web analytics

The Very, Very Lucky Country

Written By: - Date published: 8:18 am, February 17th, 2021 - 5 comments
Categories: australian politics, covid-19, Economy, exports, tourism, treasury - Tags:

While Australia is rightly branded The Lucky Country, it looks like we can reasonably be called the Very, Very Lucky Country.

Because of the way both the government and society have handled Covid-19, New Zealand is now one of the most successful countries on earth.

In the shorter-term performance metrics, the Lowy Institute has said so, following a fairly expansive set of criteria.

Obviously, each state responds to this global crisis with different kinds of instrument and forms of social persuasion, which the OECD has set out.

And for those who want a scan of everyone’s national policy responses, you can find quick summaries about how each country in the world has responded in primarily economic terms in this IMF summary sheet.

Covid-19’s impact is positively transforming the New Zealand economy.

It is currently a lower carbon economy, due to the falloff in international travel.

New Zealand’s coronavirus lockdown triggered a massive 41% drop in Carbon Dioxide levels – a reduction bettered by only one country in the world.

As a short term drop that was great, with a 75% drop in air pollution.

As a longer term drop due to air travel being down for years, that’s very positive for air pollution and the carbon cost of our tourism industry generally.

There was real industry disquiet late in 2020 when the new Minister of Tourism pointedly used the Covid-19 crisis in tourism to start levering out the low end of tourism and levering up our tourism productivity. As the Head of the Youth Hostel association commented about masses of young people flocking here, after Nash’s statement: “This has been a successful strategy of our country and has supported strong industry growth and, with that, economic benefit over the past 20 years.” That end of the tourism market is dead, and it needed to die.

The real economic pain many towns such as Rotorua and Queenstown are feeling is the identical pain that would have occurred through a sudden transition away from fossil fuels – because that’s exactly what it is.

Ours is also already a higher-value economy because tens of thousands of international students have been stopped from attending poor-quality education courses. All tertiary institutions are suffering, but those at the bottom end delivering international literacy courses are faring worst. A little-noted set of Cabinet papers in August last year showed the government explicitly using Covid-19 to transform the $5 billion international student sector. Obviously, they all came here by plane so that’s another massive carbon saving to another major sector of our economy.

The Cabinet paper said the pandemic was expected to cost education providers about $600 million in lost fees just for 2020, but that we stood ready to leverage its handling of the crisis to attract students. “The halt on international travel provides an opportunity to redefine how some of the sector value is generated. For example, the government can encourage the sector to rebuild in a way that is less reliant on student mobility which causes environmental strain, and place more focus on maximising the uptake of online delivery for students offshore.”

It is an economy with much clearer leadership from the state. This is affecting the companies that are already doing well out of 2021.

Construction is also an industry now leading the transformation of New Zealand out of Covid-19’s effects. Integrated construction and infrastructure companies are positioned to gain from government’s $30+billion of funding. You can see most of the big Auckland projects on display here.

With the publication of the infrastructure pipeline, and the Construction Accord, the industry is more cohesive and united – under government leadership – than it has ever been.

Companies that know how to work well with state development agencies, primary among these being Kainga Ora, are also doing well for themselves and the country.

There are whole suburbs of Auckland and Wellington being completely rebuilt by the multiple designers, architects, builders, landscapers, operators, and owners associated with this key agency. Check out Northcote, Mt Roskill, Owairaka, Cannon’s Creek, Hobsonville, Penrose, and more.

In sector after sector of our economy, Covid-19 is transforming us in precisely the same way as a lower-carbon transition has to take us anyway.

Which is quite possibly why there was near-zero disquiet about the 6 weeks of consultation about the Climate Change Commission’s recommendations. Covid-19 is being used as a moment to do the job of carbon transformation already.

This year, there’s going to be a lot more focus on the New Zealand companies that are focusing on very high end, niche high value exports.

And that obviously includes the head-to-head multinational competition of marine componentry in which national pride and multinational capital and the Research & Development resulting from that cooperation of both are fully on the line live before a global audience.

It’s in this moment of sustained global crisis that our state has reasserted itself as the primary agent of national cohesion. It’s the biggest Keynesian moment since the Depression. This is the Treasury summary of those interventions, so far.

With great dollops of subsidy, all exporting sectors of New Zealand’s economy now have transition plans underway.

