Oops – our well-being is likely to be bruised as NZ slips down international rankings and we slump on economic performance

For long  enough   New Zealanders  have liked  to  think  they  enjoyed  one of the highest living  standards in the  world. More recently those  familiar  with what  is  happening in those  countries  which are  leading the  world have  understood  NZ has  been  slipping  down  the  ladder.

Under  a  Labour-led  government,  the  slide  has  accelerated. Now   as  inflation  surges,  and  recession is looming on the  horizon, new  questions are   being  asked    about  the  economic  stewardship   of  the Ardern  government.

Has  too much  been  left  to  the  Finance  Minister  Grant  Robertson?  How   has  he  done   in  his   fiscal management?. Why  is  inflation  burning  so  fiercely? What  has  happened  with  his  concept  of  “well-being”?

One  of NZ’s  most experienced  economists, Bryce  Wilkinson, has  drawn attention to  the  latest  rankings of 63 of the world’s leading countries by the Swiss Institute for Management and Development (IMD).

Back in 2017, New Zealand ranked #16 – ahead of Australia at #21.

Five years later, New Zealand has fallen to #31, while Australia is ranked #19.

In economic performance, NZ has  fallen  from #22 to #47.  Government efficiency  is  down sharply from #7 to #17.

Altogether, the IMD’s ranking comprises 25 subcategories. In eight of them, NZ finds itself in the bottom half of all countries.

These are the categories that really matter: domestic economy, international trade and investment, inflation, productivity and efficiency, attitudes and values, and technological infrastructure.

NZ,  it might be  said,   became  preoccupied   with  the  Covid-19  pandemic, and  took  pride In  achieving at its  height  one of the  lowest  death  rates in the  world.  And  it  did  maintain for  most an  even  keel  through  that  period and   Robertson  liked  to  trumpet NZ’s  low  employment  rate.

But  in  that  period   two  of NZ’s significant  export  earners, tourism   and  international education, were  hard  hit. And  there   wasn’t  much  else  to  take  up  the  slack, except  massive  injections of  printed money which,  admittedly  with  the   benefit  of  hindsight, kept  being  pumped  into  the  economy long  after   it  was needed.

At  the  time Robertson  and  the  Reserve Bank) were looking  at negative interest rates, so unconcerned were they about the inflation that  was brewing.  Now in  the  wake  of  the  cost of  living  crisis that has come to the boil,  New  Zealanders  are    feeling  the  scalding heat.

There’s not much  sign  of  the  well-being  so beloved  by  Robertson  that  he  wanted  to   incorporate it into  the  work  of  bodies  as  esoteric  as  the Productivity Commission.

The  government  for  long enough thought  it  was  solving  the  country’s problems   with  its money-pumping  exercise  and measures such as its  fair-pay  legislation.  Meanwhile  it  neglected  or  ignored   what  was  needed  to encourage  new  enterprises  which  would  broaden   the  productive   economy.

NZ’s  hi-tech  industries  in  particular can offer much if  they  receive  full-throated  backing  in  their  initial  development.  But since  February this year equity markets have been in free-fall, down by 20% or more. That  has  cast  a  pall  on   investors   and  most  businesses  have  had  to  batten  down  the  hatches.

No  wonder  many  New Zealanders  are  baffled  by  what is  happening to  their  Kiwisavings funds.

And at this  point in   the  life  of  this  government,  it  would  be  hard  to  award  a  pass mark  for  its  economic  performance.

3 thoughts on “Oops – our well-being is likely to be bruised as NZ slips down international rankings and we slump on economic performance

  1. ‘And at this point in the life of this government, it would be hard to award a pass mark for its economic performance.’ Because of that it’s even harder to give it a pass mark for other performance on the other measures of wellbeing.

    Liked by 1 person

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