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Paul Newfield

New Zealand: It’s time to be measured

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This is traditionally a time of year when we commit to new personal goals. The energy and sense of perspective we bring back from summer holidays, combined with the ticking over of the calendar, put us in the right frame of mind for resolutions. This year I believe we New Zealanders should also make a broader, collective commitment. We should commit to a measurable goal for our nation.

From our personal and professional experiences we all know how powerful it can be to have an ambitious and objectively-measurable goal. For example, it’s so much easier to focus on fitness training when you’ve made a public commitment to run a half marathon. Similarly, when an organization wants to target its efforts in a particular area it defines objectives and KPIs. What gets measured gets done.

In the absence of a measurable goal there’s always the tendency to drift. We get distracted, our progress slows and our ambitions are subdued.

Sadly, this is what’s happened to our nation. In 1900, New Zealand had the highest GDP per capita in the world. In 1950, we were sixth. By 1980 we had dropped to twenty-seventh in the world. Since then our real GDP per capita has grown at only 1.4% per annum – a rate that has seen us overtaken by five more countries. So now we’re thirty-second in the world and, based on IMF growth forecasts, we could fall to forty-seventh by 2025. That will put us well behind Kazakhstan and Botswana! But because this has been a gradual process, it’s been all-too-easy for us to let things slide without facing up to the problem.

If we are to arrest New Zealand’s relative decline, setting a simple, measurable goal for the country is a crucial first step. We need a long term target that will inspire action and focus our minds. And we need a highly visible yardstick against which we can regularly measure progress.

Prior to the election, Lloyd Morrison and I started to promote the concept of a measurable goal for New Zealand. The goal we suggested was returning New Zealand to the global GDP per capita top 10 by 2025. We were pleasantly surprised by the initial response to this concept. Thousands of people visited www.blog.nzx.com to download our paper, the idea received significant press coverage and we received a large number of supportive messages (along with some valuable constructive feedback on how we should formulate and promote a measurable goal).

Since then, National and Act have made a measurable goal the foundation of their confidence and supply agreement. The target they have chosen is for New Zealand to catch up with Australia’s GDP per capita by 2025.

When National and Act announced this commitment, some people suggested that the objectives of our campaign had been achieved. However, we see this as nothing more than a promising start. The Government’s announcement of a measurable goal is definitely a step in the right direction, but it has been done before. Helen Clark promised to bring New Zealand into the top half of the OECD, a promise that was conveniently forgotten when the going got tough. We need to make sure that our political leaders are talking about their contribution to New Zealand’s long-term goal at the end of their term, not just at the beginning of it.

The only way this will be achieved is through New Zealanders having a personal ambition to contribute towards a collective goal and an ongoing commitment to hold ourselves and our governments accountable for progress towards that goal. We need the ‘person on the street’ to become as passionate about our country’s economic performance as he or she is about our sporting results – after all, we don’t even tolerate an All Black loss in a Rugby World Cup quarter final (and nor should we). So why do we tolerate being thirty-second in the world when it comes to per capita incomes?

The key to building the necessary level of public engagement will be focusing on our economic ranking and what it means to everyday New Zealanders. People can’t get passionate about a number like 26,000 (our current GDP per capita in US dollars) – and frankly many New Zealanders may neither know nor care what GDP is. But people can understand the fact that we’ve slipped to number thirty-two in the world, and are forecast to fall behind Kazakhstan and Botswana. We must make sure they also understand what this will mean in terms of health care, education and job opportunities.

While the “catch up to Australia” target is laudable and will have some resonance with the New Zealand public, I believe our national goal should be defined in more ambitious and global terms. On current forecasts, Australia will be ranked around twentieth in the world by GDP per capita in 2025. That’s a big improvement on the forty-seventh position we’re currently heading for, but in a world in which talented people and smart money will be increasingly mobile, merely catching up with Australia won’t keep our children and grandchildren in New Zealand.

Catching up with Australia by 2025 would require us to achieve around 4% pa real growth in GDP per capita. That in itself will be a tough task (remember, since 1980 we’ve only achieved 1.4% pa). But if we could manage an extra half a percentage point per annum, lifting growth to 4.5% pa, we would leapfrog Australia and get into the global Top Ten rather than stopping at twentieth. This rate of growth, while highly challenging, would not be unprecedented. Over the last twenty years Korea, Ireland, Taiwan and Singapore have enjoyed average real GDP per capita growth rates ranging from 4.5% to 5.2% pa.

Calling for such a dramatic increase in New Zealand’s productivity should not be confused with advocating untrammeled growth or disregarding social and environmental issues. On the contrary, the Measurable Goal should encourage us to take a long-term perspective on building New Zealand’s prosperity. To achieve high rates of economic growth consistently through to 2025, we will need to ensure we are reinvesting in our society and taking care of our environment. Policies and strategies that disregard the future quality of our communities and environment to deliver short-term economic growth are simply borrowing from tomorrow for today.

Most New Zealanders are committed to values that cannot be fully measured by as blunt a tool as GDP per capita – we don’t just want a country with high incomes, we want a safe, harmonious community and a healthy environment. But at the end of the day, a poor New Zealand cannot continue living in the manner to which it is accustomed. Our commitments to the environment, education, social welfare and healthcare are contingent upon having the wealth to continue to give them the attention that they need. While I’m suggesting we define our measurable goal in terms of economic performance, our collective social and environmental conscience must ensure that this growth is achieved in a sustainable manner.

At Morrison Co, our interest in this issue is first an

d foremost as New Zealanders. New Zealand needs an ambitious, measurable goal to raise our position on the international league tables – not as an end in itself but as a means to make this country a place where our children and grandchildren want to live and work. I would imagine all Kiwi parents hope for a future New Zealand where our children will want to stay, bring up their own children and not have to jet off to the comparatively prosperous Kazakhstan for opportunities they can’t get here! We can’t recapture the past, but let’s aim to reclaim New Zealand’s status as God’s Own – a place which talented, ambitious people see as a land of opportunity – not just a point of exodus.

We plan to continue to promote the concept of a Measurable Goal for New Zealand and encourage New Zealanders to hold ourselves and our governments accountable for progress towards this goal. If you would like to register your support for the initiative and be kept up-to-date with progress, please email measurablegoal@hrlmorrison.com. Readers with Facebook accounts can also join the “Measurable Goal for New Zealand” Facebook group to share your views on the topic.