Cost-of-living crisis topples governments in US and New Zealand
Voters in America and New Zealand punished governments for high costs and stagnant wages, reshaping politics.
High costs of living have just reshaped politics in two of Australia's closest trading partners: America and New Zealand. America's midterm elections shocked the Trump administration.
New Zealand's elections removed several top ministers. Wage stagnation and inflation drove both the American and New Zealand upheavals, as voters punished those in power.
This problem goes back decades. Rock-bottom interest rates let governments and households borrow heavily.
When inflation hit, central banks had few good options left. For Australia, both outcomes matter directly.
The US is our defence partner and crucial to our financial stability. New Zealand's economic troubles are already driving migration: about 120,000 Kiwis moved to Australia in the past three years.
This flow has helped Australia's tight labour market, but could pressure jobless numbers if New Zealand's troubles worsen.
- 120,000 in past three years
- Kiwis who migrated to Australia
- $162 trillion USD
- Global government debt
Why it mattersWhen inflation erodes purchasing power, governments lose control of their own fate, voters punish them regardless of who caused the problem.
AustraliaAustralia's two nearest trading partners are in political turmoil over cost of living, and New Zealand's migration to Australia could accelerate, affecting local job competition.