And we can see people are getting that subsidy direct and indirect, and have the confidence to get out there and spend it, according to Treasury’s latest update.

The very idea of leadership as being of primary importance to our economic wellbeing has just gone up and up in both New Zealand and Australia as both governments were found to be decisive and effective.

And in the broader regional context, our trading neighbourhood in China, Australia, Indonesia, Japan, Vietnam, and Korea are in full fast rebound. They want our stuff and we are selling it to them.

There’s no doubt too that New Zealand’s average poverty has not reduced, and wealth inequality has not decreased. And our homeless rate at around 1% is the highest in the OECD. That’s a focus I will return to once this year’s budget announcements arrive and fresh stats come in with them. But here’s a hint:

In the absence of tax reform, the stealth-reform against our super-rich who have locked up most of our private wealth in trusts is the slow-burn revolution to watch. New Zealand’s wealthiest 1% of adults – around 38,000 people – have $141 billion in trusts. Another 150,000 people, rounding out the rest of the wealthiest 5%, have trusts worth a further $122 billion.

So reform of trusts is underway. Trustees will no longer be able to (a) exercise power for their own profit, (b) not give a damn about conflicts of interest, (c) act for reward (other than legitimate expenses reimbursed). It’s a shudder going down the spine of trust law specialists and their clients – but they’re keeping mighty quiet.

We are, in short, a very, very lucky country.

5 comments on “The Very, Very Lucky Country ”

  1. dv 1

    The 38000 (141 billion ) have abt 3.5 mill each

    and

    The next 150000 have abt 800k each.

    That sort of feels a bit low to me?

    • TMS 1.1

      Good point! Earlier I had been baffled by the Green Party's proposed wealth tax – their figures simply didn't seem to add. More work needed!

  2. RedBaronCV 2

    Well it has certainly whittled out some low value industries – the trick may be in keeping them out.

    Now we need stage two-

    Identifying imports that we can usefully do here – grow table grapes? and also look at kick starting fully automated factories in areas where domestic demand is sufficient or we can add value to export production.

    empowering employees of large or overseas owned companies to negotiate on wages, health and safety and management – to replace the idiot employment laws we currently have.

    charging overseas owned companies for any wider welfare they receive from NZ – repayable on some sort of time frame.

    removing the monopoly and duopoly benefits from basic services such as power and telephone/ internet.

    • RedLogix 2.1

      to replace the idiot employment laws we currently have.

      Yes. Addressing the structural reasons why NZ has so long had such a chronically low Wages Share/GDP ratio would be the very first place I'd start.

      All the points you make are good solid issues an energised and focused left could promote and advocate for. And once upon a time we did – what happened?

      • Cricklewood 2.1.1

        To use rugby parlance the left stopped playing the ball and focused on the man… has the same net result as it does in rugby…

Recent Comments

Recent Posts

  • Protect seamounts and ban bottom trawling right now
    The Green Party is renewing its call for Minister for the Environment, David Parker to immediately ban bottom trawling on seamounts. ...
    10 hours ago
  • Building Auckland’s transport future
    We’re making sure Auckland has the infrastructure it needs for the future, so Aucklanders can get around safely and efficiently as our biggest city grows. The new, linked-up transport system we’re building will include partially tunnelled light rail between the CBD and the airport, as well as another Waitematā Harbour ...
    12 hours ago
  • Build Auckland light rail for benefit of everyone
    The Government’s decision on light rail in Auckland is the first step towards building the climate friendly, accessible city our communities deserve. ...
    12 hours ago
  • Put our most vulnerable first
    Don’t forget whānau and communities most at risk, says the Green Party, as the Government lays out its three-phase plan for Omicron. ...
    2 days ago
  • Boosting our immunity against Omicron
    With Omicron in the community, it’s vital we all do our bit to help to slow the spread, keep each other safe and protect our health system. One of the most important ways we can reduce the risk of Omicron is to get a booster dose as soon as we’re ...
    2 days ago
  • Equitable response to Omicron vital
    The Green Party supports the Government’s decision to move Aotearoa New Zealand to traffic light level Red at 11.59pm tonight, but says its success will depend on the support that is made available to the most vulnerable. ...
    5 days ago
  • How we’re preparing for Omicron
    As countries around the world experience Omicron outbreaks, we’re taking steps now to ensure we’re as prepared as possible and our communities are protected. ...
    1 week ago
  • What’s Labour achieved so far?
    Quite a bit! This Government was elected to take on the toughest issues facing Aotearoa – and that’s what we’re doing. Since the start of the pandemic, protecting lives and livelihoods has been a priority, but we’ve also made progress on long-term challenges, to deliver a future the next generation ...
    2 weeks ago
  • Tackling the big issues in 2022
    This year, keeping Kiwis safe from COVID will remain a key priority of the Government – but we’re also pushing ahead on some of New Zealand’s biggest long-term challenges. In 2022, we’re working to get more Kiwis into homes, reduce emissions, lift children out of poverty, and ensure people get ...
    2 weeks ago

