Latest NZ Institute paper out – “A goal is not a strategy”. NZ’s tiddlywinks approach to economic growth
The NZ Institute’s latest discussion paper – “A goal is not a strategy – focusing efforts to improve NZ’s prosperity” – touches on one of BigCake’s observations about how this country attacks its economic growth issues.
We’re playing “bloody tiddlywinks” while countries, even of a similar size, play big boys’ games.
Tens of millions of dollar there, millions here ain’t going to make much difference.
As the NZ Institute says if a goal is important, then resources should be poured in to match. “Competing small countries are committing hundreds of millions of dollars to efforts they regard as strategically important.”
The Herald’s Brian Fallow has commented on the sizeable discrepancy between what NZ will fork out for its national broadband network (calculated to be $5-8 billion) and Australia’s A$43 billion.
“Canberra’s estimate is the equivalent of $2400 per Australian, eight times the per capita outlay of public money our Government is talking about.”
Fallow was making the point that “this does not, as they used to say, compute.” Someone is going to lose – the taxpayer and/or the consumer.
BigCake’s point is the difference in ambition – geographical and population differences aside.
A couple of years ago I wrote about how the then Labour Government was, under the heading of economic transformation, going to spend $3.6 billion over four years on infrastructure skills and R&D.
At the same time Ireland’s National Development Plan projected expenditure of NZ$105 billion on infrastructure alone over six years.
Whether either happened is not really the point – it’s just the gap in ambition (and the money backing it) that hits you between the eyes.
You see the small thinking in the current Government’s tens of millions approach to agriculture R&D.
As usual the NZ Institute’s work is packed with good grunty stuff on what’s wrong with our economy and what we can do to fix it.
“A goal is not a strategy” is focused on boosting the non-commodity side of the economy – “exports of differentiated goods and services, and helping firms overcome the barriers to internationalisation.
“New Zealand’s exports have grown much more slowly than the OECD average partly because global trade in commodities (where New Zealand exports are concentrated) has grown more slowly than trade in differentiated goods and services.
“New Zealand’s most important sectors for exports are tourism, agriculture, and manufacturing. All three sectors have average or lower than average productivity so simply growing these activities without also substantially lifting productivity would not lift GDP per capita materially.
“Other small countries are becoming prosperous by exporting differentiated goods and services and New Zealand must find a way to join them or find another strategy for success.”
A post on the performance of our ICT sector has been banging around my head for a while. The above looks like good context for a post.