A perfect storm of events has substantively shaken many of Labour’s ideological goals and intentions. To Labour’s credit, they have attempted to swiftly respond to a few of the growing issues.

However, economically, socially, and politically, Labour is in a precarious position where the key drivers behind their recent policies have eroded, often due to circumstances beyond their control.

Yesterday’s announcements of immediate reductions in Fuel tax and public transport costs for three months was a swift but ineffectual response to much larger problems.

INFLATION

I warned about the impending massive inflationary cycle in November 2020 when the RBNZ was still applying CPI (consumer price index). Ignoring my urgent concerns, many economists and politicians lost sight of the fact that Housing prices act as a strong indicator of rising inflation, and not simply exist as some isolated boom.

Unfortunately, even as late as January, many leaders were still using superficial data to identify inflationary rates, even when faced with overt jumps across indexes and price rises across industries.

Speaking with leaders in many trades offers insight into the current inflation cycle, which is neither transient nor gradual. Builders, plumbers, electricians, auto mechanics and panel beaters, are all among trades that have noted steady increases in prices across products, well before the war in Ukraine.

The inflationary cycle is driven by extremes perpetuated prior to and then exacerbated during the pandemic response.

Today’s tragic events in Europe only exacerbate an already smouldering fire of inflation.

The leadership in New Zealand must address the rising inflationary cycle with a variety of approaches, not simply play whack-a-mole as problems arise.

It is also important to note that any solutions should be tempered to ensure there is not an overreaction, which can cause the pendulum to swing wildly the other direction in a few years. The possibility is that the RBNZ will now over react to inflationary markers they ignored and begin raising rates so quickly the entire economic system starts to destabilise.

Another key to any effectual solution will include financial incentives for businesses as the inflationary momentum will have knock-on impacts across industries.

If these three critical aspects are not applied shortly, Labour’s new environment will be composed of severe economic instability.

STOCKPILES

As trade, supply chains, and essential commodities continue to sustain significant impact, critical resources such as Fuel must begin to be stockpiled, with both government and private sector engagement. Simply reducing the price of fuel does not ensure supply stability.

I wrote an informal letter stating this concern to both the Hon Dr Megan Woods and Simon Bridges MP, as they hold critical influence over Energy and Resources for New Zealand.

Labour leadership’s good intentions to reduce dependence on fossil fuels will need to be tempered with the reality that many critical resources still rely heavily on this today.

For instance, the long term vision to replace Petrol and Diesel vehicles with electric ones is reasonable and beneficial.

However, given today’s reality, refined crude oil still underlies almost all critical needs.

Stockpiles of fuel must be included in any plan Labour has going forward, as this is still an essential requirement for nearly all fire departments, ambulances and police vehicles.

These essential services rely heavily on the premise we can continue to supply fuel, regardless of the global events.

The ideology that supports removing reliance on such fuel needs to be balanced by immediate purchases and stockpiling of critical resources to ensure there is sufficient supply stability.

This is especially important given that there will no longer be any crude oil refinery on New Zealand shores, relying entirely on shipping.

HEALTHCARE

As the COVID pandemic reaches its peak across New Zealand, with the highest death rates and hospitalisations since the very start of New Zealand’s two year prevention policies, there is a rise in other health related deaths.

The intensity of focus on the pandemic has led many in the Labour leadership down the path of myopia, where policies and funding to other critical health have been limited.

Mental health services, cancer care, medicine approvals, and improvements in the funding and support for front line nurses and doctors have all been put on the back burner during the pandemic.

These decisions made to place the COVID response as highest priority to “prevent overload of the health care system” has inadvertently created overload in the health care system.

It is essential that Labour policies now shift to focus on the very people they have touted they have tried to save, the most vulnerable, immediately increasing funding to address the many other growing health need.

By applying a closure process to the COVID response, and using the Health Care momentum to begin funding areas of disrepair and dysfunction, Labour may be able to demonstrate a true devotion to the general health of Kiwis, especially the most vulnerable.

Direct increases in mental health funding, substance abuse programmes, and funding for front line staff numbers will be critical factors.

CONCLUSION

Overall, Labour has a record for improving the economic and social mechanisms that will make New Zealand a successful and stable nation.

However, this can only occur if leadership choose to forgo some of the ideological visions for near term practical solutions.

Ultimately, the coming election results and even the Prime Minister’s own legacy will be determined -- not by the past two years -- but by the result of the next 6 months economically, socially and politically.

A stable economy, with improving health services, underpinned by a more united social environment are only feasible if ideology is supplanted by pragmatic realistic solutions for managing INFLATION, improving STOCKPILES of critical resources, and funding other flailing HEALTH SERVICES.

Mark Rais is the creator of the think tank Trend Analysis Network, writer for the technology and science industry and volunteer senior editor for an on-line magazine. He has published several books and written numerous articles on the topics of macro-economics, technology and society.

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