New Zealand lacks a common purpose. No one knows exactly what we want. We hanker for a return to the times when we were one of the wealthiest countries in the world. We want everyone to be better off, knowing that individual wealth does not result in freedom from crime and the social fallout of excessive disparity. However, there is no clearly articulated goal we are pursuing and no solid plan of how we can get there.

As a result, there is no definition or accountability for policies or policy-makers. Policies are often clothed with loose positive objectives and ultimately ineffective aims. There is no co-ordinated accountability for these policies (or politicians) in terms of their ability to contribute towards a common measurable outcome. Consequently, we continue our steady decline. As the attached analysis shows, current forecasts have our GDP per capita slipping below Kazakhstan and Botswana by 2025.

I’ve been discussing this with colleagues and friends, and we believe that NZ needs to embrace a common objective that will provide the means to deliver what we are seeking as a nation.

Whatever the objective chosen, it needs to be simple, clear, measureable, understandable, aspirational and, most importantly, catalytic in terms of driving positive change that makes the outcome achievable.

We’d like to stimulate a broader discussion over what that goal should be for NZ. To kick-off the debate, here’s our starter for ten: NZ should aim to be back in the top 10 countries in the world based on GDP per capita by 2025. Not just the OECD, the world. Unachievable? No way. Ireland, Korea, Singapore and Taiwan all achieved the required level of growth over the last twenty years. It will take real collective commitment and more creative thinking about our economy – but that’s exactly what an ambitious goal will generate.

I’m hoping you’ll participate in a broader discussion about an aspirational, measurable goal for New Zealand. Please read the document here on the NZX Blog. Pass it on to your friends. Participate in the debate by emailing measurablegoal@hrlmorrison.com or contributing to the forum here on the Blog.

If you agree with what we’re proposing, show your support. If you don’t, please share your ideas for a national goal. Together, let’s take the first step in defining and delivering a better future for New Zealand.

Agree with Galia that this is a great initiative. And yes, absolutely we need an ambitious, measurable, shared GOALS for New Zealand. However, we need more than a single goal. GDP is not the way to go – it is an imperfect measure of economic activity only. We need goals that measure genuine PROGRESS rather than just an increase in economic activity.

Genuine Progress Indicators (GPI) (see http://en.wikipedia.org/wiki/Genuine_Progress_Indicator#Results) measure improvement in the well-being of the people of a country. There is a lot of work being done around the world and in New Zealand (see http://www.anewnz.org.nz) to develop and promote internationally comparable GPI figures. Improvement in GPI is what we should be aiming for, not GDP. Your great initiative will be an excellent one if you take the brave step of setting a GPI goal rather than a GDP one.

We agree fully with Lloyd’s vision and suggested goal.

For what it worth we published this short essay on how to climb back up the ladder on 16 June. To date New Zealand has failed to rise to the challenge posed, indeed we have probably gone backwards

Executive Summary

The stars are pretty much aligned our way. The world is prepared to pay more for what we produce. Free trade means we can maximise returns. Last time things were like this we became the world’s wealthiest country in per capita terms. Don’t muck things up with a poorly thought out and rushed emissions trading regime.

Essay begins

For pretty much all of the author’s life we have been told that New Zealand is in the wrong space being so export dependant on agriculture, fisheries and forestry. Emphasis has been placed on building an industrial base and then a knowledge based economy. Even over the past 8 and a half years the focus has been on a growth and innovation framework, economic transformation and most recently sustainability. At their heart these processes have been designed to de-emphasise our focus on primary production. And there are now Government officials (we wish the new CEO at MfE well and are pleased that he has come from MAF), interest groups and political parties that are actively seeking to constrain growth in, or even reduce production from agriculture. [At a meeting a couple of months back a study which predicted the last meat and wool farm closing in 2026 was being discussed. Everyone around the table appeared deeply concerned. Then one voice piped up - "Hang on, is this necessarily a bad thing? Doesn't anyone else agree with me" It was the representative of a well known environmentalist group.]

But the world has been changing. Underpinning the desire to move away from primary production has been a paradigm which assumes continuing increases in the value of industrial and services products and a continuing decline in the value of commodities, particularly agricultural commodities. Today, we have seen a steady decline in the value of manufactures (thank you China and Vietnam) and no appreciable increase in the value of the most commonly traded services (until very recently the real cost of travel and tourism has been in decline for years, and the only reason why it is increasing right now in nominal terms is to pass on the costs of higher fuel costs). But food, and other commodities are being more valued by the global economy. They are being priced as an increasingly scarce and valuable commodity. The effects are obvious in dairy. They are beginning to be seen in meat also (drought in Australia and New Zealand has meant that killings have been higher than normal, thus flooding the market with more supply than would be normal. Longer term, of course, this means that there are less stock units available to satisfy future demand and higher prices are pretty much guaranteed. Add to that increased demand from China etc. and you have a very nice outlook for the meat sector also).

Some of the smartest people on this planet at present are those running China. They were possibly the first to sense that world was about to change and that they needed to start to think differently about how to ensure security of food supply and of other essential commodities. Chinese diplomacy toward Africa, Latin America and Australia/New Zealand has been driven by these concerns for the last five years or so. The FTA we have just signed with China is all about China’s food security concerns and about its desire to reform its agriculture system further. It needs to move more people to the cities but how are they going to be fed? Increased imports and the adoption of a more efficient agriculture model at home. New Zealand can help in both areas.

The UAE, some ASEANs, the Koreans, Japanese and Indians have become fast followers of China’s lead. All are seeking to secure continuing interest from New Zealand exporters in supplying them. How? By reducing barriers to trade and by offering the opportunity for better prices.

Thanks to the Uruguay Round and CER, New Zealand is already enjoying the best market access conditions since British entry into the EEC. In a few years, things will have improved further and New Zealand will be enjoying preferential access conditions into almost all its major export markets. And the products being exported will be enjoying higher prices than anyone dreamed possible a few years back. Rather than regarded as a weakness, being the only OECD economy with an economy so dominated by agriculture, forestry and fisheries, this is increasingly being seen as strength. Food it literally and figuratively being regarded as the new oil, and we have much more of it than we can possibly consume domestically. And, we can expand production.

On a visit to Europe recently we were struck by the number of fund managers saying what we have just said, and asking how they can take a position directly in New Zealand agriculture (dairy in particular).

Add into the equation our tourism and services export potential, our high tech export potential and our wider resource strengths – the special character of our iron sands, production of the purest aluminium in the world, our 1,000 year coal resource, our 70% renewable electricity profile, and our now economically exploitable oil and gas reserves etc. we are sitting pretty.

