Reading the news on the current plight of the Irish with a economy in a tailspin and a tottering government. I can but reflect that it was a bloody good thing that the National party wasn’t in power after 1999.
For instance, John Key as recently as 2008 was praising the fragile economic model that Ireland followed. Quite simply acting as a service industry center for Europe is something that can be shut down and moved when the business slows. Anything reliant on that type of business also shuts down. This is why the number of real estate people rises and falls depending on the state of the main economy. It is also why Ireland is in the shite.
Personally I’d prefer NZ to be in businesses that actually make things or have a serious level of intellectual property involved in their businesses. The income doesn’t tend to go up as spectacularly being a real estate agent or other similar service economies. But it also doesn’t get cut back the way that the Irish economy has been when their customers aren’t spending on luxuries.
Unlike Irish government, NZ under Labour kept building the capabilities of our economy to its current state of resilience. Of course NACT are in power now and they prefer the short-term solutions of being real estate agents rather than doing the hard work. I wonder what disaster their tugboat is dragging us to.
Here is Steve Pierson on the John Key and his evident idiocy of the recent past.
From Key’s speech to the NZ Institute of Foreign Affairs on emulating the “Celtic Tiger”:
Thirty years ago, Ireland was a total basket case. Today, it has all of the trappings of a considerable economic success story, including the capacity to attract and retain smart, educated, enterprising people.
three key policy initiatives which were critical to this success:
- They got the tax rates down to really competitive levels.
- They got infrastructure, especially communications infrastructure, up to an impressive standard, and
- They made sure the educational institutions were turning out graduates of the high standard demanded by the sectors that were seen as their areas of competitive advantage.
But the most important point is this: all these initiatives were deliberately targeted at leveraging off their most important strategic asset their location on the edge of the European Union.
Leave aside some of the EU subsidies that someone will mention if I do not the secret to Ireland’s success was location, location, location
And that, surely, must be the key to New Zealand’s economic success in the years ahead.
Ok first, you can’t “leave aside” the fact that Ireland’s had EU injections of several billion euros per annum into its infrastructure for 30 years, they’re worth 5% of Irish GDP each year.
But, more importantly, is Key really saying we should emulate Ireland by being on the edge of the EU? To be fair, he’s what he’s saying isn’t that stupid, its more so:
..If we, sitting on the rim of the fastest growing region on the planet, cannot turn that geographical advantage into a significant economic success story, we have only ourselves to blame.
Ireland made much of its location on the edge of Europe to fuel the economic revolution we have seen there, and I believe New Zealand can do much the same in relation to its proximity to Asia
Key’s a fool if he thinks we are in a position analogous to Ireland. Without its massive advantages in EU subsidies and proximity to markets, adopting Ireland’s high expenditure/low revenue model doesn’t make sense. We should not run our economic policy based on other country’s conditions. What does Key plan to do, move New Zealand closer to China?