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Dr Muriel Newman

A snapshot of New Zealand

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In a recent address in Washington honouring our ANZAC relationship, New Zealand’s Ambassador Mike Moore stated: “We are all just a few generations away from a farm and a boat. We are nations of immigrants. We were all boat people at some time or another, and no one came to NZ, Australia or America without a memory. So, we feel a common heritage and trace our history back to the Magna Carta, the Chartists, the Bill of Rights, the British Glorious Revolution, and your own revolution.

“We should occasionally celebrate our success, the great ideas of freedom, representative democracy, freedom of religion, freedom from religion, the rule of law, property rights, the genius of the limited liability company, bankruptcy law, labour rights, women’s rights, the virtues of social mobility…

“We ought not to lose our nerve now when we know that more wealth has been created over the past 60 years than the rest of human history put together. Millions have been lifted out of extreme poverty, and the more open the society the better the outcome. The darkest places on the planet, where people are treated the worst, are the closed economies and societies.

“People, when given the choice, choose freedom in the polling place and the market space. Even after the greatest economic recession since the Great Depression, we are coming back. Those who predicted the end of democratic capitalism and the exhaustion of social democracy will be disappointed. The trading system did hold. Because we learn from history, we adjust.”

The Ambassador ended his speech, Foreign Policy in an Interdependent World: A NZ Perspective, which we are publishing as this week’s NZCPR Guest Commentary, by saying “let’s concentrate on the future, because the past isn’t all it’s cracked up to be.”

Mike Moore’s stirring optimism serves as a reminder of the phenomenal achievements of mankind. In 1820, 85 per cent of the world’s population lived in poverty; today it is less than 20 per cent. Calorie intake in the Third World has risen by 30 percent over the last 50 years. Nine out of ten of the world’s population can now expect to live beyond 60 – more than twice the average of only 100 years ago. And through scientific and industrial development, one hour of work today delivers more than 25 times the value that it did in 1850.

The reality is that the world is a far better place today than it was 50 years ago or even a few years ago – and it will be better still in the years to come. The technological and internet innovations that we are currently experiencing are only the starting point of a revolution that is now underway and is transforming our lives on a daily basis.

In 2010 Statistics NZ published a Time Use survey that showed how an ‘average’ New Zealander aged 12 and older spent an ‘average’ day: they slept 8.5 hours, spent 2.1 hours watching television, 2.7 hours involved in other leisure and sports activities, worked for 2.6 hours, and spent 2 hours doing household activities. The remaining 6.1 hours were spent on a variety of other activities, including eating and drinking, attending school, and shopping!

As well as leading lives of less hardship, New Zealanders in general tend to be reasonably well satisfied. The Ministry of Social Development’s 2010 Social Report indicated that 86 percent of New Zealanders aged 15 and above were satisfied or very satisfied with life overall. Predictably, those who were unemployed, living in rented homes, had no qualifications and lower incomes, had lower levels of overall life satisfaction than those who were employed, owned their own homes, had qualifications and higher incomes. Family also plays a big part in how people feel about life, with people living in one-parent families the least likely to be satisfied with life overall, followed by those not living in a family. The rates for couples, with and without children were the highest.

Life satisfaction is one of 11 indicators used by the Organisation for Economic Co-operation and Development (OECD) to measure country well being. With its objective of promoting policies that will improve the economic and social well-being of people around the world, the OECD has compiled information on the wellbeing of member countries into an interactive website format, which enables countries to compare how they are doing – see here >>>

In terms of the Environment indicator of national wellbeing, when compared with all other OECD countries, New Zealand ranked 2nd out of 34. This is our highest score on wellbeing factors, with only Sweden rating higher.

Home ownership provides families with stability, shelter, and economic security, and is regarded as a significant contributor to well-being.  On the Housing criteria, New Zealand ranked 3rd behind Canada and Australia. We also ranked 3rd on Community, a measure that looks at the strength of our social and community networks.

When it comes to Health, New Zealand ranked 4th in the OECD, with 90 percent of New Zealanders reporting that they were in good health – the highest rate in the OECD and much higher than the average of 69 percent. We also ranked 4th on Governance, indicating that in general the public have a high degree of confidence in New Zealand’s government institutions and public administration.