If we adopt the right export strategy, link our investment strategy into this strategy – Singapore style -we can lift our wealth to a new plane. Why aspire to the top half of the OECD when we can once again be #1?

Unfortunately there isn’t much strategic thinking going on in this space. Government is more interested in keeping the lid on scandal and winning an apparently unwinnable election. This means that they are prepared to risk everything for the sake of possible short term electoral advantage achieved through the passage of an emissions trading scheme. A scheme that will do zip to help the global environment, but which allow it to portray National as uninterested in the environment, and which will allow the PM and her Climate Change Minister to look good at international meetings (something that also sometimes wins votes at home).

Unfortunately the scheme will have serious side effects. The aluminium and steel industries have already signalled short term that this will mean deferral of investment. Loner term it might mean exit. The scope for dairy to expand will be severely constrained, and it and wider pastoral agriculture might decline. Forest plantings are likely to expand but harvesting the trees will be penalised. Exploiting our sustainably managed fish stock might cease because of increased costs. And will we really be able to make the most of our coal resource under the proposed regime (a coal liquefaction industry doesn’t exist so will get zero free allocation under the currently proposed rules). And the proposed policy will lead to a decreased competitiveness for our tourism, education, and manufacturing industries.

In summary, we are about to throw away our opportunity to move back up the growth ladder. We can’t do this to ourselves – can we? Can’t we just take a bit more time to design a scheme that delivers a good environmental outcome and allows us to take full advantage of the economic opportunity that is there for our grasping?

The next few weeks will tell.

Completely agree with a goal. Politicians shy away from this, because it creates something upon which they can be judged. At this point in time, a clear goal is exactly what NZ needs. Not sure GDP per capital is perfect, but not sure either what is better. NZ is very good at academic debate and theory, not not action. So, while GDP per capita may not be perfect, lets run with it, and be transparent about the things that politicians could use to artificially inflate performance against this measure (e.g. restricting immigration – which would be bad for the economy)

It is the wrong goal.

When labour came into power 9 years ago, they stated their primary “goal” as being to get NZ GDP per capita into the top half of the OECD within 10 years.

This indicates to me that the ruling class in NZ do have some idea of what needs to be done. They may not have any intention of doing it, but they know to say the right things.

Our goal should be to achieve effective governance.
Ministers should be measured against achievable/measurable KPI’s, with the minister of finance responsible for the stewardship of the economy, and hence the GDP goal outlined here (among other goals). Under performance should incur very real employment consequences.

The alternative is that a politian takes on the ideas of Mark, Lloyd and Andrew, gets our vote, and when in power does nothing about it…. back to square one.

A great initiative. This is the number one policy issue. All others are subordinate. Maybe if we get a change of govt, we will get politicians behind it,but we have to do it despite politicians and their short-termism and timidity, not because of them. In other words, we have to start a movement, and one with more force than the likes of The Knowledge Wave etc. Count me in.

This country is riddled with too many rules and regulations and top heavy bureaucracy – we need to trim back on policy writers and public servants and invest in quality manufacturing and product.

We need to apply the thinking of Thomas Edison:

There aren’t any rules here – we are trying to get something done.

I agree with the objective here and the need to raise the issue in a public forum. This has clearly touched some nerves as many are frustrated that New Zealand is failing to reach its full potential.

New Zealand is a great country with so much going for it, but fails miserably to even understand what it has, in terms of potential. Since coming to New Zealand I have seen several very skilled people leave after becoming frustrated with New Zealand business.

New Zealand wealth
Much of New Zealand’s growth has been new money coming in. There is an immigration policy that allows for the wealthier Americans and Europeans to move to New Zealand. This sounds good, particularly the impact upon real estate prices (I am sure many politicians are not disappointed with the results this has upon their house prices). But this is not real growth.

New Zealand business says we need skilled people from overseas and NZX & NZ institute is promoting this philosophy. I can’t help thinking “the mind is willing but the spirit is weak”.

Ireland
Ireland could see it had an advantage over its neighbours. It had low costs (salaries particularly), reasonable infrastructure, the same single currency as continental Europe and English was the first language. It then provided tax advantages for financial service businesses, a skilled population and a desire to swallow all pride to achieve its objective. It promoted itself internationally and was taken up on its offers of low tax, government assistance and a stepping stone into Europe. Many international businesses, including many London based firms have an office in Dublin. Unit Trusts prior to being marketed across Europe would register in Dublin.

The approach of the Irish Government has led to greater real wealth, rather than perceived wealth by individual’s money coming into Ireland. I cannot recall anyone desiring to deal in an Ireland milk or potato future or having an overwhelming desire to list on the Dublin exchange, yet the financial services industry in Ireland would be the envy of many nations around the world.

All Blacks coach syndrome
I call it the All Blacks coach syndrome because there is a desire by all who love the game to see the All Blacks win, but under no circumstances can the coach ever be a non-Kiwi. You can have all the support staff from overseas, learn as much as you can from overseas, but pride would not allow there to be a non-kiwi coach the All Blacks.

In New Zealand business, I and many I have spoken to, have found the same. We need your skills, we want to be the best, but when the world looks at us we want them to see all Kiwi’s at the helm. The attitude would have to change if we are to see success, is it prosperity we want to see or see a Kiwi being the best? I am not suggesting a Kiwi cannot be a world business leader, but what do we want, prosperity or prestige?

New Zealand’s opportunities
We have cross Tasman agreements, English as the first language, skilled population, reasonable infrastructure and location within SE Asia. What is lacking, if we were to compare ourselves with Ireland, is: low costs, the same single currency as Australia, tax advantages for financial service businesses and a desire to swallow all pride.

I love New Zealand and if only it knew what it had to offer the world, and not more farming. Farming should remain the “bread & butter and growth should come from resources, service and finance industry.

Politicians are just that, political, they are the public servants of the country they serve. If the government pushed for radical changes that would encourage business growth, this would only come as a result of public opinion. I hear the words of New Zealand business but as yet I see no mindset change that would enable New Zealand to grow. It’s no different from an Olympian says, I want to win Gold! So what! we might say; how and when?

Excellent initiative. Virtually identical to the ACT party’s 20 point plan in this election. Sadly, ACT is polling at around 2%. While the goal is admirable and desirable, and is probably supported at a high level by many New Zealanders, support quickly unravels when discussion moves from ‘what’ to ‘how’. With the ‘how’ comes the chill winds of competition, personal responsibility, inequality (risk needs to be rewarded ….) etc. I fear that NZers are no longer up to this sort of challenge. Please prove me wrong.

