Dr Michael Bassett

Dr Michael Bassett

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Is Paul Henry Correct that New Zealand could be Collapsing?


Was Paul Henry correct when he questioned whether New Zealand is on the skids? It's something we need to ask now that our migration figures show we lost huge numbers of people last year who have gone overseas for greener pastures. The grizzles from Wellington, and particularly from the wrongly-named Public Service Association about the departmental layoffs, verge on the bizarre. What do they expect when a grossly extravagant Labour government increased the size of the bureaucracy by one third in six short years, producing no discernible improvement to outputs? And the sight of hundreds of young people in the streets last weekend baying against the "Fast Track" legislation only adds to Paul Henry's argument. Too many Kiwis seem no longer interested in policies aimed at growing the national pie: they just want to eat their diminishing slice now, and clear off overseas if they are still feeling hungry.

The intention of the Fast Track legislation before the House is to grow the pie. Its goal is to produce a process for quicker delivery of infrastructure and development projects with regional and national potential. The goal is to step up New Zealand's economic growth. Planning legislation started in the 1920s and successive governments added to it, culminating in the Resource Management Act, 1991. Regulations became ever more complex, slowing the issue of consents for private and public developments. Over the last 30 years, many small RMA amendments have failed to speed up growth and chronic constipation set in as the planning process retarded new development. The Coalition government has come up with a relatively simple solution whereby applications to a handful of relevant ministers for a consent can be referred to a panel of experts to examine. If they deem the proposals worthy, and they don't threaten Treaty settlements or other specified sacred cows, then the experts can, using their wisdom and experience, recommend back to ministers that consents be granted. The final decision rests with the ministers.

New Zealand's economic growth has been lack-lustre now for the better part of twenty years. Australia, and other countries we have always benchmarked ourselves with are pushing ahead at a faster pace. Increasingly, we look like a quaint backwater rather than a country among the top five achievers that we were in the early 1950s. The Fast Track idea therefore deserves support.

But there are plenty of naysayers who know the value of everything and the real cost of nothing. They prefer bureaucrats in make-believe public service jobs, never thinking about the millions added to the deficit as a result. Worse, the naysayers have the media on their side. Radio NZ, the TV channels and the print media, especially the New Zealand Herald, are full time criticising the new government's attempts to reel in unnecessary spending to reduce the national deficit. Which raises a key question relevant to Paul Henry's question: education. Why are most Kiwi journalists these days economically illiterate? We know that school achievement levels in most areas have been sliding, but it appears that tertiary standards have also slipped, and that journalists arrive at their desks with little knowledge about what produces the income side of the government's ledger. They know plenty about what they'd like to see ministers fund, but care little about where the money comes from. It's "feeling good" and "being kind", Jacinda Ardern's mantras that spring quickly to their minds. As soon as a human interest story like the saga over funding cancer drugs emerges, or fixing our roads to expedite transport ahead of big additional funding for disability services, today's journalists quickly lapse into feel-good mode.

The result of many years of failing to tackle the income side of the national ledger is that Grant Robertson left behind an additional debt of $90 billion which has taken our total debt to about 44% of our gross domestic product. That debt is having to be serviced at a time when interest rates are much higher than they were when Labour came to power in 2017. The Coalition faces tough choices. Mining for further oil, gas and minerals must be promoted, and when we see the list of schemes before the Fast Track Committee there will be lots of other potential solutions for our budgetary problems that will test our collective minds.

Whether we can face up to that challenge will be the answer to Paul Henry's question. At my age I'd love to be optimistic, but I fear those migration statistics will continue, egged on unwittingly, by the educational failures that are daily on display in our media.