Andrew von Dadelszen Former Regional Councillor

The year has started with substantive volatility in global share markets and New Zealand has not been immune. However, NZ investors should not be spooked, but should remain cautious. The NZ economy is seen internationally to be resilient, and this is reflected in the market sell off since the New Year.

The NZ economy continues to grow, including wages, and inflation remains stubbornly low. With the price of oil at below $30 per barrel don't expect inflation to pick up any time soon.

The biggest global concern is China's continued high growth. China is chewing through its Government reserves as they defend their currency against global Hedge Funds, which are betting against them. NZ experienced the same thing in 1984, when Muldoon tried unsuccessfully to defend the NZ dollar. Like then, it is the Hedge Funds that probably know best – and not the Chinese Government. Since 2010, an estimated 80 per cent of global growth has come from emerging markets, and 80 per cent of that has been from China. Currently, Russia is struggling and Brazil's economy has shrunk 10 per cent in the last year. Iran's oil is yet to come on line, and they have a very low cost of production. While this picture does shed some global concerns, New Zealand remains pretty well positioned. While our household debt remains high, it is still not as high as in Australia; and core crown debt to GDP remains under 25 per cent.

Water is a key issue for New Zealand, as we only use two per cent of our annual rainfall. We have the potential to irrigate 420,000 hectares by 2025, and this gives us the ability to double our agricultural export receipts by 2025. Water is the 21^st Century gold, and New Zealanders are rightly concerned that we all own this right, and that we don't allow central government to capitulate to iwi by allowing weak regional council's to manage this precious resource. The management of our fresh water resources could well define how this current government is perceived in 2016.

If you have any views on these or other issues please feel free to contact me on andrew@vond.co.nz or visit my website www.vond.co.nz