Don’t forget that people like Ron Trotter and Alan Gibbs put a lot of money early on into the “ACT Project”, which was designed to do more or less exactly what you are proposing. Essentially it’s all a bit scary for the vast majority of NZers.

I support this initiative – we need to get off our butts and do something about the awful economic state of our nation.

I agree with Chris Milne – if what is being mooted is really what our economy needs then Act should be gaining much more support than 2%. Or have Kiwis just gone soft on what needs to be done? It appears that National is becoming so ‘centrist’ that if they succeed at the polls they are going to need some ‘back-bone’ so why don’t we give our party vote to Act? (Rodney is a ’shoe-in’ for Epsom so the vote will count).

Hi All,

I’m one of the team at Morrison & Co that has been working on this initiative. Thanks to everyone who has participated in the discussion so far. It feels like this idea has really struck a chord – the message has gone viral, our in-boxes are overflowing with responses (60+ in the last few hours) and the media has started to pick up on the story.

So far I’ve seen three main strands in the responses:

1. Very strong (but not quite unanimous) support for the idea of focusing on a measurable, long term goal.

2. Some debate about whether we should make an economic measure (such as GDP per capita) the overarching goal or whether it needs to be combined with social and environmental targets. This is an excellent topic for further discussion and one we’ve debated internally at Morrison & Co. We came to the view that a single, simple goal would be more powerful and that a genuinely long term commitment to economic growth would bring with it a commitment to protecting the environment and investing in social development. But we’ve also seen some very intelligent contrary views, so we’re keen to hear more perspectives.

3. A broad spectrum of views on how best to achieve the target. While our initial focus has been on defining a goal, it’s only natural that we all want to leap to discussing how we get there. The suggestions we’ve received already range from going back to Think Big and high tariff barriers to pushing more aggressively down the free market path. It’s great to see people from a wide range of political positions engaging in the debate. I’d encourage you to stay connected with the “Swan Dive or Belly Flop” discussion as the NZX and NZ Institute continue to discuss NZ’s economic strategy (see http://blog.nzx.com/2008/10/two-questions-for-you-on-public-engagement-and-decision-making/)

Finally, I have to commend one of my friends in the media for a fantastic piece of data misinterpretation. On reading our slide showing that NZ’s ranking in hours worked per person has gone up dramatically while our GDP per hour worked has declined, he sent me the following reply:

“I looked at your document and on page 7 it shows there’s a clear correlation between working less and earning more. I feel I’m doing my part.”

With insightful analysis like that from the media, it’s hard to imagine why New Zealanders aren’t more aware of our economic decline!

Keep posting,
Paul

nice one Paul -great initiative by you guys.

Just like a busines, I think a country needs a vision and a goal (or series of goals) to strive for. Unfortunately our political system encourages short term thinking hence no real vision comes from that quarter. Our malaise I think is caused by the fact that we live in a kind of paradise….we think we have all that we want here in terms of natural resources to facilitate our pleasant lifestyle. Its a bit like the boiled frog syndrome -putting it in a pot of water and turning the heat up slowly and it doesn’t notice its being boiled to death. As a nation we need a kick up the backside to get us out of our false view of our paradise. However somehow we need to “see” what the potential looks like..if we can’t grasp that in our imaginations then we’ll continue to accept the status quo, which in reality is the slippery slope

good luck with the initiative!

Something short and snappy, eh?

Stay here, earn more, work less.

An overarching long-term goal for New Zealand is a fantastic idea, and this moment is the best time possible to launch the debate. Changes in global power, technology and the environment were already forcing us to revise our worldview, but the financial crisis has delivered the sharpest shock to many of our long-held assumptions.

I hope it will galvanise us to come up with bold and creative responses.

I’m not sure, though, that the suggested aim of returning to the global GDP per capital top ten is the right one. I’m convinced by your arguments on the need for improvement in this area, but I don’t feel that this aim inspiring or transformative enough.

I think if we want to bring on board a large cross-section of the public we need to frame our goal such that all kinds of people can understand it, believe in it, and feel that they can contribute to it. We want an attitudinal shift, right? This GDP goal comes with baggage. It has, as people have pointed out, already been invoked by both sides of the political spectrum – without, it seems to me, gaining much enthusiasm from the public – and risks bring the debate down to partisan bickering.

The thing that really struck me from the presentation was the decline in productivity. Working longer but producing less – that’s frustrating and worrying, and something people can recognise on an individual basis as well as in national stats. What if you refocused the goal around increasing productivity? We can all believe in working smarter, recognising opportunities, solving problems and reducing waste – as individuals, groups, organisations, and as a nation.

Working longer and producing less- not good!

How is this happening when the tools and technology we have at our fingertips continue to develop and open up new opportunities for business that didn’t exist before?

We are not short on hot ideas and creative people to make them a reality. It seems some people have become apathetic to the idea of success.

We’re not going to be successful unless we want it and we work for it. We need to support bold leaders with vision and expertise across individual sectors. Also, cultivate the next generation of those who are passionate and want to do the same.

Let’s make tall poppy behaviour absolutely shameful. We don’t tolerate unconstructive negativity from those sitting on deck chairs on the sidelines.

As for innovators, lets prioritise and support their aspirations. Allow creatives with an idea and loads of energy to run with it. Remove unnecessary barriers to their success. Let’s make this group as celebrated as the First 15 and help as much as we can with mentoring, resources and exposure.

I think it was Geoff Ross that said something along the lines of there would be no brain drain if there was a reason to stay.

I fully support the concept of creating a goal for New Zealand, but:
- it must be a goal “owned” by the widest possible groups of New Zealand stakeholders, because they were all given the opportunity to define that goal.
- while its long term goal might be to achieve a specific target by say 2025, it must have intermediate say 2 year targets with defined measures to enable success or failure to be readily assessed, if the on-going interest and support from all New Zealanders and expats is to be maintained.
- having established the agreed goal, the “widest possible groups of New Zealand stakeholders” must agree “HOW” the next intermediate target can best be achieved. And these “HOWs” which will create the “New Zealand Strategic Plan” must be constantly updated as circumstances changes.
- some “vehicle” must be found to enable key Ministers, key Ministry representatives and, for once at long last, our innovative New Zealanders and our loyal expats, to suggest worthwhile initiatives – the very best of which would be incorporated in the “New Zealand Strategic Plan” for the next period. Only if this occurs will all the above stakeholders “own” the plan,
- then the necessary resources must be provided to implement the New Zealand “Strategic Plan”

Only if the above procedure is implemented, will New Zealand begin to reverse its slide down the world’s relative standard of living stakes.

