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

  • EV road user charges bill passes
    Transport Minister Simeon Brown has welcomed the passing of legislation to move light electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) into the road user charges system from 1 April.  “It was always intended that EVs and PHEVs would be exempt from road user charges until they reached two ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Bill targets illegal, unregulated fishing in international waters
    New Zealand is strengthening its ability to combat illegal fishing outside its domestic waters and beef up regulation for its own commercial fishers in international waters through a Bill which had its first reading in Parliament today. The Fisheries (International Fishing and Other Matters) Amendment Bill 2023 sets out stronger ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Reserve Bank appointments
    Economists Carl Hansen and Professor Prasanna Gai have been appointed to the Reserve Bank Monetary Policy Committee, Finance Minister Nicola Willis announced today. The Monetary Policy Committee (MPC) is the independent decision-making body that sets the Official Cash Rate which determines interest rates.  Carl Hansen, the executive director of Capital ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Stronger protections for apartment owners
    Apartment owners and buyers will soon have greater protections as further changes to the law on unit titles come into effect, Housing Minister Chris Bishop says. “The Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Act had already introduced some changes in December 2022 and May 2023, and ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Travel focused on traditional partners and Middle East
    Foreign Minister Winston Peters will travel to Egypt and Europe from this weekend.    “This travel will focus on a range of New Zealand’s traditional diplomatic and security partnerships while enabling broad engagement on the urgent situation in Gaza,” Mr Peters says.   Mr Peters will attend the NATO Foreign ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Keep safe on our roads this Easter
    Transport Minister Simeon Brown is encouraging all road users to stay safe, plan their journeys ahead of time, and be patient with other drivers while travelling around this Easter long weekend. “Road safety is a responsibility we all share, and with increased traffic on our roads expected this Easter we ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Cost of living support for over 1.4 million Kiwis
    About 1.4 million New Zealanders will receive cost of living relief through increased government assistance from April 1 909,000 pensioners get a boost to Superannuation, including 5000 veterans 371,000 working-age beneficiaries will get higher payments 45,000 students will see an increase in their allowance Over a quarter of New Zealanders ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Tenancy reviews for social housing restart
    Ensuring social housing is being provided to those with the greatest needs is front of mind as the Government restarts social housing tenancy reviews, Associate Housing Minister Tama Potaka says. “Our relentless focus on building a strong economy is to ensure we can deliver better public services such as social ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Kermadec Ocean Sanctuary plan halted
    The Kermadec Ocean Sanctuary will not go ahead, with Cabinet deciding to stop work on the proposed reserve and remove the Bill that would have established it from Parliament’s order paper. “The Kermadec Ocean Sanctuary Bill would have created a 620,000 sq km economic no-go zone,” Oceans and Fisheries Minister ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Cutting all that dam red tape
    Dam safety regulations are being amended so that smaller dams won’t be subject to excessive compliance costs, Minister for Building and Construction Chris Penk says. “The coalition Government is focused on reducing costs and removing unnecessary red tape so we can get the economy back on track.  “Dam safety regulations ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Drought support extended to parts of North Island
    The coalition Government is expanding the medium-scale adverse event classification to parts of the North Island as dry weather conditions persist, Agriculture Minister Todd McClay announced today. “I have made the decision to expand the medium-scale adverse event classification already in place for parts of the South Island to also cover the ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Passage of major tax bill welcomed
    The passing of legislation giving effect to coalition Government tax commitments has been welcomed by Finance Minister Nicola Willis.  “The Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Bill will help place New Zealand on a more secure economic footing, improve outcomes for New Zealanders, and make our tax system ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Lifting economy through science, tertiary sectors
    Science, Innovation and Technology Minister Judith Collins and Tertiary Education and Skills Minister Penny Simmonds today announced plans to transform our science and university sectors to boost the economy. Two advisory groups, chaired by Professor Sir Peter Gluckman, will advise the Government on how these sectors can play a greater ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Government announces Budget priorities
