The Front Page: Why the coming economic storm could keep hitting Labour in the polls

The country might be in a technical recession, but for many Kiwis the worst is yet to come.

The latest report from Westpac shows that many New Zealanders are currently on to higher mortgage rates, leading to enormous pressure on household finances. As time goes by and more fixed mortgage rates expire, this pain will spread across the country.

Add to this the prediction from economists that we could see as many as 150,000 job cuts as the unemployment rate returns to historic averages and you have a dangerous cocktail for an incumbent government.

“The main two things that hurt a Government [in the polls] are rising unemployment and higher mortgage rates because they’re felt by most people,” Newstalk ZB chief political editor Jason Walls tells The Front Page podcast.

“When people start losing their jobs, it starts to become a lot more real.”

Walls says that the personal struggles of Kiwi families and friends will hit a lot harder than any of the abstract economic numbers we’re currently seeing.

“Numbers like the account deficit and the gross debt of the government are very abstract for the vast majority of people – they don’t mean anything at all,” says Walls.

“But when your mate starts losing his job or your mortgage rate stats to go higher, and you’ve got to battle with the costs of groceries and paying a mortgage, and then you have increasing council rates too, you are really going to start getting upset and you’ll be looking for somebody to be upset at.”

This drag on our wallets was exacerbated at the beginning of the month when public transport and fuel subsidies put in place as cost-of-living measures were discontinued.

And even though the Reserve Bank is the main reason behind hiking mortgage rates, Walls says that the Government becomes “an easy scapegoat” when those financial pains really start to hit home.

A poll this week already showed Labour dipping sharply in the polls - and with more economic pain to come for Kiwi families, it could be tough for the party to claw back those losses.

Listen to the full episode of The Front Page to hear Walls elaborate on all these issues and more.

The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5am. It is presented by Damien Venuto, an Auckland-based journalist with a background in business reporting who joined the Herald in 2017.

You can follow the podcast at iHeartRadio, Apple Podcasts, Spotify, or wherever you get your podcasts.