Everybody here clearly shares agreement that a debate about future directions is necessary. And even if this is neither the first time a shared goal is offered, nor the last time it will be drowned in detail, perhaps the most positive outcome will be not in some unachievable ideals, but simply in a growing willingness to question basic assumptions. Using different ideas and different audiences that may be echoed in political campaign meetings and newspaper columns across the country. So Ted, don’t underestimate the value of debate in itself – with the right mindsets taking shape, the ground will be set for the right decisions to follow when the time arrives.

The question of setting measurable national goals and developing strategies has been picked up by one initiative already mentioned above, the group of business and civil society leaders gathered at AnewNZ.org. The most important reflection I walked away with after participating at a workshop about Genuine Progress Indicators is finding ways to account for multiple perspectives in society.

I invite you to read more about alternative indicator systems to the out-dated GDP calculations here: http://rendt.gorter.gen.nz/2008/06/use-of-sustainability-indicators-to.html

A neutral analysis of what has worked -in the long term- in comparable OECD nations would be a good starting place for ideas. For instance, why after “doing all the right things” in the 1980s reforms, NZ has not done any better than Australia with their much more regulated, high-wage economy; or whether the much-hyped “Irish miracle” is now dead in the water as current news suggests. For many years NZers have been selling woefully overpriced houses to each other as a substitute for useful investment- that’s all but ended now, where to from here?

High quality telecommunications, transportation and power infrastructure look to be essential to growing GDP long term, and if they actually work better as SOEs or with strict regulation then it needs to be considered. The very large cash outflows to the foreign owners of core infrastructure is a drag on the entire economy and not likely to help growth.

Interesting discussion.

I fully support this initiative and agree that our country is lacking a common purpose and I would add that we also lack a common identity. It is therefore refreshing to read that some New Zealanders strive at changing the current trend in attitude, ethics and values that this country was built on and still had 40 years ago, but unfortunately let slip away and while many things needed to change and will continue to change, in order to achieve the measurable goal and vision of regaining our position of wealth and well being we are invited to share, we must consolidate and build on the foundations laid by our forefathers who came from abroad either as polynesians, asians or europeans. They were pioneers and had an ideal to better themselves and create a society to be proud of.

Being an immigrant of some 37 years, I have enjoyed every year in this beautiful country, associating with winners in advocating a positive and can do attitude in both my private and professional life and it is with sadness that I witness the direction my adopted country is heading to, politically, financially and racially, then as a result seeing my well educated children taking their skills and talent overseas because they do not see New Zealand improving in the short to medium term. They join thousands who are leaving our shores because our politicians keep putting barriers to democracy and freedom by legislating, regulating our lives to the nth degree, thereby condemning initiative and commonsense and slowly turning the nation into socialist zombies, cocooned into a false sense of well being and being controlled by an overly politically correct state.

Well this is not the way I want to live, as life without risk, failure, excitement, challenges and dreams, is not what Nature intended us homo sapiens, privileged to live on this wonderful planet Earth, warts and all.

I fully support your vision in aspiring to achieve a common goal as a Nation and again reach the top ten placing in the World by 2025. It is doable and we need to get started now.

To achieve any goal, we must be focussed, passionate, disciplined and flexible as the path is not straight and requires re-targetting along the way, however in the end when the goal is reached, the satisfaction is fantastic and then we can get on with the next one.

Let’s be the most well connectected, well promoted lean mean economy in the world!

We’re doing a practical, low cost high gain action by getting all our businesses and entrepreneurs here and across the world together in one online community so we can all take the talk and thinking to the next level and build a highly connected, well promoted New Zealand Global Business Community. It’s called Made From New Zealand.

New Zealand’s Global Business Community – A platform for sustainable growth
The talking and discussion is key to get the thinking moving and the discussion happening across as many people as possible, but the biggest thing all good ideas and thinking lack is the ability to execute them, turn them in to a movement, and maintain momentum. Together with kiwi entrepreneurs and businesses across New zealand and the world, we’re building New Zealand’s Global Business community over at Made From New Zealand http://www.madefromnewzealand.com and if we all get together we’re going to be a lot more connected to each other so we can work together faster on bigger global opportunities, and we’re going to be a lot more visible to the world in the worlds biggest marketplace – Google / Search Engines

We heed to be ‘in’ and ‘with each other’ – lets be the most well connected well promoted lean mean economy in the world. And we’re with you Mark, lets build a strong public capital market, with strong kiwi public companies that work with our small businesses to do something much bigger than we’ve done before.

All right, Lloyd, Tim Norton, Robby – where are your practical propositions to discuss?m As investment, wealth creation and economic growth is physically impossible without someone’s sacrifice of hand-to-mouth consumption or savings – and OD’s – Ownership Democracy’s – priority is focussed on that, shouldn’t we agree on this basic mattter first?
Because, regardless how much we manage to earn, if we consume it all without saving and investing a proportion of it, we are just as poor as when we started, and poverty stricken have nots dependent on charity, when our (ability to produce an) income ceases.
Remember the story of rags to riches within a relatively short time of resources poor Singapore?

I’m not sure if increasing GDP ranking is the right goal, simply because what the heck does it mean? What does it mean to New Zealanders? Mainstream New Zealanders hear financial concepts bandied around day in and day out by Politicians, commentators, the media, but many simply may not understand financial terminologies or concepts. Sure I can see the benefits of a measurable and tangible goal but maybe we should be thinking about something which all New Zealanders would intrinsically understand.

Why are we so averse to providing free tertiary education for all? Why do we think that it is OK to make varsity students borrow money, or make them work part time jobs, to fulfil their academic quests? Why do we cut science, technology, innovation budgets. Why do we force our Scientists to justify and apply for research funding?

How about we think about becoming one of the most innovative, creative and technological based countries. Many have spoken about the No.8 wire mentality – some deriding it for being a “she’ll-be-right” apologetic approach – but I see this more as an ability to revert to first principles: identify the problem then find the solution!

New Zealand has the potential to develop innovative minds and technologies yet time and time again we (Government and Business) sacrifice investment for dividend.