  • Tupu Tai graduation-It’s time to step up
    Greetings: Kia orana, talofa lava, Noa’ia e mauri, malo e lelei, taloha ni, fakaalofa lahi atu, ni sa bula vinaka, talofa, kia ora, tena koutou katoa.  I would love to begin by acknowledging everyone here in attendance, especially the families and friends of the 2021/22 Tupu Tai cohort, and those ...
    BeehiveBy beehive.govt.nz
    9 hours ago
  • Building and shaping a city: Future-proofing Auckland transport infrastructure
    The Government is bringing Auckland’s transport infrastructure into the future by moving forward with an additional Waitematā Harbour crossing, progressing light rail from Auckland’s CBD to the airport, and creating a linked-up rapid transport network as part of a 30-year plan. Key decisions on additional Waitematā Harbour crossing to be ...
    BeehiveBy beehive.govt.nz
    10 hours ago
  • Penguin rehab and native forest restoration get helping hand
    A long-running penguin rehab facility which has been hard hit by the tourism downturn, and work to restore native forest habitats in the Catlins are being supported through Jobs for Nature funding, Conservation Minister Kiri Allan says. Otago’s Penguin Place and The Hokonui Rūnanga Catlins Biodiversity Project will receive combined ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Resilient economy reflected in Crown accounts
    The Government’s financial accounts continue to reflect a resilient economy that has performed better than expected and puts the country in a strong position to respond to Omicron, Grant Robertson said. The Crown Accounts for the five months to the end of November were more favourable than forecast in the ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Government announces three phase public health response to Omicron
    Reducing isolation period for cases and close contacts at Phase Two and Three to 10 and seven days Definition of close contact required to isolate changes to household or household like contacts at Phase Three Increased use of rapid antigen tests with test to return policy put in place for ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • New Ambassador to Thailand announced
    Foreign Affairs Minister Nanaia Mahuta today announced the appointment of Jonathan Kings as New Zealand’s next Ambassador to Thailand. “Aotearoa New Zealand has a long-standing relationship with Thailand, celebrating the 65th anniversary of diplomatic representation between our countries in 2021. We also share much in common at regional and multilateral levels ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Government’s Family Package continues to deliver for New Zealanders
    The Families Package helped around 330,000 families in its first year - more than half of all families with children in NZ These families received an estimated $55 per week more from Families Package payments in 2018/19 than in 2017/18, on average Families Package increases to the maximum possible Accommodation ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • New Zealand retains top spot in global anti-corruption rankings
    Justice Minister Kris Faafoi has welcomed news of New Zealand’s ongoing position as top in the world anti-corruption rankings. The 2021 Corruption Perceptions Index released by global anti-corruption organisation, Transparency International, ranks New Zealand first equal with Denmark and Finland, with a score of 88 out of 100. “This is an ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Testing improvements see New Zealand well prepared for Omicron
    New Zealand’s PCR testing capacity can be increased by nearly 20,000 tests per day to deal with a surge in cases as part of our wider COVID-19 testing strategy, Associate Minister of Health Dr Ayesha Verrall said. “We have continued to adapt our public health response to safeguard the health ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • 5,000 portable air cleaners for schools on their way
    As schools are preparing to return, Education Minister Chris Hipkins has announced 5,000 air cleaners have been ordered for New Zealand schools. “As we know, along with vaccination, testing, good hygiene and physical distancing, good ventilation is important in minimising the risk of airborne transmission of the virus that causes ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • New Zealand to move to Red from 11.59pm today
    All of New Zealand will move to the Red setting of the Covid Protection Framework (CPF) at 11:59pm today as Omicron is potentially now transmitting in the community, Prime Minister Jacinda Ardern says. “Nine COVID-19 cases reported yesterday in the Nelson/Marlborough region are now confirmed as Omicron, and a further ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Mandatory boosters for key workforces progressing well
