web analytics

Playing catch up?

Written By: - Date published: 12:39 pm, August 23rd, 2009 - 18 comments
Categories: economy - Tags:

In the 1980s and early 1990s, during the Right’s neoliberal economic revolution, New Zealand’s economic output per person stalled – growing just 0.01% per year between 1984 and 1992 – and fell behind Australia’s economy, which grew 1.84% per person a year over the same period. Between 1999 and 2008, the New Zealand’s GDP per capita actually grew faster than Australia’s (2.00% vs 1.87%) but when we’re so far behind the gap continues getting bigger even if we grow a little faster.

catch up to australia
(source: IMF WEO)

So, what will it take to catch up Australia by 2025 like Key is promising?

Let’s assume Australia keeps growing at 1.74% per person on average like it has the last 30 years. To close the gap, New Zealand would have to grow at 4%.

That’s more than three times the average we’ve managed since 1980. It’s more than twice what Australia managed. Barring total disaster for the Aussies that somehow bypasses us or the discovery of the world’s largest reserves of pixie dust in the Bay of Plenty, it’s not going to happen.

Don Brash and the other right-wing cronies on the 2025 taskforce can do the maths. They and the Government must know their stated goal of catching up to Australia isn’t realistic. In reality, the goal’s just an excuse that can be given for implementing the same old failed rights wing policies, a cover for tax cuts for the rich, cuts to social services, lower wages, and worse working conditions.

The Right’s agenda has never been about growing the economy faster (if it has been, it has been a spectacular failure). It’s about getting a bigger slice of the economy for the wealthy at the expense of everyone else. So are they really trying to play catch up with Australia now, or is there another game afoot?

18 comments on “Playing catch up? ”

  1. bobbity 1

    “The Right’s agenda has never been about growing the economy faster (if it has been, it has been a spectacular failure). It’s about getting a bigger slice of the economy for the wealthy at the expense of everyone else.”

    Do you really believe that ? Or do you think if you repeat another 100 times that somehow it will become reality ?

    • IrishBill 1.1

      Every time the right have been in power over the last thirty years economic growth has shrunk and wealth has been distributed upwards.

      Yet they keep pushing the same policies each time they are in power. They’re either incredibly stupid (and even a leftie like me doesn’t believe they’re that dumb) or they are, as Marty says, more interested in distributing wealth upwards than in growing the economy.

      But I get the feeling you’d rather ignore the evidence and resort to snide remarks based on your prejudices.

  2. Maynard J 2

    Key is being pretty chummy with Rudd.

    If we join the Australian confederation, we will have caught up by default – our average wage will be exactly the same, statistically 😉

  3. tsmithfield 3

    I actually agree that catching Australia is pretty well impossible. Australia is absolutely loaded with commodities that have been in high demand over the last few decades. The Chinese economy is being credited a lot for the growth in the Australian economy as they have been consuming Australia’s resources like nothing else on earth. If the Chinese economy was to crash though…

    I suspect if you did a multiple regression and included the increase in commodity prices in the equation you might find the gap is a bit closer.

    • lprent 3.1

      ts: Your history is crap. The Chinese have only really become a major market much this decade. The Japanese were a rising market for their goods in the 70’s and 80’s. However as was pointed out in the post, the aussies kept rising through the 1990’s unlike us. If you ever care to look at their stats for the period, you’ll find that an increasing proportion of their GNP has come from non-commodity products, same as we have, but they have had a less bumpy ride doing it.

      The main reason appears to be because we keep getting attacked by our internal economic ideologues trying to drive NZ into being a low wage, low employment economy. It is pretty noticeable that the Nats always have increased unemployment and an economy that gets more fragile because they usually try to gut the infrastructure (physical and human) required for long-term growth. Here we have a national party who think like shopkeepers – short-term and seasonal.

      The aussies keep trying for a robust high wage economy, high employment, and being forward looking and it tends to work. Even the right in aussie thinks longer term than the next election there.

  4. RedLogix 4

    absolutely loaded with commodities that have been in high demand over the last few decades.

    Well the last decade in fact, the same period while NZ was managing slightly better growth than Aus. The point is that the gap opened up in the mid 1980’s and 90’s when we notoriously implemented the neo-classic dogma and Aus did not.

    More of the same will not close the gap.

  5. tsmithfield 5

    Redlogix, its not only the commodities.

    Australia also has huge advantages in terms of economies of scale. For instance, Sydney has one port but a population the size of New Zealand. Whereas, New Zealand has multitudes of ports to serve a similar population size. So, in New Zealand, we tend to have a lot more duplication of resources. Also, Australian companies tend to be bigger on average, so they have better buying power etc.