I think a debate should occur and goals should be set. But the sooner we take responsibility for our own future, instead of palming it to Politicians and Government agencies, the quicker we will succeed. We have allowed New Zealand to evolve into a careful, politically correct, SAFE, society that we are constantly bombarded with silliness. Do we honestly believe that banning the smacking or children will reduce domestic and family violence? Will longer prison sentences reduce crime? Will zero tolerance policing work? Does replacing playground surfaces with soft spongy rubber tiles teach children not to fall or that there are no consequences to failure?

I personally support the ideas put forward by Morrison and Co, Skilling, Weldon and others, but I am a 69 year old engineer, a 5th generation New Zealander, and I am concerned that there is too much confusion on prorities in our society for us to be able to reach a consensus on whether we want to go forward, let alone a united vision on how to do so. In particular I cannot see how we can have a serious debate, or reach a consencus, without first addressing our racial divide, currently represented by the Maori Party.

Chris Trotter in The Independent, 30 October issue, points out the problem I see which is that Maori have prorities very different from setting goals for our nation. When asked in a poll “Do you think of yourself as a New Zealander first, or a Maori first?” roughly 70% of maori roll respondents considered themselves maori first, in spite of very likely being aware of the attendant constitutional and political implications.

Maori and others who share their motivations make up a significant constituency. This minority also seem to have occupied the moral high ground, at least in the media, in spite of great efforts to accommodate their needs. Worse than the confusion, there seems to be a form of “moral hazard” involved if the rest of the community attempt to forge a way ahead, leaving said minority to be carried along while protesting that their needs are not being met.

It will be interesting to see what role the Maori Party plays in the next Parliament. It would be nice to think that it might seek to resolve any real remaining Maori issues, then disappear along with the maori seats. Maori are a very diverse group now, and the only thing they have in common is their race, and that is in very varying degrees of Maori in the mix. If we in NZ cannot successfully integrate our different races then we must make some constitutional adjustments, like another parallel system of government, before we can pretend to be in a position to move forward.

I would be interested to know the views of others as to:
a) whether and how we can integrate our Polynesian minority and move forward, and, if we cannot,
b) what constitutional adjustments would be accepted by those who wish to regain first world standards.

Would it be fair to say that our own homes and work places are microcosms of the larger community? Common goals, leadership, and support, are all necessary ingredients for a creative, productive and healthy environment. Family combined with education (fostering creativity and curiosity) should be our focus – surely they are the backbones of a truly effective society.

I agree that there needs to be an open-forum about the countries direction and I would be interested to see a New Zealand 2020 version of the Australian summit held earlier this year, or at least assess the effectiveness of this initiative. Although the Australian version was directed at the creative industries, perhaps this could be broadened to encompass the various sectors. I also agree with Oliver Kember’s view that the suggested aim of returning to the global GDP per capital top ten is not necessarily the right one and that this aim isn’t inspiring or transformative enough. We are a diverse society and money does not drive all. The aforementioned GPI sounds more aspirational, sustainable and relevant to today’s climate.

New Zealand, it seems, does need and does want some kind of Goal. The big question is what is this capital-G Goal to be? In lieu of many other suggestions, Lloyd’s top 10 GDP proposal seems smart – simple, ambitious, yet not impossible. For New Zealand to have a “national objective”, it needs to be an objective that is readily accessible to many New Zealanders (we obviously can’t all share in an objective, but it should be as broad as possible).

There seem to a be a lot of people on this particular thread who are well-informed, with a lot of experience and lots of ideas. I just thought, as an inexperienced, non-business person, that I should offer a different perspective, for what it’s worth.

One or two things I noted while reading people’s comments:

1) If we’re going to have a Goal, it shouldn’t it be as apolitical as possible? The idea of a national goal should be to unite the majority of New Zealanders, and anything with a political agenda attached to it will be inherently divisive. For example, regardless of their rightness or wrongness, any Goal that incorporates rhetoric about reducing “nanny states” “government red tape” and “political correctness” will alienate (at last count) about 35% of New Zealanders. Rather than any inbuilt political angle, wouldn’t it be better if a goal that was as politically neutral as possible were proposed, which political parties would then (in theory) articulate how they could best achieve?

2) Along the same lines of unity under a national objective, I think the top 10 GDP idea sounds good, if it were promoted so that it was readily understandable. But as other people have noted maybe some kind of consensus about what we value about NZ and what we want to retain should be reached before we begin pursuing such a goal – because its only limitation is it would be possible to achieve it without necessarily making New Zealand a better country.

By way of crude illustration, if we decided that increasing GDP was to be the big push at all costs, then instituting a hyper-competitive schooling system, Singapore-style, would seem logical. Would the benefits (a more hardworking, driven and intelligent workforce) outweigh the possible costs (students leaping from large bridges pre-exams, rampant individualism and mistrust of one’s neighbour)? In other words if we’re going to have a figures-based goal, wouldn’t we need to work out the values we don’t want to lose sight of before making the numbers add up?

There are a couple of issues that could be important in New Zealand’s future that I thought of while reading people’s comments and haven’t seen discussed so far – I don’t pretend to know a great deal about either area so I’ve just got some questions about New Zealand’s energy situation and its geographical situation. These aren’t rhetorical – I’m asking because I am genuinely unsure of the answers.

ENERGY

-Will NZ need more energy in the future? It seems that way given the recent power shortages we’ve had.
-Is it actually beneficial for New Zealand to produce its own energy?
-If so, is there a reason why methods like biomass aren’t being investigated? New Zealand has the advantage of lots of land per capita, much of which is not good for anything beyond growing trees on.
To me it seems that New Zealand would be in a reasonably good position in the world if we were able to produce our own energy in a sustainable and comparatively carbon neutral way. There must be good reasons why people don’t discuss it as a viable option for the future, and if so, what are those reasons?

GEOGRAPHY

Countries like Singapore and Ireland have, to an extent, exploited their geographic location for economic growth. Could New Zealand do the same thing?

1) Ireland apparently attracted some US legal and financial firms because its position enabled work to be done while competitors in the USA were still in bed. Could/has anything been made of New Zealand’s timezone being one of the first in the world to experience the new day?

2) New Zealand isn’t really in a position on a major trade route to establish itself like Singapore has – importing raw goods and refining them for export.
Today, information is becoming like a resource. The internet is like a mine of raw information – but trying to find good information is like trying to find a needle in a stack of pornographic mags and bogus advertising. A question: can information be refined and can this add value to it? Because if there were some way of refining and marketing information, New Zealand’s geographical disadvantage would be irrelevant. All New Zealand would need is more highly developed internet infrastructure.

I don’t know whether or not these ideas are of any value, but the point is that this discussion got me thinking about New Zealand’s future, and about things I hadn’t previously encountered. I think if this discussion were made as public as possible and kept as free as possible from being hijacked by current political issues, it would get a lot more New Zealanders thinking.