Having access to work is, of course, an important indicator of wellbeing, and, with an unemployment rate that is far below the OECD average, New Zealand’s ranking on Jobs was 5th.

A country’s crime rate obviously affects wellbeing, and on the Safety indicator, New Zealand ranked 7th in the OECD.

The on-going decline in manual jobs world wide has led to a greater demand for skilled workers, and on the crucial Education indicator, New Zealand ranked 11th.

When it comes to Life satisfaction, we ranked 12th with researchers concluding that New Zealand is one of the happiest countries in the OECD! However, we don’t do so well when it comes to Work-life balance, with a ranking of 24th out of the OECD’s 34 countries.

The final OECD indicator of wellbeing is Income. This is our worst performing measure, with New Zealand ranking in the bottom ten OECD countries at 25th place. The figures are sobering. In New Zealand, the average household net-adjusted disposable income is US$18,996 a year, lower than the OECD average of US$22,284. Our average household wealth is estimated at US$16,131, less than a half of the OECD average of US$36,808.

In considering such a snapshot of how New Zealand compares to other western nations, the stand-out issue is just how financially poor we are. While we can all acknowledge that none of this is simple, our low comparative incomes help to explain why so many of our families and friends are seeking better opportunities abroad.

It also helps us to better appreciate that a key priority of government should be on raising New Zealand incomes. That of course, means improving the country’s productivity. The best way to do that is to remove the barriers to progress – the excessive regulations faced in every walk of life, the needless red tape that all too often chokes the entrepreneurial spirit, and the unnecessary compliance costs that cripple enterprise and destroy wealth creation.

It should be easy for people to harness their talent and innovative skills and start a small business in New Zealand, with the ambition of growing it into a big business and exporting added value products around the world. Government should be playing its part, by doing all that it can to encourage established businesses to expand their markets across the globe. Removing impediments like the Emissions Trading Scheme – that costs so much and destroys international competitiveness for no good reason – is crucial.

While New Zealanders are hard working, it is clear that a major problem we face is that many Kiwi jobs do not pay well. The tourist industry, hospitality, retail, manufacturing, agriculture – in fact most of the areas of high employment that provide a majority of the country’s jobs do so at the lower end of the wage scale, rather than the high end. In fact, those who say our future is in tourism, for example, are really saying that our future is as low income earners. Surely we should aspire to better than that!

So what sort of jobs would provide the higher incomes New Zealand needs? Some that spring to mind are businesses in the IT industry, in the health, and education sectors, in engineering, high value manufacturing, mining, scientific research and development, banking and finance, and the professions. The government is, of course, already involved in some of these areas – up-scaling our broadband network, encouraging an expansion of the mining industry, discussing greater financial deregulation, and proactively pursuing greater trade opportunities through free trade deals and closer economic associations with our trading partners.

While New Zealand clearly has a long way to go to become competitive with other countries on wage rates, there is no doubt that these initiatives are heading in the right direction. The problem is, however, that is not what political opponents are saying.

The reality is that radical groups like socialists and environmentalists make political mileage out of pessimism. They denounce progress and prosperity, claiming that wealth is evil and that development leads to catastrophe. It becomes a real problem when their scaremongering is adopted by Parliamentary parties to influence the wider public, causing fear and uncertainty.

But their game is politics and we must not let detractors take away our optimism and hope for a brighter future for New Zealand. That is not to say that the future is without risk; all progress involves a certain amount of risk that society in general is prepared to take – if the benefits are great enough.

The examples are all around us. We accept the risk of electrocution because the benefits of electricity are so enormous. We accept the risk of radiation because x-rays can be life-saving. We accept the risk of injury because of the massive benefits cars bring to our daily lives. We accept the risk of a plane crash because it is outweighed by the benefits of air travel. We accept the risk of drowning because of the huge benefits water-based activities provide.

And so it should be with public policy – if, as a society, we want the benefits that high living standards would bring to all New Zealanders, then we must be prepared to look beyond the political scaremongering to the benefits that progress will deliver.

I will leave the last word to Mike Moore who, when talking about progress, said how important it is not to lose our momentum or lower our ambitions: “This will require courage, stamina and vision. Boldness is our friend. The future is to be faced, not feared.”