For a combined six terms of Government, the two major parties have talked about an economic overhaul for New Zealand.
Under the previous Labour Government of Prime Minister Helen Clark with Dr Michael Cullen as Treasurer, we heard about a “knowledge economy”. In that time – admittedly a stable one with no major natural disasters and only the 11 September terrorist attacks on the world stage, until the Global Financial Crisis – the surplus grew to $10 billion. Two major entities – Kiwi Saver and Kiwi Bank – were implemented by Labour. Despite this though, there were no huge improvements in wage growth or social indicators.
Under National, we have had a vast growth in dairy farming, with Fonterra now contributing about $13 billion to the G.D.P. per annum. There has been a major increase in road infrastructure being built, and trade deals have been negotiated with numerous countries. Despite their promise of “a brighter future” truancy and youth crime are up, suicide and mental health issues are prevalent and 80,000 young people are not in training or education.
Six terms later and not much has changed. And there is much that does need to change. Business as usual is simply not good enough any more.
Since we have seen what the major parties are (not)prepared to do, below I mention what I advocate. But before we look at my suggestions it is important to know about the challenges that the New Zealand economy faces. Major challenges to the economy include:
- A failure to get more young New Zealanders into education or training
- Housing prices that are so high that many New Zealanders are simply priced out of the market; and whose rates are so high that people spend their wages just paying the rent
- A fear of science – fear of research and development and a distrust of the people who carry this out is stopping New Zealand from becoming a technological leader
- The neoliberal attack of the last 30-35 years has undermined New Zealand – market economics have only had modest success at best
But these are the things that need to happen in order to make the New Zealand economy more resilient:
- We limit our exports too severely – New Zealand needs to diversify and more niche export industries need to develop
- We have a dangerous over reliance on dairy farming – we might be a farming nation, but it is an unequal spread with too much emphasis on dairy and not enough on other forms
- The war on science needs to stop and Government investment needs to increase substantially; the process for research grants needs to be simplified
- The emphasis on road transport is outmoded, hugely biased and significant investment in railways and the merchant marine needs to happen
- Restrict property ownership to New Zealand Permanent Residents and Citizens
- Apply a levy – maybe $100 at the border on each tourist, which goes straight into a fund for building appropriate infrastructure in districts too small to be able to afford it themselves (Grey, Buller, Westland, etc)
Contrary to popular belief, there is nothing wrong on the whole with the Resource Management Act. The complaints about it from both the right and the left of the political spectrum suggest that it is working. There are improvements that can be made, but on the whole it works.
We have plentiful untapped energy potential in solar and tidal energy. The price for solar panels has diminished substantially and if the energy companies would permit people to sell back excess power that their panels generate, individual households could create significant savings. This could generate flow on effects into other parts of the economy, such as a greater demand for electricians and other trades people.
So, when New Zealand First leader Winston Peters decides who he is going with, given that many of my suggestions above mirror N.Z.F. policy, I hope to see in the next three years some of these implemented.