    More than 5,785 (82%) border workers eligible for a booster vaccination at 6 months have received it so far, COVID-19 Response Minister Chris Hipkins says. “That’s a really strong uptake considering we announced the requirement the week before Christmas, but we need to continue this momentum,” Chris Hipkins said. “We ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • NZ to move to Red
    Nine COVID-19 cases reported yesterday in the Nelson/Marlborough region have now been confirmed as the Omicron variant, and a further case from the same household was confirmed late yesterday. These cases are in a single family that flew to Auckland on 13 January to attend a wedding and other events ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • New Zealand to provide further help for Tonga
    Aotearoa New Zealand is giving an additional $2 million in humanitarian funding for Tonga as the country recovers from a volcanic eruption and tsunami last weekend, Foreign Affairs Minister Nanaia Mahuta and Defence Minister Peeni Henare said today. This brings Aotearoa New Zealand’s contribution to $3 million. “This support will ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Quarterly benefit numbers show highest number of exits into work
    The Government’s strong focus on supporting more people into work is reflected in benefit figures released today which show a year-on-year fall of around 21,300 people receiving a main benefit in the December 2021 quarter, Minister for Social Development and Employment Carmel Sepuloni said. “Our response to COVID has helped ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Northland to move to Orange, NZ prepared for Omicron 
    Northland to move to Orange Rest of New Zealand stays at Orange in preparedness for Omicron All of New Zealand to move into Red in the event of Omicron community outbreak – no use of lockdowns Govt planning well advanced – new case management, close contact definition and testing rules ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • RNZAF C-130 Hercules flight departs for Tonga as Navy vessels draw nearer to Tongatapu
    A Royal New Zealand Air Force C-130 Hercules has departed Base Auckland Whenuapai for Tonga carrying aid supplies, as the New Zealand aid effort ramps up, Foreign Affairs Minister Nanaia Mahuta and Defence Minister Peeni Henare said today. “The aircraft is carrying humanitarian aid and disaster relief supplies, including water ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New Zealand prepared to send support to Tonga
    New Zealand is ready to assist Tonga in its recovery from Saturday night’s undersea eruption and tsunami, Foreign Affairs Minister Nanaia Mahuta and Defence Minister Peeni Henare said today. “Following the successful surveillance and reconnaissance flight of a New Zealand P-3K2 Orion on Monday, imagery and details have been sent ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Aotearoa New Zealand stands ready to assist people of Tonga
    The thoughts of New Zealanders are with the people of Tonga following yesterday’s undersea volcanic eruption and subsequent tsunami waves, Foreign Affairs Minister Nanaia Mahuta says. “Damage assessments are under way and New Zealand has formally offered to provide assistance to Tonga,” said Nanaia Mahuta. New Zealand has made an ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Record high of new homes consented continues
    In the year ended November 2021, 48,522 new homes were consented, up 26 per cent from the November 2020 year. In November 2021, 4,688 new dwellings were consented. Auckland’s new homes consented numbers rose 25 per cent in the last year. Annual figures for the last nine months show more ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Report trumpets scope for ice cream exports
    Latest research into our premium ice cream industry suggests exporters could find new buyers in valuable overseas markets as consumers increasingly look for tip top quality in food. Economic Development Minister Stuart Nash has released a new report for the Food and Beverage Information Project. The project is run by ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Honouring the legacy of legendary kaumātua Muriwai Ihakara
    Associate Minister for Arts, Culture, and Heritage Kiri Allan expressed her great sadness and deepest condolences at the passing of esteemed kaumātua, Muriwai Ihakara. “Muriwai’s passing is not only a loss for the wider creative sector but for all of Aotearoa New Zealand. The country has lost a much beloved ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Have your say on proposed changes to make drinking water safer
    Associate Minister for the Environment Kiri Allan is urging all New Zealanders to give feedback on proposed changes aimed at making drinking water safer. “The current regulations are not fit for purpose and don’t offer enough protection, particularly for those whose water comes from smaller supplies,” Kiri Allan said. “This ...
    BeehiveBy beehive.govt.nz
    3 weeks ago