    Just the fact that Australia is a lot bigger than New Zealand, population wise, gives it huge economic advantages in itself.

    Dicking around with our economic policies won’t change any of the fundamental differences between Australia and New Zealand.

    • IrishBill 5.1

      So if they have so much of an advantage how did we start catching up to them a little in the last decade?

      • We didn’t. The “gap” increased a little both in absolute and relative terms. Check the source cited under the graph if you don’t believe me.

        (For the record: I happen not to believe economics-by-league-table is very interesting to start with, but if we’re gonna do it, then we should do it right.)

        EDIT: re-checking the data, I see I was wrong about relative-terms if we cherry-pick the ten-year mark—the Asian Crisis hurt us bad—. My mistake.

  6. infused 6

    I like your posts. I think you guys all post from a template.

    * Some graph.
    * Something that happened in 1990’s
    * What Labour did in 2000-2008
    * Some retarded conclusion with no evidence
    * ????
    * profit

    Playing your game is no different. Great to see Helen take us to the top half of the OCD. Oh no, that’s right, we dropped.

    The only agenda Helen had was getting in to the UN.

    • IrishBill 6.1

      I see you also have to resort to personal abuse. I guess that’s what happens when the evidence goes against you.

      Let me guess, you next argument will be the “National won so they can do whatever they like” one. Desperate. Desperate and dull.

      • lprent 6.1.1

        It is pretty predictable and boring listening to the broken record of the nutters from the right..

        You have to wonder if they’re working their comments off a template. Helen (ignoring the clueless idiot who is the current PM), OECD ratings (ignoring the abrupt drop that National did in the 90’s), retrospective legislation (ignoring that it is common and Nats have done it several times since the election), etc, etc..

        But hey, since they are so stupid about some things they have to be repeated many many times… It is the only apparent way for the message to penetrate. Over the next few years I’m expecting that we will repeat it – pretty much with an increasing “I told you so” as the NACT’s shed ministers, members, parties and what remains of their principles.

  7. You guys are all wide of the mark.

    The NZ economy did well until 1974 when the first petroleum crisis caused all sorts of havoc. Muldoon (Nnational party PM) came to power and wrecked the economy. He bet big on his “Think Big” projects and on the Springbok tour to remain in power. Think Big failed miserably and wrecked the economy and the tour wrecked the community consensus that we had.

    The 4th Labour Government received a hospital pass. Douglas made the wrong decision and tried to privatise everything, Lange should have been stronger but Labour certainly did not fix things although arguably they did not make things worse.

    Richardson and Bolger came to power and caused huge damage to our social infrastructure. Helen and Michael just about repaired the damage caused by Muldoon, Douglas, Richardson and Bolger but got snared up in the battle of advertising bureaus.

    NZ will never catch up to Australia, unless there is huge investment in education and research for the next 15 years.

    Remind me on this current Government’s approach to education and research spending?

  8. Bill 8

    The 3rd world/South/ developing world will never catch up with the so-called developed world for the very same reasons outlined. We know this. And when a 1st world, Western, developed nation wilfully kneecaps itself, it will never catchup.

    The elites will be just dinky though. In fact they will be better off than before national impoverishment and more on a level with elites from other countries.

    Here’s the obvious point. Elites of a poorer nation can only attain a level of wealth comparable to the elites of a wealthy nation if they bleed their own nation. Elites of a wealthy nation might imagine they can get ahead of the game by impoverishing/ bleeding their own nation at a faster rate than elites of other nations.

    Welcome to NZ, a fast track to third worldism for the greater good of the tiny minority. It’s a done deal. The lag is locked in and as always was predicted the third world has moved over borders and landed on your doorstep. The gap and inequity (internally as well as that comparative to other countries who have been slower on the downward spiral) can only grow.

    Welcome.

  9. Greg 9

    I saw some interesting stats out of America concerning the comparison between left wing and right wing presidents and economic growth. (Its in hard copy so I can’t link to it on the web – call it a bluff if you wish) Basically Republican presidents tend to have lower economic growth during the first few years of their reign, but then they leave office with economy growing at a significantly higher rate than the democrats do. Suggesting right wing policies are of benefit in the long term, while left wingers tend to focus on the short.

    I wonder if the same logic can be applied to New Zealand?

  10. Greg 10

    The data I have had a different take on it. Basically it acknowledged that short term economic growth was larger under the democrats, but by the end of their reign it was almost always decreasing. Republican presidents had the reverse effect.

