On this site, we are in agreement that we urgently need a clear, coherent economic strategy that resonates with the country, and leads to great outcomes.  To achieve great results will require:
 
(i) a single, clear “organising idea”
(ii) a new form of national dialogue
(iii) improved public-private sector trust-based relationships

However, almost as important as ‘what’ the strategy is, is ‘how’ the strategy is created and then executed.  In my view, policy making in New Zealand has recently come to be characterised by its secrecy, its closed nature, and its insularity.  The public sector sees the private sector as ‘vested interests’ and thus, despite their training, naturally discount ideas as being driven by purely pecuniary interests. The private sector see public sector as out of touch, irrelevant and politicised.  Neither of these views are true.  Both need addressing, and the past approach will not do that.

There have been a lot of comments on this on the blog.  Some comments on this so far on the NZX Blog:

Jane said, “The government should be “of the people”, not a fortress.”

Baruch said, “… build a wider constituency of support”; and

Peter said, “[put] these concepts in a simpler format”.

When the private sector is engaged, it typically manifests as large committees, ‘talkfests’, and other inauthentic engagement, with most of our contributions inevitably disappearing down a black hole.  We need to avoid jamboree type talkfests with large numbers of people (a la Knowledge Wave, Ruddfest).  Equally small, ‘closed’ groups hatching plans in closed rooms, will not get it done. 

We think that there is a very large and diverse group who should be part of this debate, and this group is all Kiwi’s - whether living here or expat.  The question right now is, how to best engage all their talent and ideas? 

I have some thoughts as to how this could occur, but would prefer to hear from everyone else first, especially the online community, as to the “how”.

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Hi All,

Thanks for your interest in the “Measurable Goal” initiative.  The campaign has built a real head of steam since we launched it a couple of weeks ago, so we thought we’d send out an update on progress and next steps (for further detail, please check out the attached PowerPoint document).

The NZX blog (www.blog.nzx.com) has had great support and the message has spread to New Zealanders around the globe - visitors to the blog have come from 39 different countries!  The campaign has also received significant press, radio and television attention: TVNZ, TV3, the New Zealand Herald, the Dominion Post, the Sunday Star-Times, the NBR, National Radio, Radio Live and Newstalk ZB have all covered the Measurable Goal idea.

Importantly, the concept is starting to gain traction with political leaders. The National-ACT Confidence & Supply agreement includes a commitment to closing the income gap between New Zealand and Australia by 2025, and it states that the new Government will establish an advisory group to recommend policy changes and report annually on progress towards the goal.  We applaud this move towards adopting a long term Measurable Goal and hope to see a similar commitment regarding the progress the Government will deliver in this three year parliamentary term.

Our assessment is that catching up to Australia will probably get us to about 20th position in the global GDP per capita rankings by 2025.  We’d be interested in your thoughts on the government’s proposed goal.  Is it sufficiently ambitious? Is catching up with Australia the right objective?

As the new Government forms and starts to define its policy priorities, it’s time for us to take our initiative to the next stage.  Based on the input we’ve received on the blog and in hundreds of supportive emails, we see three main fronts on which we need to advance:

1. Engaging the broader New Zealand community.

While we’re delighted with the response we’ve had to date, we also recognize that we’ve barely scratched the surface in terms of generating a genuinely national discussion.  We’ve received very useful feedback on how to go about communicating our message more broadly and some of the best in the business have offered their assistance. We’ve also had universities come on board, offering to organise student debates and essay competitions to get the next generation of leaders thinking about where we should be taking New Zealand.  So keep an eye out for a much more public and punchy campaign that will provoke as many New Zealanders as possible to think about a long term, measurable goal for our country.

2. Getting political leaders on board.

The objective of this campaign is for New Zealanders to adopt a simple, probably single, measurable objective for New Zealand - bi-partisan, long term, ubiquitous.  Such an objective will be catalytic in driving holistic policy focus and performance to enable its achievement.  Ultimately, it will hold politicians and leaders accountable for their performance. The adoption of such a goal could take many, many years. However, over the next few weeks we aim to have discussions with senior MPs from all political parties about the Measurable Goal campaign.  We’ll be sharing our analysis of New Zealand’s current trajectory with them and summarising the feedback we’ve received from all of you.  We’ll also be asking politicians from all sides to engage in the public discussion of a goal for New Zealand, since we believe that multi-party commitment will be required to ensure that the goal is not lost in future electoral cycles.

3. Continuing to contribute to the definition of New Zealand’s Measurable Goal.

As we continue to promote public discussion and engage with the politicians, we’ll keep developing our thinking about the definition of New Zealand’s Measurable Goal. Ultimately this won’t be something for us to choose, it will need to be chosen and owned by the broader community.  But we plan to keep contributing to the discussion and providing a forum for experts and everyday Kiwis alike to share their views. We’ve received messages of support and insightful comments from New Zealand leaders in many different fields – business, economics, the environment, academia, the not-for-profit sector, sport and the arts.  We’ll be reaching out to these people and asking them to contribute publicly to the process of defining a Measurable Goal for New Zealand.

The Measurable Goal project is fast out-growing its spot on the NZX blog, so we’re starting work on a dedicated website. We’ll let you know as soon as it is up-and-running.  In the meantime, please continue to share your thoughts at www.blog.nzx.com and pass the message on to friends, family and colleagues.  For those of you in the Facebook generation, we’ve also formed a Facebook group called “A Measurable Goal for New Zealand” (http://www.facebook.com/group.php?gid=34915687764). Please join the group to show your support and invite all your friends, family and colleagues.

