Reforming the New Zealand economy: Part I

There is a saying about not having too many eggs in one basket incase the basket breaks. As I look at the state of the New Zealand economy, I cannot help but notice how much truth there is in that in a purely New Zealand context. The substantial emphasis on dairying that has had such a big share of the N.Z. job market, of the New Zealand G.D.P. and of our exports overseas has been great but it has come at substantial environmental cost and a critical lack of effort to diversify other parts of the economy. The price of this amongst other factors is soon going to become critical.

So, what are those other factors and what can we do about them? The key ones are:

  1. Our economy is largely built on the following: timber/forestry products; dairy; tourism and horti/viticulture – what happens if a bio-threat or other threat cripples one or more?
  2. We are vulnerable to climate change in whatever form it comes – there may be benefits as well as threats, but how well positioned are we to adapt?
  3. We have a potential gold mine of research and development potential that we could be tapping into for energy sources, biochemistry, telecommunications amongst others – so, why are we not?
  4. The tax system, like that of so many others as well as the justice system are in need of reform, but is any party in Parliament brave enough to take up the challenge?
  5. The countries overseas that are doing well, such as Germany are export driven – and so can we
  6. Research and Development is something that broadly benefits all of the sectors mentioned above including the ones whose potential we have not realised
  7. Reducing our ecological footprint is not appreciated as an idea by many, but there are substantial socio-economic  benefits

If we assume the status quo should continue, the likely outcome is that the middle class which politicians talk so much about supporting, will largely disappear or become the new lower class in that they will be able to barely afford living expenses. The existing lower class will devolve into slum or ghetto like living, prone to high levels of crime and violence, whilst the existing slum or ghetto dwellers will become destitute. The wealthy will not likely notice except when occasional court decisions do not go their way.

So, what can be done to improve the situation? Find out in Part II.

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