Well I had typed out an argument for using population longevity as the best indicator of overall wellbeing of a society – a) simple, b) measureable, c) summarises ALL the operations of a society, d) quite independent of individuals’ beliefs as to what constitutes the components of a good life (which will vary wildly).

Then I got to the bottom of this and thought I’d better just check the TOC. Imagine my disgust when I discovered that doing that wiped my previous typing. Most sites simply take you to another window.

I’d urge the blog owners to fix this.

Peter – if – at taxpayer’s expense – we overinvest in tertiary eduction beyond what the economy can absorb at a reasonable earnings rate, wouldn’t that just accelerate the brain drain?
So, more investment in education (and whatever else we think desirable, like everything “cleaner & greener” or houses warmer, health services better, etc, etc) gives us the best return if in balance with all the other needs, and the productivity and capital reserves of the economy – which leads us to the common basic factor applying to all investment – an adequate savings rate.
Is there anyone who can work it out, what collective savings rate would we need for a 5% annual economic growth rate, with an average investment return rate of say, 3% above the inflation rate per annum?
Having identified this priority target, we can think of how to achieve it in the most acceptable way, and “fine tune” and adjust everything according to changing circumstances and improved insights – e.g. such as amendinge the NZ Super Fund into a permanent institution of Personal Accounts, and investing more of it in New Zealand, including shares, low interest infrastructure bonds, or converting foreign debt into domestic debt to keep the interest earnings here.

1 A single hairy audacious goal is a good idea
2 A financially biased and business focused goal isn’t the thing that will get buy in from the rest of us.

To motivate the whole population to understand the moral and economic decline we are facing requires a visionary person, to unite the two forces of society that are perpetually working in opposite directions would be the miracle we need. Unfortunately I can only recall historical visionaries who eschewed money and things, none outside of economics who valued business as the motivator for societal change

The commentary above seems to highlight this. Paragons of business championing measurable business goals, paragons of cociety championing moral change by the people.

I have to say that my perspective is that if we set moral and community goals then businesses whilst powering the change will benefit at the same rate or higher as society changes; the two are linked but people must come first.

People are our drivers
Businesses are some of the vehicles
Infrastructure is the facilitator of movement

set the people up, give them vehicles and set them free with a viable road map, that’s what will get us up the GDP ranking again

I feel this is a very important topic and that every New Zealander needs to be concerned.
Unfortunately we have major cultural problems that do not endear it to a first world economy. This is to do with our isolation size and history.One argument I am always asked when abroad is who would want to come here to make money.Broadly speaking we are unaware we have severe problems as we have nothing immediate to compare ourselves to.

The biggest issue we have is with our national psyche (as stated above).As a country we have to really really want to be successful.This is the first and major issue.Once this is realised everthing will fall into place easier than implementing quick fix patches.
How do we fix it:
-We must get our mindset right.It must be seen by every New Zealander that it is our patriotic duty to improve our standard of living.We have to collectively want this as much as we want the All Blacks to win.
-In order for this to happen we must live in the real world and accept that unpopular and crucial measures need to be taken.
-A massive diversification of Industry:Look at IT in large scale as in the Irish example ie attract large corporate US companies to set up in NZ.Also look at banking/finance and manufacturing but on a huge scale.
-Drop the corporate tax rate right down to attract these Corporates.
-We must adopt the Australian currency to overcome the problems of volatility.
-Internationalise.Proactively promote and attract ourselves on a huge scale to the outside world that New Zealand is the place to do business and we want you to invest in us.Our biggest error and crime has been to turn away outside investment eg Dubai Aerospace and Canadian Pension fund to buy out Auckland Airport.
-Be open to outside help,ideas,knowlege and help.Hire the best from around the world and pay them accordingly.
-We must grow our consumer population to a critical mass of about 10 to 15 million people.Business does not work in a small invironment.
-Infrastructure.We need the whole lot I’m afraid and in a large scale.Not just roads but rail and public transport.This has to be done quickly and to a proper world standard.

If ANY of the above is not in place there is absolutely no chance in hell of us obtaing a top 10 placing in the OECD charts.This is a fact.

New Zealanders need to ask themselves do they want it and are they prepared to do what it takes to achieve this.

I’m excited by the momentum that this idea seems to be generating.

In the first couple of days after we sent our email out, we had over 5000 views of the documents on the NZX blog. In addition to the feedback on the site, we’ve received hundreds of emails expressing support and offering insightful perspectives on how we can collectively take this forward. The media have started to pick up on the “Measurable Goal” initiative and it’s now been covered in the NBR, NZ Herald, Dominion Post, Newstalk ZB and Radio Live. On Monday night’s TV3 Leaders’ Debate John Campbell used our document, along with the SwanBelly report, to try to generate a discussion between Clark and Key on a long term vision for New Zealand.

This is a terrific first step in what will be a challenging but crucially important process. It’s particularly encouraging given we’ve relied on a viral response to the message, which has been limited in the initial instance to a comparatively small email base.

These are my takeaways from the blog discussion and emails to date:

(1) There is overwhelming support for the idea of New Zealand committing to an ambitious, measurable long term goal;

(2) There is a strong sense that we mustn’t let the pursuit of economic growth lead us to sacrifice the social and environmental attributes that make New Zealand special. I believe that New Zealand has no chance of achieving long term compounding economic growth unless we invest in social development and protect our environment. Likewise, we will have no means to pay for these things in the future if we don’t lift our productive capacity. My personal preference is to maintain a very narrow measureable focus to gain the support of as broad a cross section of the electorate as possible. We need the majority of New Zealanders to use a measurable goal or goals as a mantra by which to they can hold leaders accountable. I am strongly of the view that sustained achievement of a narrow goal, for example, top 10 GDP per capita, will necessitate a broad, holistic and changing series of policies to cater to society’s demands, changing world circumstances and the principles which New Zealanders hold dear. The broader we try to make the actual key measures of performance, the harder it will be to engage large numbers of New Zealanders and the easier it will be for leaders to fudge the accountability for their performance. Clearly though, this is an area where we need to get our thinking and messages very clear to make sure we don’t alienate people or send the country down the wrong path; and

(3) There is widespread recognition that we will need to demonstrate massive commitment to achieve the results we seek. There’s always a danger that short term issues and three year electoral cycles will lead politicians to forget about long term goals. The only way to ensure ongoing commitment from politicians and to radically lift our economic trajectory, will be to make sure that there is widespread public belief in the objectives we set ourselves as a nation. While the message we sent out last week has connected with many New Zealanders, we really need some very clever ideas about how to engage a dramatically higher percentage of the community in this mission.

