Do We Really Want More Of The Same?
Hon Sir Roger Douglas, ACT New Zealand

Tuesday, April 21 2009

The OECD report released last week confirms all of ACT's warnings: New Zealand is one of the world's most indebted countries, has one of the largest current account deficits, and has had low productivity growth for the past 12 years.

This has created a low-wage economy - but Finance Minister Bill English is unwilling to heed the report's advice.

Denying reality is never a good way to determine policy. National must seriously consider the OECD's advice and, unless he considers all the options on the table, Mr English cannot claim to be genuinely interested in fixing the economy.

But Mr English continues to either sit on his hands or move in the wrong direction. While the OECD tells us to sell poorly-managed State assets, National promised to retain State assets - and is now beginning to stack them with political appointments just as Labour did.

The OECD reports that health spending is out of control and can only be tamed by introducing greater public/private competition. National TALKS about allowing competition in health services - but we need action. We need to privatise ACC and utilise private health services before we will see any benefits.

Further, the burgeoning cost of superannuation caused by retiring baby boomers is unsustainable. If we act now, we can decrease the pain in the long term. In the short term, the age of entitlement will have to rise - as the OECD advises - or we will continue to slide behind other nations even faster. In the longer term, we must move away from the current superannuation system towards one that encourages people to save.

When you're in a hole, you need to look at all possible ways to get out. We shouldn't ignore advice simply because Mr English doesn't want to hear it. In fact most of the advice, if followed, would create the kind of growth that occurred from 1984-96. While Mr English is not listening, Labour is moving in the opposite direction to that needed - continuing to have faith in politicians and bureaucrats to spend money more wisely than individuals.

There's an old saying: 'if you always Today, after 12 years of Labour, the average family is $50,000 worse off per year than they would have been with lower taxes and higher growth. Are you really willing to make that sacrifice again so that smug politicians in Wellington feel powerful?

Alternatively we can aim for productivity growth. The reforms of 1984-96 created a platform for high growth, high wages, and healthy economic wellbeing. The OECD is asking us to consider our options and, when you're stuck in a hole, you have l

ENDS

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