It’s unfortunate that economists have done such a lousy job explaining why economic growth is important. I am often assailed by people who say that “people are more important than growth”, as if growth was somehow not about people.
The reality is that more growth is about more interesting and better paid jobs for New Zealand graduates; it’s about reducing waiting lists in our hospitals; it’s about better salaries for teachers; it’s about better housing, and longer holidays; it’s even about a better natural environment, and being able to pay our top sportspeople enough to have them compete for New Zealand rather for some foreign country.
Over the last 10 years or so, growth in New Zealand has been quite good by the standards of other developed countries – in part because of the benefits of the reforms of the late eighties and early nineties, and in part because of a series of fortuitous circumstances (good growing weather on the farm, very low exchange rate until recently, good export prices, and a strong surge in net immigration, triggered by security concerns abroad).
But every commentator, including the Prime Minister, expects growth to slow down from here, with Treasury’s 10 year projection suggesting that at the end of a decade our growth rate is expected to have declined to little over 2% per annum.
If this is what happens, then the gap in living standards between New Zealand and Australia which has opened up over the last 40 years will continue to widen. And this would destroy New Zealand society as we’ve known it because too many of our brightest and most enterprising people would decide to seek their fortunes abroad.
The present Government used to claim that it intended to get New Zealand’s living standards back into the top half of the OECD within a decade. It has now recognised that that simply will not happen on the basis of present policies, and has abandoned the target. It is now openly focusing on wealth redistribution rather than wealth creation.
This is a huge tragedy for New Zealand.
The National Party knows that reducing the gap between our living standards and those in Australia can’t be done overnight. But we believe that with the right policies it can be done. It is crucially important, especially for those just starting out on their careers, that we waste no time in achieving that objective.
Copyright © 2024 Don Brash.