A Weekly Report from the Keyboard of Murray McCully MP for East Coast Bays

The Shaky Isles

The Australia-New Zealand Leadership Forum saw senior politicians and business figures from both sides of the Tasman congregate in Sydney last Sunday and Monday. These annual meetings provide an opportunity to take stock of progress towards a single economic market totalling 24 million people. Discussions are confidential and may therefore not be reported, even in this humble publication. Not confidential, however, is an excellent briefing paper provided by Dr David Skilling of the New Zealand Institute, highlighting the scale of the economic and political challenge ahead of those from this side of the Tasman.

Produced from publicly available sources (Australia Bureau of Statistic, Statistics New Zealand and the OECD) the Skilling paper shows that Australian GDP per capita at A$47,181, is now about 30% higher than in New Zealand (A$33,682).

Graph courtesy of The New Zealand Institute

Broken down by state, the Australia/New Zealand comparison looks even worse. Top performers in terms of per capita incomes are the resource rich Northern Territory (A$59,649) and Western Australia (A$58,688). New South Wales (A$46,973) and Victoria (A$46,148) come in fractionally ahead of Queensland (A$45,369). The lowest per capita income amongst the Australian states is in Tasmania, at A$35,253. But even Tasmania heads off the New Zealand figure of A$33,682.

Chart courtesy of The New Zealand Institute

All of which makes very alarming reading. And raises the very good question as to why our Government seems so comfortable with such a lamentable state of affairs.

Top Half of the OECD

Remember the heady days in 2001-2 when our Prime Minister proclaimed a government objective of propelling New Zealand into the top half of the OECD within ten years. Sobering comparative numbers within months had her dumping the ten year timeline and asserting that the goal of reaching the top half of the OECD stood, but the ten years did not. And later still, she decided to dump the whole concept. Like “Closing the Gaps” (remember, the flagship policy of her first Budget) “Top Half of the OECD” was banned from the language.

The OECD numbers cited by Dr Skilling provide a small clue as to the cause of our Prime Minister’s rapidly diminishing enthusiasm. The OECD per capita GDP comparisons show Australia firmly ensconced in the middle group of OECD economies. And New Zealand, clearly, is not. Nor is it threatening to burst into the middle group any time soon. Which is hardly surprising, because our Government has now abandoned that worthy goal. And that is a very great pity, because the long term consequences are very serious indeed.

Graph courtesy of The New Zealand Institute

700 Per Week Voting With Their Feet

The most tangible result of these appalling comparisons is that Kiwis with choices are simply voting with their feet. The most recent figures from the Government Statistician show that for the year to March 2007, 36,510 New Zealanders departed from our shores to live in Australia. More than the population of a city the size of Gisborne in the last twelve months. That’s just over 700 per week, each and every week, or 3,000 per month. And we know from previous research that those with qualifications will be disproportionately highly represented amongst the departing.

As long-term readers of this publication will recall, this theme, and the official numbers, have been regularly rehearsed in the past. But the statistics just keep getting worse. And the government just keeps on not caring. So the growing wealth gap with Australia will, based upon increasing exports of New Zealand talent, simply keep growing bigger. Until, of course, we actually get a government that thinks that it does matter.

ENDS

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