Download Measurable Goal - Summary of Responses and Next Steps Here (PDF)

Thanks and best regards,

Lloyd Morrison, Paul Newfield and the Morrison & Co team

Today we have released round two of Swan Dive or Belly Flop?  This version is very different, and, we believe much improved on, the previous version.  

Since the release of “Swan Dive or Belly Flop?” other New Zealand companies, as well as individuals, have been putting serious work into shaping our future. 
 
Download  A Measurable Goal for New Zealand presentation from Morrison & Co for some outstanding analysis and conclusions.

From Morrison & Co - How will you make a difference to the future of New Zealand? 

“We’d like to promote a conversation amongst ALL New Zealanders about our nation’s long term goal – only by broadly agreeing a target can New  Zealanders, through joint ambition, work to get the nation we want. Loose well meaning but unmeasured targets no longer suffice. New Zealand’s relative standard of living has fallen too far. It is time to do something about it!”

1. Do you agree that we need an ambitious, measurable, shared goal for New Zealand? 

2. Do you believe that we ought to set our sights on returning to the global GDP per capita top 10 by 2025?

3. Do you have better ideas?  

You can also download a set of frequently asked questions about the presentation here.

Hey there, 

As the general election date looms, the world’s economic conditions continue to worsen. It’s clear from your feedback that there is a real demand for a clear strategy from those who have the direct authority to enact it. It’s also clear from some of the comments, here and elsewhere, that there is a real concern at the lack of cohesion between the broader public, the public sector, and the private sector. 

It also seems clear that there is a real opportunity for whoever governs to begin anew, and take the risks we face as a unique opportunity to engage more broadly. Sadly, there seems a real skepticism that this will happen. Instead a view is widely held that ministers will receive briefings from officials with good intentions but no real world experience, and that policy will be formed in secret, and announced as politics. 

Given that diversity is a key public sector value, we are sure - given the right forum - they would love to engage. 

Thus, there are two questions we’d like your views on:

What level of public engagement should there be (and by this we mean private sector, public sector, interest groups and government) in making those decisions? and
1. What would the most effective means of making that engagement happen? (How do we ensure it’s not another talkfest, but not another government-only-secret-squirrel-fest either?)

Post your responses here.

We’re two weeks out from the release of our original draft strategy, and the economic face of the world is wearing a decidedly unhappy expression.  This piece from a BBC blog is particularly telling. 

“Swan Dive or Belly Flop?” is doing its job.  There are some exciting and pragmatic ideas being generated on this blog, and real galvanisation behind the idea of a “vision” for New Zealand’s economic future.  By “vision”, our bloggers don’t mean “slogan”.  We all know the downsides of sliding into sloganism.  They mean a strategy with a set of clear organising ideas, with clear outcomes, so we all know what we’re working towards and, importantly, can measure along the way how far we have to go before we’ve achieved it.  

Feedback has been outstanding, and will be incorporated in the next version, to be released next Friday. Feedback has refined some ideas, added others, and forced us to look very hard at some of the original ideas.  Some people have certainly disagreed with us.  Great!  Fantastic!  Did we say we had all the answers?  Don’t think so.  What we did say was that the discussion and debate had to be had - and now - if we were to take advantage of the opportunities the current crisis has opened up for this country.  

One idea in particular has received a lot of attention. While we’ll address it in detail in the next version, it is worth briefly noting. It is the home focus proposal for the NZSF and taxpayer savings pools. It has been criticised as impure. We’ll address the positive reasons for this approach in the document, but it’s worth debunking the theoretical criticism. Under the perfect asset allocation theory (i.e. the “best practice asset allocation” of the NZSF mandate), each country, and individual, allocates capital efficiently according to portfolio theory. If this is the case, then local capital and foreign capital are perfect substitutes. Hence, all local investment opportunities are taken up, because the perfect amount of capital is allocated to each country. 

But how does this work in the real world for a small country like New Zealand, that chooses to export its major pools of savings for investment? Well, it only works if, and only if, the rest of the world has no home bias, and allocates their savings globally perfectly in accordance with that. As we know, home bias is real, it is strong (e.g. over 70% of US savings are invested in the US yet is is 25% of the world economy), and - to the extent that New Zealand bases its savings direction policies on a theory that breaks down in practice - we’re consciously creating an underfunding situation at home. Working through this market failure, systemic home bias in countries with savings pools bigger than ours must result in plentiful underfunded investment opportunities in New Zealand. Accordingly, the efficient (i.e. lowest cost, highest return) portfolio decision for an asset allocator in a small country with a global home weight bias, is to significantly overweight home investments, as that’s the main place returns will be not competed to the lowest level for the investor.

Another key point that has come through is the lack of cohesion between the public and private sectors, and a lack of trust in the public sector’s ability to execute a strategy, and engage the public in it successfully. A number of ideas came through on how to address this major execution issue, and they will be in the next version. 

While there are real differences in views on some issues, regarding the idea that real, urgent and strategic action is what will define the success of this country into the future, there is consensus. We agree.

Today NZX and NZ Institute today released a further announcement on the Swan Dive or Belly Flop? draft strategy that was released this time last week, outlining next steps and an update on feedback that we have received so far.

You can download the full release here and we encourage you to continue to provide input to the strategy here on the NZX Blog.