    The data linked to above is only concerning the average for the whole administration. It did not take into account whether it was increasing or decreasing at the end of their reign.

Links to post

Recent Comments

Recent Posts

  • New visitor attraction to boost tourism
    The opening of the first major new tourism attraction since the global outbreak of COVID-19 closed borders to international travellers will provide a welcome boost to visitor numbers in our largest city, says Tourism Minister Stuart Nash. Mr Nash has this afternoon taken part in the official opening ceremony of ...
    BeehiveBy beehive.govt.nz
    9 hours ago
  • Govt moves on drug checking to keep young New Zealanders safer this summer
    The Government will pass time limited legislation to give legal certainty to drug checking services, so they can carry out their work to keep New Zealanders safer this summer at festivals without fear of prosecution, Health Minister Andrew Little says. Next year the Government will develop and consult on regulations ...
    BeehiveBy beehive.govt.nz
    13 hours ago
  • Public Service Commissioner reappointed
    Minister for the Public Service Chris Hipkins announced today that Public Service Commissioner Peter Hughes CNZM has been reappointed for three years. The Public Service Commissioner is appointed by the Governor-General on the recommendation of the Prime Minister. “Mr Hughes’ reappointment reflects the need for strong leadership and continuity to ...
    BeehiveBy beehive.govt.nz
    14 hours ago
  • Pōwhiri marks the start of a critical year for APEC
    New Zealand kicked off its APEC host year today, with a pōwhiri taking place on Wellington’s waterfront with local iwi Te Atiawa, and a number of Government ministers welcoming representatives from the other 20 APEC economies. “APEC is a hugely important international event, and New Zealand is hosting amidst the ...
    BeehiveBy beehive.govt.nz
    14 hours ago
  • Speech at APEC 21 Opening Pōwhiri
    9am, Tuesday 1 DecemberTe Whare Waka o Pōneke, Wellington Central He Mihi Kei aku rangatira no ngātapito e whā o te ao huri noa, tātou e huihui mai nei. Tēnā rā kōutou katoa. He tangiapakura ki ngā tini aituā kei waenganui i a tātou, ka tangi tonu te ngākau ki ...
    BeehiveBy beehive.govt.nz
    14 hours ago
  • Government extends business debt relief to October 2021
    To assist with the ongoing economic recovery from COVID-19, rules allowing affected businesses to put their debt on hold have been extended by 10 months. “New Zealand’s economy is recovering better than we expected, but the impacts of the pandemic are far-reaching and some businesses need continued support to keep ...
    BeehiveBy beehive.govt.nz
    20 hours ago
  • Bill introduced to support workers with 10 days sick leave
    The Government is delivering on a key commitment by introducing a Bill to Parliament to expand sick leave entitlements from five days to ten days a year, Workplace Relations and Safety Minister Michael Wood announced today. “COVID-19 has shown how important it is to stay at home when people are ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Progress on pay equity for DHB staff
    Today’s initial agreement between DHBs and the PSA on pay equity for clerical and administration staff is an important step toward better, fairer pay for this crucial and largely female workforce, Health Minister Andrew Little says. If ratified, the agreement between the Public Service Association and the country’s 20 District ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Iconic Milford Track officially reopens
    One of New Zealand’s premier hikes and a cornerstone of the Te Anau community, the Milford Track has officially reopened, “From today, hikers booked on the popular Great Walk will be able to complete the walk end-to-end for the first time since early February,” Minister of Conservation Kiri Allan says. ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Support for farmers beefed up ahead of La Niña
    Further funding for feed support services and new animal welfare coordinators will help farmers who continue to feel the effects of an extended drought, says Rural Communities Minister Damien O’Connor. “In March this year, I classified the drought in the North Island, parts of the South Island and the Chathams ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Next steps for Christchurch Hospital campus redevelopment
    Canterbury DHB will be better placed to respond to future demand for services and continue to deliver high quality care, with the next stage of the campus redevelopment programme confirmed, Health Minister Andrew Little says. The Government has approved $154 million in funding for the construction of a third tower ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Five Power Defence Arrangements Defence Ministers’ Joint Statement
    The Defence Ministers from Australia, Malaysia, New Zealand, Singapore and United Kingdom reaffirmed their nations’ continued commitment to the Five Power Defence Arrangements (FPDA), and commended the achievements over the past 49 years as the FPDA moves towards its 50th Anniversary in 2021.  The Ministers recognised the FPDA’s significant role ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Jobs for Nature funding protects health of Hawke’s Bay waterways
    A joint Government and Hawke’s Bay Regional Council project will invest $4.2 million to protect local waterways, enhance biodiversity and employ local people, Environment Minister David Parker announced today.   Over two years, the Hāpara Takatū Jobs for Nature project will fence 195km of private land to exclude stock from vulnerable ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • New Year border exception for seasonal workers in the horticulture and wine industries