    The Budget will deliver urgently-needed tax relief to hard-working New Zealanders while putting the government’s finances back on a sustainable track, Finance Minister Nicola Willis says.  The Finance Minister made the comments at the release of the Budget Policy Statement setting out the Government’s Budget objectives. “The coalition Government intends ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Government to consider accommodation solution
    The coalition Government will look at options to address a zoning issue that limits how much financial support Queenstown residents can get for accommodation. Cabinet has agreed on a response to the Petitions Committee, which had recommended the geographic information MSD uses to determine how much accommodation supplement can be ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Government approves extension to Royal Commission of Inquiry into Abuse in Care
    Cabinet has agreed to a short extension to the final reporting timeframe for the Royal Commission into Abuse in Care from 28 March 2024 to 26 June 2024, Internal Affairs Minister Brooke van Velden says.                                         “The Royal Commission wrote to me on 16 February 2024, requesting that I consider an ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • $18m boost for Kiwis travelling to health treatment
    The coalition Government is delivering an $18 million boost to New Zealanders needing to travel for specialist health treatment, Health Minister Dr Shane Reti says.   “These changes are long overdue – the National Travel Assistance (NTA) scheme saw its last increase to mileage and accommodation rates way back in 2009.  ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • PM’s Prizes for Space to showcase sector’s talent
    The Government is recognising the innovative and rising talent in New Zealand’s growing space sector, with the Prime Minister and Space Minister Judith Collins announcing the new Prime Minister’s Prizes for Space today. “New Zealand has a growing reputation as a high-value partner for space missions and research. I am ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Concerns conveyed to China over cyber activity
    Foreign Minister Winston Peters has confirmed New Zealand’s concerns about cyber activity have been conveyed directly to the Chinese Government.     “The Prime Minister and Minister Collins have expressed concerns today about malicious cyber activity, attributed to groups sponsored by the Chinese Government, targeting democratic institutions in both New ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Independent Reviewers appointed for School Property Inquiry
    Independent Reviewers appointed for School Property Inquiry Education Minister Erica Stanford today announced the appointment of three independent reviewers to lead the Ministerial Inquiry into the Ministry of Education’s School Property Function.  The Inquiry will be led by former Minister of Foreign Affairs Murray McCully. “There is a clear need ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Brynderwyns open for Easter
    State Highway 1 across the Brynderwyns will be open for Easter weekend, with work currently underway to ensure the resilience of this critical route being paused for Easter Weekend to allow holiday makers to travel north, Transport Minister Simeon Brown says. “Today I visited the Brynderwyn Hills construction site, where ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Speech to the Infrastructure Funding & Financing Conference
    Introduction Good morning to you all, and thanks for having me bright and early today. I am absolutely delighted to be the Minister for Infrastructure alongside the Minister of Housing and Resource Management Reform. I know the Prime Minister sees the three roles as closely connected and he wants me ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Parliamentary network breached by the PRC
    New Zealand stands with the United Kingdom in its condemnation of People’s Republic of China (PRC) state-backed malicious cyber activity impacting its Electoral Commission and targeting Members of the UK Parliament. “The use of cyber-enabled espionage operations to interfere with democratic institutions and processes anywhere is unacceptable,” Minister Responsible for ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • NZ to provide support for Solomon Islands election
    Foreign Minister Winston Peters and Defence Minister Judith Collins today announced New Zealand will provide logistics support for the upcoming Solomon Islands election. “We’re sending a team of New Zealand Defence Force personnel and two NH90 helicopters to provide logistics support for the election on 17 April, at the request ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • NZ-EU FTA gains Royal Assent for 1 May entry to force
    The European Union Free Trade Agreement Legislation Amendment Bill received Royal Assent today, completing the process for New Zealand’s ratification of its free trade agreement with the European Union.    “I am pleased to announce that today, in a small ceremony at the Beehive, New Zealand notified the European Union ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • COVID-19 inquiry attracts 11,000 submissions
    Public consultation on the terms of reference for the Royal Commission into COVID-19 Lessons has concluded, Internal Affairs Minister Hon Brooke van Velden says.  “I have been advised that there were over 11,000 submissions made through the Royal Commission’s online consultation portal.” Expanding the scope of the Royal Commission of ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Families to receive up to $75 a week help with ECE fees
