New Zealand; My Part in its Decline

New Zealand; My Part in its Decline.

40 years ago, I thought that NZ had a great future.

Sure, there were various challenges, local and international-

Like that Maori were still at the bottom end of NZ society by almost every measure- education, income, life expectancy, and as both victims and perpetrators of crime.

Like, that enterprise was stifled by regulation- a legacy of the view that more government was a good thing which emerged from the early successes of state planning and the welfare state.

Like that Britain joined the EC- and European protectionism then annihilated our traditional markets.  Nor, in a closed shop world, were price and quality sufficient by themselves to open new markets for our products.

Like that the world was threatened by communist totalitarianism with the cold war at its height and nuclear holocaust a real possibility.  The Vietnam war was going badly, with other dominos apparently ready to fall.

But we were the first post war generation, beneficiaries of Plunket, free universal education and full employment.   Determined that we would not suffer from the hardships they'd endured, our parents gave us everything.

From the middle 1960's, my baby boomer generation set out to create a new world order.

The goals and means were clear:

Eliminate the institutional racism and sexism that had been holding back a significant proportion of our population.

Create a meritocracy in which competence and hard work were rewarded, privilege and monopoly banished.

Innovate new products and services that even a closed shop world could not fail to welcome

Defeat the dead hand of totalitarian communism by harnessing self interest to the public good.

Unfortunately, things haven't worked out the way I believed they would.

Sexism retreated, but integration and a strong push to eliminate discrimination failed to lift Maori into affluence so they chose instead to seek racial preference as an alternative path- it had worked for pakeha a century earlier after all. 

The command economy, having publicly and spectacularly failed under the popularist Muldoon in the early '80's, freedom bloomed, and the state shrunk with the election of a reformist Lange/Douglas administration in 1984.  Lange and Douglas had spectacularly reversed direction when the direness of our situation became clear immediately after the election.  Reform continued under subsequent administrations until in 2000, we elected Clark/Cullen who set about unwinding the previous decade's reforms.

By not adjusting taxation percentages as average wages increased, Clark and Cullen progressively took more and more of NZers incomes into the state purse.  The government sector now consumes about 41% of total GDP- right up there with Holland and other European countries. 

And it could have worked for us- The high taxes that Northern European countries levy provide their citizens with security, impressive educational systems, excellent health services and world class infrastructure.  

But our taxes have not bought us these things.  Instead, they've been used by Clark and Cullen to buy votes so that they can hold on to power.

Pervasive anti-business, anti-farmer sentiment.  Those with get up and go, have got up and left- more every week.

Energy policies that defy belief- Kyoto, emissions trading, coal to China, opposition to more hydro.

Nimby and the RMA

High exchange rate- housing bubble, current account deficit.

46% growth in state expenditure and 30% increase in state employees during the 1999 to 2008 period- without noticeable improvement in delivery of services- but these people will vote Labour of course.

The tragedy of this period (one of the most sustained periods of growth the world has ever known) for NZers,   is that this prosperity has been squandered and we are now entering a recessionary cycle weakened and without reserves.

Unforgivably, Helen Clark and Michael Cullen's administration have committed the windfall mainly towards buying themselves re-election. Short term pursuit of power to the long term (and not so long term) detriment of the country. 

They used dirty tactics to get elected- Brash's e mails, Goffs use of Brash's private meeting report from the Dept of Foreign Affairs, and etc.

Trying to cast some positive light on NZ's performance, Government and fellow traveler commentators (such as Rod Oram) tout studies that show that compliance costs and the dead weight of govt falls more lightly on NZ businesses than in comparison countries- but the fact remains that NZ is slipping ever further back when ranked against these countries by ability to generate wealth (and therefore choices) for its people. 

Of course there are unique NZ causes for this- too small, too far away, and the drag of our underperforming Maori sector for example, but excuses don't put money in our pockets- just think of the ones that Israel can list and yet economically they have streaked past this lucky country with all it's inherent advantages and head start. 

We can't do much about being too far away except take advantage of the advent of highly fuel-efficient container shipping.  Nor can we do much more than we are doing by way of immigration about our small population size - within the limits set by our ability to increase our infrastructure. 

The dead weight effect of supporting an underperforming Maori percentage is an ever-increasing drag on our economy but is also not easy to fix in the short term short of civil war, and especially while the view persists that more M?ori culture is the solution rather than the problem.

What we could do is make business easier to do here, create a more business friendly environment. 

But we are making it more difficult, not less.

Now rising generations see how difficult business and farming is for their parents and opt for the public service instead- because it gives better returns for less effort- and more leisure.

                                                            Peter Lynn, 2008