There’s no new Listener column from Brian Easton this week, but he has posted three new speech notes on his website:
- Australia and the Future of New Zealand is very pertinent to some of our recent discussions in the Progressive Path to Prosperity topic – along with some interesting historical anecdotes and an argument against currency union, he offers some explanations for how the income gap with Australia emerged:
The best explanation for the divergence in growth rates, which began in the late 1960s, is that is when the Australian mineral boom began, while New Zealand suffered a palpable shock when the price of its wool, which made up two fifths of export revenue, fell 40 percent . . . The Australian mining boom kick-started their economy, whereas the collapse in price of a major industry was a kick in the guts for New Zealand.
(Easton goes on the explain how the “Rogernomics Recession” was the second crucial setback.)
- Does the Government Know What It’s Doing? is Easton’s assessment of what drives and influences the current National government — but this speech also gets into the GDP-per-capita rivalry with Australia:
Why the focus on GDP per capita? The one group in New Zealand who are closest to direct beneficiaries of material economic growth is the business sector. In the long run the profit rate is roughly equal to the growth of GDP. Profits are the objective of business. By arguing for a higher growth rate, it is arguing for a higher profit rate. They may want to have a high profit rate, but that does not mean it should be the ultimate objective of government. Business is a means to an end, not the end in itself.
- The Changing Balance of World Power is just a fragment for a Chatham house discussion, but it contains some interesting thoughts:
The prospect in the twenty-first century is that tradeable activities will be increasingly where the population is . . . the implications for New Zealand’s economic (and therefore social) development and direction is likely to be enormous, pushing us back to being a food and fibre supplier to the world and challenging the very foundations of the left’s account of New Zealand.
Colin James has his two regular columns:
- A bridge to better policy (Fairfax papers) is an appreciation of Nick Smith on ACC and especially environmental policy;
- Catching Australia’s wages (Otago Daily Times) looks at the state of the National Party as revealed at their conference, with discussion of employment law changes and (again) Australia, including this interesting point (which resonates with Easton’s):
It is that pay differential which lures employees to Australia, not the rate of rise in GDP or the GDP-per-capita difference . . . This is the snag in Key’s push for more dairy farms and tourists. Farmers and hotel owners and managers get better off and the country gets more cashflow. GDP-per-capita goes up. But both pay most employees low wages. That doesn’t fix the wage gap.
Rod Oram’s Star-Times column is entitled Environment policy so bad things can only improve but the criticism is levelled at the status quo that Nick Smith has inherited, rather than his initiatives — Oram has tentative praise for the Environmental Protection Authority idea. He also discusses the latest dairy sector deals on Radio New Zealand’s Nine to Noon.