John Key, New Zealand’s new Prime Minister, is riding high in the polls. His National Party is scoring 56% in a latest opinion poll and 69% of New Zealanders are saying that their country is ‘heading in the right direction’. Just 18% say it is going in the wrong direction.
Mr Key is achieving this without copying the activist spending policies of Washington, Tokyo or Canberra. In an interview with the Wall Street Journal he sets out some of the beliefs that are guiding him:
- Limited, focused government: "There is actually a limit to what governments can do… Your citizens are entitled to expect you to be realistic… to be specific about what it is you’re going to do, what you can or can’t do."
- Control of government spending: He has decided not to copy "risky" high-borrowing policies to help New Zealand weather the economic storm. The only thing sure about such policies, he says, is that "you’ve saddled future generations with an enormous amount of debt that then they have to repay."
- Lower corporate taxation: "If you really are out of whack with the prevailing corporate tax rates, and there’s been a global shift toward countries lowering their corporate tax rate, then you’re not likely to attract capital, or you’re likely to lose capital."
- Lower regulation: "Good regulatory reform can be an important catalyst toward driving economic growth and coming out of the recession faster." The WSJ’s Mary Kissel notes how Mr Key is "chipping away entrenched regulations that drive away foreign capital". He is also reviewing the previous Labour adminstration’s heavy-handed climate change regulations; "New Zealand needs to balance its environmental responsibilities with its economic opportunities, because the risk is that if you don’t do that — and you want to lead the world — then you might end up getting unintended consequences."
- Free trade: "The world, whether we like it or not, will become more and more borderless."