a small country is going to put itself in a difficult situation in a few years with such enormous debt."

He said he didn't have a "crystal ball", but believed New Zealand would likely be worse-off in the long run. Like in his column, he expressed surprise that New Zealand was banning future offshore fossil fuel exploration - a decision made in 2018 - as that would help the export sector. 

"I can't be 100 percent sure [who will be worse off]. The smaller the country you are, the more careful you have to be about your fiscal situation and also things you rule out arbitrarily. Australia is not a huge country either, and I have been very critical of the Australian Government, just as I have of the New Zealand Government in that column."

Finance Minister Robertson told MagicTalk on Thursday that while he hadn't read Creighton's column at that point, from what he had heard "I'd disagree with a bit of it - but obviously people are entitled to their opinion". 

The Government has always defended the lockdown strategy, saying the best economic approach was to keep Kiwis healthy and able to work. It's tried to keep New Zealanders in jobs through its $11 billion wage subsidy scheme.

The BNZ Market Outlook said while Australia may come through the COVID-19 shock better than New Zealand, that wasn't necessarily the fault of policymakers, noting how New Zealand relies on exports and tourism more than our friends across the ditch, the severity of the lockdown and the ongoing drought.

"This being so, we reiterate that relative performance of the two economies is much more complex than a simple comparison of the perceived rights and wrongs of the policy mix of the respective governments."

Newshub's latest poll showed nine-in-ten New Zealanders backed the Government's call to put the country into lockdown.