There’s obviously a great appetite for us to start translating talk about goals into a plan of action. I’m certainly supportive of Mark and David’s call for the next government (whatever its make up) to develop an ambitious, inclusive and clearly-articulated long term economic growth strategy within its first 100 days. Let’s give them a head start by helping to define a measurable goal for that strategy to deliver.

Please keep the debate going on and keep spreading the word to your friends, family and colleagues – the message needs to go far and wide to have any impact. Paul and I will continue to keep a close eye on the discussion and come back later in the week with a new post that outlines some thoughts on improvements to our original proposal based on the feedback we’ve received.

The funny thing is, those who point to Singapore as a model for NZ to emulate conveniently overlook this little gem from, you guessed it, Lee Kuan Yew:

“If Singapore is a nanny state, then I am proud to have fostered one.”

It’s also funny how the extreme left and the extreme right have one thing in common – they both think the words ‘green’ and ‘business’ are mutually exclusive.

My personal take on the wider issue: Prosperity is when one owns a Mercedes-Benz. Quality of life is when the Special Air Service doesn’t have to chauffeur its owner.

The goal of high GDP growth would be a wonderful thing to attain but isn’t it more a goal for a business rather than a country? The authors of the American constitution created a political structure that gave their people freedom to achieve rather than giving their government targets to achieve.

You may argue that the GDP growth target might drive constitutional changes to allow New Zealanders to achieve but I fear that is putting the cart before the horse and the combination will be hard to steer or even keep moving.

For example, conceptually the GDP growth target might be met by converting New Zealand into a real or virtual remote political extension of either the USA or China (or perhaps more realistically, Australia). I see progress hamstrung by major disagreements over fundamental political philosophies. People may agree on the GDP target yet totally disagree on the means to address it.

Many others will dispute the validity of GDP statistics as a measure of national and human welfare and resent being harnessed to a cart in pursuit of that flawed dream.

So where this leads is to the conclusion that the plan of action is much more important than the GDP goal because it will have to make the choices that are acceptable to and understandable by the majority of New Zealanders.

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

Absolutely we need a high level goal, and a range of lower tier goals to engage the varying interests of our population.

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

GDP, for all its faults, is easy to communicate and allows clear comparison to chart performance so, yes, I agree we should set our sights on the top 10. I see our chances of success lying in our (NZ) ability to engage and motivate as many people in NZ as possible. GDP as an end goal is a good choice but in my opinion bite sized goals are also needed to show early benefits in people’s lives…early wins etc.

Do you have better ideas?

For a goal, not yet but what a great initiative. Looking forward to the next step (s).

The report – Economy on the Edge is a good initiative, but it lacks focus in some critical areas. The points we wish to make are related to “creating a more supportive environment for NZ firms” and “winning in the global economy”.

We need to lift NZ’s productivity.

The report does consider the issue of lifting our dismally poor and declining productivity levels.

To raise our productivity levels we need to lift our levels of capital investment and in R&D with a strong focus in those industries that are able to make the greatest contribution to raising productivity – knowledge based industries.

Industries in NZ that have an international competitive advantage through superior intellectual property are dominated by pastoral and the biological sector and the $700 million announced in the 2008 budget for Fast Forward initiatives are about building on our strengths. However this sector cannot alone bring about the large change in productivity needed – we also need to build the physical technology-based industries alongside our commodity industries.

This doesn’t necessarily need new companies.

The very rapid rises in the prosperity of a large number of nations can be traced to a massive deliberate investment in product engineering and associated industrial design. More often than not the key steps have been building technical skills and then applying it to improving existing products, rather than trying to start new industries or as outlined in the report attracting new industries. This leads to real productivity gains in manufacturing, construction and infrastructural services. Once existing industries are sophisticated, new technology businesses can be clipped on – it is much easier to add a $10m product line to an existing company with revenue of $50m/year than to form a start up company, or attract one of overseas.

It does require investment in the right firms and in R & D

Promoting capital investment in productive assets is vital to raising productivity. Investment as a share of GDP was low in the 1990s and is still below many OECD economies. In recent years growth in construction has been stronger – but these are not the right areas to lift productivity. In addition NZ’s investment in research and development, both by industry and government, as a percent of GDP, is in the lower third of OECD countries. To create more investment opportunities, innovative ideas based on sound research and development need to be supported and encouraged with a particular emphasis on existing high value technologies and industries that are able to make the greatest contribution to productivity. The management skills associated with capital expenditure must be boosted, as in Singapore, linking engineering and business capabilities.

It does require market driven R & D

Products need to match market opportunities, and too often NZ’s research investment has been driven by the research industry with insufficient knowledge of the potential of products in the market place. R & D needs to be driven by the market, needs a stable funding regime, and co-funding by firms.
There needs to be a mechanism for personnel transfer from the research institutions to the product developers to assist in ensuring researchers are exposed to private sector commercial imperatives, and at the same time raising the research and technology capability of firms. This would be a win-win arrangement.

This requires a new vehicle – an industrial development agency

This need public sector support and we believe that and industrial development agency is the appropriate mechanism. Its purpose is to grow business capability and R & D spend, not to do research. This doesn’t fit with the CRI or university models. It may not seek return on intellectual capital value created.

Does Organic NZ mean imposing organic certification on all our producers?

I don’t profess to be an expert in economics but am going to apply sound management principles and also just some good old kiwi passion into the thoughts below…

Do you agree that we need an ambitious, measureable shared goal for New Zealand?

Absolutely! Even Nigeria has set itself a goal of being in the top 20 economies in the world and this is from a country where 57% of the population live on less than a dollar a day (I think I have heard that slogan before somewhere!). New Zealand is a country that is perceived as being one of the least corrupt in the world (Transparency International – Oct 08, NZ ranked #1 in the world along with Sweden and Denmanrk) compared to Nigeria which is ranked 121st. If they can start this journey, then so can we.

The goal needs to be ambitious in order to drive people towards achieving this . But it also needs to be attainable, to maintain focus and drive people they need to be able to see progress towards it being made. This is the balancing act and where the research now will pay dividends later. A key part of this is that it also needs to be measureable in order to track that progress. These measures need to be something that people understand, it is great using GDP/capita but make sure that your stakeholders understand what that means for them on a day to day basis. Is it increased money in the pocket, less waiting time at the hospital or no more waiting for an hour to get across the harbour bridge (although that would be bliss compared to Lagos traffic!!). On a corporate level is it lower taxes, favourable export conditions or simply more demand for their products.