    2000 additional RSE workers to enter New Zealand early next year employers must pay these workers at least $22.10 an hour employers will cover costs of managed isolation for the RSE workers RSE workers will be paid the equivalent of 30 hours work a week while in isolation From January ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Government increases support for New Zealanders to work in seasonal jobs
    The Government is offering further financial support for unemployed New Zealanders to take on seasonal work. These new incentives include: Up to $200 per week for accommodation costs $1000 incentive payment for workers who complete jobs of six weeks or longer increasing wet weather payments when people can’t work to ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Government receives Royal Commission of Inquiry report into the Terrorist Attack on Christchurch Mos...
    Minister for Internal Affairs Jan Tinetti has today received the Royal Commission of Inquiry report into the Terrorist Attack on Christchurch Mosques, and will table it in Parliament on Tuesday December 8. “I know this will have been a challenging process for whānau, survivors and witnesses of the terrorist attack ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • New Zealand Government to declare a climate emergency
    The Government will declare a climate emergency next week, Climate Change Minister James Shaw said today.                                       “We are in the midst of a climate crisis that will impact on nearly every ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Call for urgent action on Pacific conservation
    A declaration on the urgency of the global biodiversity crisis and the need for immediate, transformative action in the Pacific was agreed at a pan-Pacific conference today. The 10th Pacific Islands Conference on Nature Conservation and Protected Areas is taking place this week across the Pacific.  Minister of Conservation Kiritapu ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Speech from the throne
    E aku hoa i te ara o te whai, Kia kotahi tā tātou takahi i te kō, ko tōku whiwhi kei tō koutou tautoko mai. Ko tāku ki a koutou, hei whakapiki manawa mōku. He horomata rangatira te mahi, e rite ai te whiwhinga a te ringatuku, me te ringakape ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Keynote address to Chartered Accountants Australia and New Zealand conference
    Speech to the CAANZ conference - November 19, 2020 Thank you, Greg, (Greg Haddon, MC) for the welcome. I’d like to acknowledge John Cuthbertson from CAANZ, the Commissioner of Inland Revenue Naomi Ferguson, former fellow MP and former Minister of Revenue, Peter Dunne, other guest speakers and CAANZ members. I ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Expert independent advisory group appointed to strengthen the future of Māori broadcasting
    A panel of seven experts are adding their support to help shape the future of Māori broadcasting, Minister for Māori Development Willie Jackson has announced today. “Today I will meet with some of the most experienced Māori broadcasters, commentators and practitioners in the field. They have practical insights on the ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Government to review housing settings
    New Zealand’s stronger-than-expected economic performance has flowed through to housing demand, so the Government will review housing settings to improve access to the market, the Finance Minister Grant Robertson announced today. “Our focus is on improving access to the housing market for first home buyers and ensuring house price growth ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Crown accounts reflect Govt’s careful economic management
    The better-than-expected Crown accounts released today show the Government’s careful management of the COVID-19 health crisis was the right approach to support the economy. As expected, the Crown accounts for the year to June 2020 show the operating balance before gains and losses, or OBEGAL, was in deficit. However that ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Community launch marks next step in addressing racism in education
    The launch of Te Hurihanganui in Porirua today is another important milestone in the work needed to address racism in the education system and improve outcomes for Māori learners and their whānau, Associate Education Minister Kelvin Davis says. Budget 2019 included $42 million over three years to put Te Hurihanganui ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Government to consider recommendations on DNA use in criminal investigations
    The Minister of Justice has received the Law Commission’s recommending changes to the law governing the way DNA is used in criminal investigations. The report, called The Use of DNA in Criminal Investigations – Te Whahamahi I te Ira Tangata I ngā Mātai Taihara, recommends new legislation to address how ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Speech to Wakatū Nelson regional hui on trade
    First, I want to express my thanks to Te Taumata for this hui and for all the fantastic work you are doing for Māori in the trade space. In the short time that you’ve been operating you’ve already contributed an enormous amount to the conversation, and developed impressive networks.  I ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Speech to Primary Industries Summit
