In New Zealand, the prices of eggs have been rocketing. A carton of a dozen soared 47% in the country’s food price index over the 12 months to February, to almost R90.
It wasn’t just the fault of the pandemic-driven pressure on supply chains and inflation that has been pushing up food prices globally. It was all of these, plus legislation passed in 2012 to phase out cage-farming of battery layer hens — at that time accounting for as much as 86% of the total — that left the country 300,000 hens short of what the industry estimated it needed to stabilise supply.
While it wasn’t even a change made under the Labour government — the legislation was passed under the conservative former National Party and phased in over more than a decade — it is yet another of the challenges facing Prime Minister Chris Hipkins ahead of a general election planned for October 14.
Former prime minister Jacinda Ardern — who ceases to be an MP at the end of this month when she vacates her Mount Albert electorate in Auckland (which includes Eden Park rugby stadium) — did her bit to burnish Hipkins’ man-of-the-people image in her final speech to parliament.
“In the aftermath of Cyclone Gabrielle I called Chippy to see how he was. I could hear he was on speaker phone as he described another busy day. ‘What are you up to now’, I asked. ‘I’m making the kids’ lunches for tomorrow’,” she recounted him saying.
“He then went onto describe in quite some detail what he was planning to put into each corner of their bento box. It’s fair to say, he lunch box shamed me.”
But it’s unclear how effectively Hipkins will be able to push the ordinary-guy line as the country’s economic crisis worsens. A day before Ardern’s final parliamentary speech, one measure of the country’s mortgages in arrears rose for a seventh straight month to hit a three-year high. That same week the Reserve Bank of New Zealand lifted the benchmark lending rate a more-than-expected 50 basis points to 5.25%, raising the chances of a recession in the Pacific nation’s economy.
While nearby Australia has slowed its pace of monetary policy tightening, New Zealand faces a more complicated inflationary picture as a result of February’s devastating tropical Cyclone Gabrielle, the country’s worst storm so far this century. Recovery costs from the cyclone, which killed 11 people, could be close to the R146bn cost of the Canterbury 2011 earthquakes.
You can’t bake a pavlova without breaking eggs, and Hipkins, trying to whip up a palatable feast for the electorate in October, has been demolishing the big-picture social policies that characterised Ardern’s leadership in a bid to reshape the country’s political discussion around cost-of-living issues.
In February he scrapped a planned merger of the country’s public television and radio broadcasters. He has ended a controversial water reform policy that would have largely taken control away from local councils and replaced it with a new scheme that seeks to balance Māori waterways management and local authorities’ rights.
Hipkins scrapped a 2021 policy to develop a local biofuels industry, saying it would push up the price of fuel for households, scrapped environmental policies such as a clean-car upgrade scheme and a clean-car leasing scheme for low-income families, delayed legislation that would have limited alcohol sponsorship of sport, and held off on legislation to lower the voting age from 18 to 16.
He also put off a planned national insurance scheme for workers made unemployed that was to be funded by a levy on both employers' and employees’ wages. And he extended a 25c/l fuel excise duty cut that was due to end in January until June, and also extended half-price public transport fares until June 30.
Last week, Hipkins — who under Ardern premiership led the country’s Covid-19 response — announced that New Zealand would keep its policy of seven days’ isolation for people with the disease. Australia shed most of its isolation requirements in October.
Hipkins said the government would take another look in June at what he called a “difficult balancing act”. One thing to balance will be the Fifa women’s Soccer World Cup, which New Zealand is hosting jointly with Australia and kicks off on July 20.
From then it’s just three months, with a deteriorating economy, until the election. He’ll be hoping he can clean up. Otherwise, he’ll be left with expensive egg on his face.
• Bleby is a senior reporter with The Australian Financial Review, based in Melbourne.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.