Saturday 24 May 2014

New Initiatives

Roger Partridge, Chairman of the New Zealand Initiative, writes on upcoming projects at NZI:
New initiatives for a better New Zealand
Roger Partridge | Chairman |
Last week the New Zealand Initiative joined the chorus of approval for Finance Minister Bill English’s fifth budget. And rightly so. The budget confirmed that the threatened “decade of deficits” has been averted by careful fiscal management, to the envy of New Zealand’s OECD peers. Unlike his counterpart across the Tasman, Bill English could be forgiven for performing a pre-budget speech jig.

But while we may have become the envy of our Australian neighbours, New Zealand’s medium term growth prospects are hardly stellar. Over the five-year forecast period, New Zealand’s average real gross domestic product growth is forecast at only 2.8 per cent, well below the rates our economy achieved for much of the 1990s.

The forecast growth is even more miserly when compared with many of our neighbours in the Asia Pacific region. Singapore’s forecast for real GDP growth of nearly 3.5 per cent over the next five years makes New Zealand’s prospects look a little pedestrian.

There are many big issues for our policy-makers to tackle:
  • New Zealand’s international ranking in educational achievement has fallen. Up to 30 per cent of primary school students are not meeting national standards in literacy, with significantly lower rates for Maori and Pasifika students. 
  • Nearly 8 per cent of the population is dependent on some kind of welfare benefit, and that’s not including superannuation. 
  • In a global context, New Zealand could certainly do better. Our ranking is poor in the OECD’s FDI Regulatory Restrictiveness Index. 
  • Productivity is another issue, as New Zealanders work about 15 per cent longer than the OECD average to produce about 20 per cent less output per person. 
We believe new thinking is needed in these areas.

In our first two years we have developed solutions to assist our policy-makers tackle the housing affordability crisis, address the very real concerns many of our parents and schools have about teacher quality, and respond to the alarming decline in New Zealand’s international attractiveness as a destination for foreign investment. We have been pleased with the receptiveness of politicians on both sides of the House to our ideas.

As our organisation has developed the strength and depth of its research team, and with the appointment of Dr Eric Crampton as our new Head of Research, we have the confidence to tackle a broader range of issues. Yesterday the Board of the New Zealand Initiative approved an ambitious plan for our team to develop research-based solutions to many of these issues.

We will be looking at compact cities, demographic change and the housing market, examples of teaching excellence, New Zealand’s natural resource opportunities, the case for economic growth, New Zealand’s fiscal future, improving numeracy and maths teaching methods, examining the scope for social bonds in New Zealand, and the effects of household saving policies. And these are just some of the projects we will aim to tackle over the coming years.

We are confident we will come up with innovative thinking in all these areas. If our policy-makers listen, we will see our Kiwi economy really fly. Watch this space.
I'll be helping out with many of these projects when I come in at NZI, then, I expect, helping to shape new project proposals.

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