NZ should support needed reforms, not populist policies

After the ruling party, the National Party, was voted out in New Zealand's Sept 23 General Election, the country was in a state of limbo for almost a month.

Now, it has a coalition government formed by the Labour Party, the New Zealand First Party and the Green Party.

The new government wasted no time in announcing that curbs prohibiting foreigners from buying existing homes would be introduced, before having its first parliamentary sitting (NZ shuts door on home sales to overseas buyers; Oct 25).

Decades ago, New Zealand enjoyed one of the highest per capita incomes in the world but now, it is at the bottom among the developed nations in purchasing power parity income.

The International Monetary Fund ranked it at the 32nd position, just ahead of Italy and Spain, but one position below South Korea.

New Zealand experienced weak growth between 2005 and 2012, with net immigration averaging 7,446 a year. Since then, growth had picked up, pushing up net immigration to 22,468 in 2013, which peaked at 73,000 last year.

For many years, housing and other infrastructure developments had been grossly neglected. The curbs were a populist measure - a promise made during the election.

The measures would be brought up by Prime Minister-elect Jacinda Ardern in renegotiating the Trans-Pacific Partnership (TPP) in Japan next month. They may complicate the finalisation of the TPP.

In this increasingly globalised world, New Zealand has to decide if it wants to open up its economy and attract more direct foreign investment (FDI).

Its FDI stood at about NZ$100 billion (S$93.8 billion) in March 2015, compared with Singapore's $1.26 trillion in December 2015.

It needs to take a more holistic approach in tackling its social-economic issues - creating better jobs, infrastructure development, and handling labour shortages and immigration.

It needs to re-examine existing rules that inhibit the tackling of these issues and also the social welfare and taxation systems; and be decisive in making necessary reforms.

New Zealanders should bear with, and support, their government if it introduces unpopular but needed policies to elevate the nation to a higher stage.

Albert Ng Ya Ken