    Thank you for the opportunity to speak to you today about the significant contribution the food and fibres sector makes to New Zealand and how this Government is supporting that effort. I’d like to start by acknowledging our co-Chairs, Terry Copeland and Mavis Mullins, my colleague, Agriculture Minister Damien O’Connor, ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Fast track referrals will speed up recovery and boost jobs and home building
    The Government is taking action to increase jobs, speed up the economic recovery and build houses by putting three more projects through its fast track approval process. “It’s great to see that the fast-track consenting process is working. Today we have referred a mix of potential projects that, if approved, ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Papakāinga provides critically needed homes in Hastings
    A papakāinga opened today by the Minister for Māori Development the Hon Willie Jackson will provide whānau with much needed affordable rental homes in Hastings. The four home papakāinga in Waiōhiki is the first project to be completed under the ‘Hastings Place Based’ initiative. This initiative is a Government, Hastings ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New Zealand ready to host APEC virtually
    Prime Minister Jacinda Ardern took over the leadership of APEC earlier today, when she joined leaders from the 21 APEC economies virtually for the forum’s final 2020 meeting. “We look forward to hosting a fully virtual APEC 2021 next year. While this isn’t an in-person meeting, it will be one ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Revival of Māori Horticulturists
    The rapid revival of Māori horticulture was unmistakeable at this year’s Ahuwhenua Trophy Awards, with 2020 marking the first time this iconic Māori farming event was dedicated to horticulture enterprises. Congratulating finalists at the Awards, Māori Development Minister Willie Jackson said growing large-scale māra kai is part of Māori DNA. ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Emergency benefit to help temporary visa holders
    From 1 December, people on temporary work, student or visitor visas who can’t return home and or support themselves may get an Emergency Benefit from the Ministry of Social Development, Social Development and Employment Minister Carmel Sepuloni announced today. Previously, temporary visa holders in hardship because of COVID-19 have had ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • School sustainability projects to help boost regional economies
    Forty one schools from the Far North to Southland will receive funding for projects that will reduce schools’ emissions and save them money, Education Minister Chris Hipkins announced today. This is the second round of the Sustainability Contestable Fund, and work will begin immediately. The first round announced in April ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Farmer-led projects to improve water health in Canterbury and Otago
    More than $6 million will be spent on helping farmers improve the health of rivers, wetlands, and habitat biodiversity in Canterbury and Otago, as well as improving long-term land management practices, says Agriculture Minister Damien O’Connor. Four farmer-led catchment group Jobs for Nature projects have between allocated between $176,000 and ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Tupu Aotearoa continues expansion to Pacific communities in Nelson, Marlborough, Tasman & Northl...
    Pacific communities in Nelson, Marlborough, Tasman and Northland will benefit from the expansion of the Tupu Aotearoa programme announced today by the Minister for Pacific Peoples, Aupito William Sio. The programme provides sustainable employment and education pathways and will be delivered in partnership with three providers in Northland and two ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New primary school and classrooms for 1,200 students in South Island
    Education Minister Chris Hipkins unveiled major school building projects across the South Island during a visit to Waimea College in Nelson today. It’s part of the Government’s latest investment of $164 million to build new classrooms and upgrade schools around the country. “Investments like this gives the construction industry certainty ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Minister of Māori Development pays tribute to Rudy Taylor
      Today the Minister of Māori Development, alongside other Government Ministers and MP’s said their final farewells to Nga Puhi Leader Rudy Taylor.  “Rudy dedicated his life to the betterment of Māori, and his strong approach was always from the ground up, grassroots, sincere and unfaltering”  “Over the past few ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Prime Minister to attend APEC Leaders’ Summit
    Prime Minister Jacinda Ardern will attend the annual APEC Economic Leaders’ Meeting and associated events virtually today and tomorrow. “In a world where we cannot travel due to COVID-19, continuing close collaboration with our regional partners is key to accelerating New Zealand’s economic recovery,” Jacinda Ardern said. “There is wide ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Speech to Infrastructure NZ Symposium
    Tena Koutou, Tena Koutou and thank you for inviting me to speak to you today. This is a critical time for New Zealand as we respond to the damage wreaked by the global COVID-19 pandemic. It is vital that investment in our economic recovery is well thought through, and makes ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Pike River 10 Year Anniversary Commemorative Service
    Tēnei te mihi ki a tātau katoa e huihui nei i tēnei rā Ki a koutou ngā whānau o te hunga kua riro i kōnei – he mihi aroha ki a koutou Ki te hapori whānui – tēnā koutou Ki ngā tāngata whenua – tēnā koutou Ki ngā mate, e ...
    BeehiveBy beehive.govt.nz
    2 weeks ago