We are now seeing New Zealand Prime Minister, Jacinda Ardern's major weakness. She's good at media stuff, smiling and looking pleasant but when it gets hard and the issues are deep, she can't handle it. All she thinks about is whether the decision will be popular or not. How do I know this is how she thinks? She's got a team on Twitter constantly saying exactly that. Banning oil and gas exploration will be seen as widely popular they say. There is no evidence for this thinking mind you, but that's obviously how she thinks.
Thing is, we're talking real-world stuff here. This is playing for keeps, decisions have consequences. And with some decisions it doesn't matter whether they're popular or not, they just have to be taken.
A hard decision would be to embrace the oil and gas exploration industry and I'll tell you why: it has to do with sovereign risk. Since the Second World War, NZ has begged oil companies and their investors to come to NZ. Note I say begged. The world is a big place and these investors could go anywhere, but a few listened and they turned up. They'll now be regretting they did.
When that money departs, it will never return. Investors have memories and they won't forgive easily. In future they'll say thanks but no thanks. That is if they even answer the call. And don't think this rebuff will be limited to just oil and gas. There will be spillover into other sectors as well.
When the next financial crisis hits, NZ will be left swinging in the breeze. It is that serious, I find it hard to believe Labour would be that naive. Even if Labour reverse their decision, harm has already been done. The question also needs to be asked, why did Winston Peters and NZ First form a coalition with such fools? Was it so personal with National that Peters was prepared to sacrifice the whole economy? It seems so.
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