    Hardworking families are set to benefit from a new credit to help them meet their early childcare education (ECE) costs, Finance Minister Nicola Willis says. From 1 July, parents and caregivers of young children will be supported to manage the rising cost of living with a partial reimbursement of their ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Unlocking a sustainable, low-emissions future
    A specialised Independent Technical Advisory Group (ITAG) tasked with preparing and publishing independent non-binding advice on the design of a "green" (sustainable finance) taxonomy rulebook is being established, Climate Change Minister Simon Watts says.  “Comprising experts and market participants, the ITAG's primary goal is to deliver comprehensive recommendations to the ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Chief of Army thanked for his service
    Defence Minister Judith Collins has thanked the Chief of Army, Major General John Boswell, DSD, for his service as he leaves the Army after 40 years. “I would like to thank Major General Boswell for his contribution to the Army and the wider New Zealand Defence Force, undertaking many different ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Minister to meet Australian counterparts and Manufacturing Industry Leaders
    25 March 2024 Minister to meet Australian counterparts and Manufacturing Industry Leaders Small Business, Manufacturing, Commerce and Consumer Affairs Minister Andrew Bayly will travel to Australia for a series of bi-lateral meetings and manufacturing visits. During the visit, Minister Bayly will meet with his Australian counterparts, Senator Tim Ayres, Ed ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Government commits nearly $3 million for period products in schools
    Government commits almost $3 million for period products in schools The Coalition Government has committed $2.9 million to ensure intermediate and secondary schools continue providing period products to those who need them, Minister of Education Erica Stanford announced today. “This is an issue of dignity and ensuring young women don’t ...
    BeehiveBy beehive.govt.nz
    6 days ago
  • Speech – Making it easier to build.
    Good morning, it’s great to be here.   First, I would like to acknowledge the New Zealand Institute of Building Surveyors and thank you for the opportunity to be here this morning.  I would like to use this opportunity to outline the Government’s ambitious plan and what we hope to ...
    BeehiveBy beehive.govt.nz
    7 days ago
  • Pacific youth to shine from boost to Polyfest
    Minister for Pacific Peoples Dr Shane Reti has announced the Government’s commitment to the Auckland Secondary Schools Māori and Pacific Islands Cultural Festival, more commonly known as Polyfest. “The Ministry for Pacific Peoples is a longtime supporter of Polyfest and, as it celebrates 49 years in 2024, I’m proud to ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • 2024 Ngarimu VC and 28th (Māori) Battalion Memorial Scholarships announced
    ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Speech to Breast Cancer Foundation – Insights Conference
    Before moving onto the substance of today’s address, I want to recognise the very significant and ongoing contribution the Breast Cancer Foundation makes to support the lives of New Zealand women and their families living with breast cancer. I very much enjoy working with you. I also want to recognise ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Kiwi research soars to International Space Station
    New Zealand has notched up a first with the launch of University of Canterbury research to the International Space Station, Science, Innovation and Technology and Space Minister Judith Collins says. The hardware, developed by Dr Sarah Kessans, is designed to operate autonomously in orbit, allowing scientists on Earth to study ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Speech to the New Zealand Planning Institute
    Introduction Thank you for inviting me to speak with you today and I’m sorry I can’t be there in person. Yesterday I started in Wellington for Breakfast TV, spoke to a property conference in Auckland, and finished the day speaking to local government in Christchurch, so it would have been ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Support for Northland emergency response centre
    The Coalition Government is contributing more than $1 million to support the establishment of an emergency multi-agency coordination centre in Northland. Emergency Management and Recovery Minister Mark Mitchell announced the contribution today during a visit of the Whangārei site where the facility will be constructed.  “Northland has faced a number ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Celebrating 20 years of Whakaata Māori
    New Zealanders have enjoyed a broader range of voices telling the story of Aotearoa thanks to the creation of Whakaata Māori 20 years ago, says Māori Development Minister Tama Potaka. The minister spoke at a celebration marking the national indigenous media organisation’s 20th anniversary at their studio in Auckland on ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Some commercial fishery catch limits increased
    Commercial catch limits for some fisheries have been increased following a review showing stocks are healthy and abundant, Ocean and Fisheries Minister Shane Jones says. The changes, along with some other catch limit changes and management settings, begin coming into effect from 1 April 2024. "Regular biannual reviews of fish ...
    BeehiveBy beehive.govt.nz
    1 week ago

Page generated in The Standard by Wordpress at 2024-03-29T15:52:05+00:00