I belatedly watched the last episode of TVNZ’s Q&A. Interesting, not for enlightenment, but for the astonishing amount of waffle, cliches and platitudes crammed into one half hour programme.
And the total rubbish being talked.
Mike Williams, despite being a dyed in the wool lefty, spoke more sense than all the rest of them put together, although his fulsome praise of slippery slope Phil Goff put a dent in his verisimilitude. Watch the program yourself, then visit the websites of the Treasury, the OECD, the CIA’s World Factbook; review the facts and figures and make up your own mind whether these “experts” have got it together or not.
The panel comprised Dr Claire Robinson, very highly qualified and experienced in communications; Katherine Rich, front-runner for the National Party leadership not long ago; and Mike Williams, ex-Labour Party president. The views they expressed made me wonder whether we’re all in the same universe, never mind on the same planet.
Just to set the mood we had a clip of Dr Doom aka Allan Bollard saying:
I don’t think we can catch up with Australia. Australia’s a most unusual country. Australia has been blessed by God sprinkling minerals across the top of the surface in very easily accessible areas in places where it doesn’t annoy people to mine them.
Look a little deeper for excuses Dr Bollard. Although it’s 35% of Australia’s exports, mining contributes less than 6% to Australia’s GDP (depends whom you ask, say between 5 and 7%). Take away that 6% and they’d still leave us in the dust. On the subject of most unusual countries blessed by the gods have you looked around your own backyard lately?
We were wealthier than Australia for most of last century, mineral wealth notwithstanding. Singapore is doing significantly better than Australia, as are Austria and The Netherlands. Even Ireland before they got carried away with the same frantic borrow and spend that we’re indulging in. They didn’t need mineral wealth.
I digress—back down the wormhole to Q&A’s alternate universe :
Claire Robinson says that the wage gap is a very narrow means of looking at Australia and that we’re doing much better than Australia in many other areas. She nominates:
- the country brand
- and United Nations human development.
In all these vital areas the benighted nations of the world are lagging behind us.
Hello? Is that all of them, or just the 48 countries who’ve overtaken us in wealth over the last 60 years?
Later she says that, partly because of this year’s national disasters, people are looking around and thinking the world is a bigger place and things are not too bad.
Katherine Rich obviously agrees with Dr Bollard. Her major contribution, apart from joining in the platitude fest, was that catching up with Australia is just not going to happen.
I think I’ll just go and shoot myself.
Don’t believe me?
2025 Task force; Focusing on Growth: Closing the income gap with Australia by 2025: Second Report had this to say:
In 2009 the direct effect of activity in the minerals sector accounted for 6.8 percent of Australia’s GDP, about the same as the share of agricultural production in New Zealand’s GDP. This is large enough to have some impact on growth in the whole Australian economy. It is, however, easy to overstate the importance of the minerals boom in Australia. Australia’s mineral and related exports were growing very rapidly (as a share of total exports and of GDP) from the 1960s, at least 20 years before Australia reversed its own fall in OECD rankings of income per capita. Minerals were already around 35 percent of total Australian exports by the mid 1970s (equal in nominal terms to around 5 percent of Australia’s GDP in 1970).
In contrast to many popular views about Australia’s advantages, New Zealand is relatively well endowed with natural resources, and on a per capita basis perhaps better endowed than Australia. We have a climate almost ideally suited to grassland farming and, for example, productivity growth in the dairy sector has been faster than in most other sectors of the economy over the last 20 years. There is probably more scope for innovation, new technologies, and smart products in these commodity-based industries than there is in most of Australia’s commodity industries. New Zealand also has a huge exclusive economic zone that is rich in fish (a well-managed sustainable resource). Even on or under the land, indications are that New Zealand’s mineral and hydrocarbon resources could be, for the physical size of the country, at least as large as Australia’s – rich in iron sands, lignite and other minerals, in geothermal energy potential and potentially in oil and gas. New Zealand may well have made it more difficult to explore and develop its resources than Australia has done, but if so those are regulatory and political issues, not issues of underlying economic potential.
Finally we note that many high-income countries have much smaller mineral resources than New Zealand: these include Singapore, Taiwan, Japan, Denmark, Ireland, and Austria. In many countries abundant mineral or hydrocarbon natural resources have come to be seen as something of a “curse”, undermining good policies and institutions, driving up the exchange rate and deferring necessary structural adjustment.
Dr Bollard, most of the media, and our politicians en masse all appear to be on a different page to the 2025 Task Force, and The Treasury, and the New Zealand Institute, and the Savings Working Group. Not to mention Just Wondering.
It’s a worry.