NZ Herald business editor at large

Liam Dann: Flying Kiwis a sign of success

Trips to Disneyland were once an impossible dream for Kiwi kids. A lot less so today. Photo / AP
Trips to Disneyland were once an impossible dream for Kiwi kids. A lot less so today. Photo / AP

In the past year a record number of Kiwi kids went on an overseas holiday.

I know, that doesn't really tug on the heartstrings like child poverty or housing issues.

But the fact, buried in the immigration data last week, stands out to me as one of the overlooked reasons for this Government's ongoing popularity as we head into another election year.

Overall, New Zealanders made a record number of overseas departures in the 12 months to the end of January - 2,635,331 short term trips to be exact.

That's a jump of 15 per cent - or an extra 342,000 trips - in just two years.

The numbers include business travel and those who took multiple trips.

But even if you break it down to those who ticked the "holiday" box on their departure card, it still paints a picture of a country where large numbers of people are feeling a lot wealthier than they did a few years ago.

New Zealanders took 1,116,060 international holidays last year - 84,000 more than last year.

The Reserve Bank, Treasury and bank economists all agree New Zealand is in a sweet spot right now. The big economic data is looking better than it has for 20 or 30 years, they say.

But, the critics argue, what do numbers like GDP growth and current account deficit mean for the average New Zealander?

For a large and growing section of the population they mean having enough economic security to take your kids on the trip of a lifetime.

That's a highly meaningful life event - bucket list stuff for many parents.

As a kid I wanted to visit America. But a trip to Disneyland was a long way out of reach for my white middle-class parents in the early 1980s.

Last year, with my family, I made the kind of trip I once dreamed of, contributing five more to the 199,020 Kiwi departures to the US in the year ended January 2017.

In fact, there were 32,560 more New Zealand resident departures to the US in that period compared with two years ago.

If you dig into the Statistics New Zealand website you can even break the departure figures down by age of the traveller to get a snapshot of the wealth effect in this country in my lifetime.

For example, more than five times as many 11-year-olds (my daughter's age) went on an international holiday in 2016 than in 1982, when I was 11.

And more than four times as many 11-year-olds got to the US than did when I was dreaming about it in standard four.

But what's really amazing is the spike in the past two years. The rate of increase has been increasing.

Last week's January departure data showed New Zealanders took an additional 71,000 trips to Australia compared to the January 2015 year, 15,000 more went to the Cook Islands and 12,900 more to Fiji - and so on.

These New Zealanders probably feel pretty good about the country's economic performance.

Now, don't get me wrong, this is still the stuff of privilege.

Those brutal stories about increasing numbers of homeless and kids going hungry are very real.

And despite the Government's mantra that the inequality gap is not widening, there is no disagreement - at least among economists and financial market players I talk to - that since 2008 economic conditions have more acutely favoured those with assets.

The low interest rates and money printing that were used to deal with the Global Financial crisis have caused a huge flow of capital into the property and share markets.

That has meant those who had skin in the game - not just the financial elite but middle-class Kiwis with a house and a KiwiSaver account - have experienced a tremendous wealth effect.

Meanwhile, a slump in oil prices has dropped aviation fuel costs to make for a historically unprecedented era of low airfares.

Can the Government take any credit for this great Kiwi travel boom?

It certainly claims credit for creating a stable, business-friendly environment. And that appears to have put us in the right place to take advantage of those favourable global conditions.

It doesn't necessarily make for an electoral slam dunk on September 23. These are strange times and we've seen big political upsets in the past 12 months. But the odds are clearly on National at this point.

There are serious questions to be asked about the Government's track record on poverty and housing. They should be pushed on it.

There is always a good case to be made that we can't afford not to invest in the welfare of our poorest children.

But even if you don't buy that, the Government accounts are in such good shape right now we really can afford to invest in it.

But those looking to change the Government this year need to take an honest look at the positive data, too. Those statistics capture the voters at margins of the political divide.

Those numbers are the people heading off on holidays in the sun, that their parent's generation could never afford.

- NZ Herald

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NZ Herald business editor at large

Liam Dann is business editor at large at the New Zealand Herald. He has been a journalist for 20 years, covering business for the last 14 of them. He has also worked in the banking sector in London and travelled extensively. His passion is for Markets and Economics, because they are the engine of the New Zealand economy. He hosts The Economy Hub video show every Thursday.

Read more by Liam Dann

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