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

Definitely. GDP per capita is something that is easy to explain to the different stakeholder groups and is also easy to tailor the message so that it is meaningful to them. As progress is made towards this goal, these groups will become more involved in the process.

Success breeds success, New Zealand is turning into a society where it is ok to be mediocre and that taking part is what it is all about. If we can start to change these attitudes at a societal level then these growth targets will be more easily attained. Make sure that people understand that winning is good and success is something to strive for. Reward those that achieve instead of pulling them down off the pedestal. This is something that can be applied across all aspects of society. Reward and challenge smart kids at school, celebrate success on the sports field, don’t tax companies or people just because they are good at what they do. Encourage them and the rewards will come.

Do you have better ideas?

Not sure if these are ideas but these are thoughts with no coherent theory behind them….

Make sure that New Zealand taps into the skills of Kiwis worldwide. There are groups such as Kea and the like that are trying to bring New Zealanders home. These need to be encouraged as we have a great deal of experience and skill to add to the economy but need the conditions and the incentives to come home. I think many expats want to come home. Do I want to look at the yachts on the Hauraki Gulf or Lagos Creek filled with rubbish and sewage? No brainer. But would I come back to a job that does not stimulate me or where I am giving most of my money to the government for little return. Why exceed when you are penalised for it?

Buy in for this has to come across the political spectrum. There has to be a consistent pathway to reach this goal. The public sector is critical to this as they advise on policy and for there to be consistency, the advice has to be the same, no matter who the boss is. Also having a cabinet of people with real practical experience in business and not just a bunch of academics would help. Make the politicians accountable and keep this idea in the public eye. Don’t let it be a flash in the pan and ensure that the plan and the pathway are visible and relevant to all facets of New Zealand society.

The process of getting acceptance for this plan has to be a bottom up approach. Keep the leaders of our country focussed on this because their jobs depend on it. Get a grassroots movement behind this and it is something that can’t be ignored. People have to see this as something they are a part of and that they can influence, and more importantly, that benefits them. Don’t let this be seen as another idea that is full of complex theories that is for the benefit of big business. If you can get this critical mass behind the idea then the sky is the limit.

I am assuming that social networking sites such as Facebook are being utilised to spread the word and get input from the kiwi diaspora as well as those at home. Use all the channels open to you to get input the broadest possible range of Kiwis.

New Zealand is never going to be a dominant world power. What we are good at is making the most of what we have. This is illustrated perfectly through the IT developments that have been made in NZ and there are many other examples. We need to find the niches that we are good at and that we can dominate. Our greatest asset is our people and the skills that we can offer to science, technology, and industry. Focus the energies of attaining this target where it will make the greatest difference. Play to our strengths… lets feed the backs.

On a marketing slant, play on the nostalgia factor. Remind people of the good old days when we were in the top 10. Make people think back to the reputations of New Zealanders forged on the battlefields of Europe and Africa. Focus on the achievements of past New Zealanders (Ed Hillary, Ernest Rutherford, Richard Pearse, John Walker, Bruce McLaren), there are enough of them to work with. Make people want to be able to feel good about living in the greatest little country on the planet.

We are all proud to be Kiwis, let’s make something to be proud of!

There ends todays sermon.

@aileen. I just needed more background from the Organic enthusiasts to decide if I ignited the flame thrower, hence the question.
I would suggest the best thing would be a Fonterra type structure with a coop funding a marketing and sales force that sold NZ organic goods. As the market grew, with higher prices, so would the number of producers, and we would have a lot of “conversions” to organic.

What it needs is a bunch of farmers with big stones, and an environment that will reward them for their risks.

Jens, I’m not really sure how what you propose would sit with my ideas. I don’t feel I’ve really contributed an idea here; just noted that there’s another dimension to consider when we’re trying to pass this idea on.
As Baruch mentioned we need to translate this whole idea into something that the average kiwi can grasp and strive for.
I’m fairly educated and I can’t get an inkling of the economic constructs you’re all using here.
I have to say again, to get buy in and action from the country as a whole; we have to translate the Big Hairy Audacious Goal into something more concrete. That’s a job for marketing not economists.
If you need a hand in doing this, I’m more than happy to bring my skills to bear in translating the figures into concepts we can all pass on and thus infect the country with an idea virus that can achieve the things we set out to achieve.
Make New Zealand better without throwing out all the things that make it the best little country on the planet.

Adrian

Using GDP and GNP to support figures like these is misleading: As Churchill said, there are lies, damned lies and statistics.

In 1900, the NZ pop was about 800,000. It’s since more than quadrupled.

In 1900, the GB population was 38 million. It’s since grown to about 61m, an increase of less than 50%.

Population up = GDP/GNP down.

It’s all very well to use statistics to project a political or economic viewpoint, but not very clever to twist and manipulate figures to support that viewpoint. I don’t think Lloyd would be happy to see that sort of selectivity in a report from his CFO.

(PS: The Kazakhstan population has actually fallen since 1989. So it’s a smart move on Lloyd’s part to choose that much-maligned country to compare NZ to, especially given the stereotypes associated with it.)

In my experience of marketing organic products within NZ there has been a definite correlation between wealth and demand. We have noticed a shift with this recently and people of more moderate incomes are also looking to purchase organic products. This seems to be directly related to the increased awareness of its benefits along with media and general promotion of the concept ‘organic’.

We used to notice a trend of sales to people with discretionary incomes, ‘green’ but low income, health issues especially cancer, pregnant and/or with young children. This has changed gear a little towards becoming a more essential item of purchase and I guess the increase of home gardens also reflects this.

I do not for a moment believe that ‘Organic NZ’ would in any way increase the wealth of this country unless it is export orientated. We can produce far more than we can consume here in NZ. Any fresh export crop produced presently results in cheap seconds on our local market and this would also happen if we increased our organic export production. Only products such as milk and meat, which don’t have export rejects, could maintain the export market price locally. What we need is an international market of wealthy customers for ‘Organic NZ’ to be successful.

Although increased wealth from ‘Organic NZ’ would come from our organic producers I would suggest that if we decided as a nation to focus on ’sustainability’ also and we presented ourselves internationally in this light we could apply these concepts across the board. With emphasis on greening this country along with both the government and the peoples support, including increased R&D, this nation could become reknown for supplying not only the best organic food but also the best exported ‘green’ scientific, industrial, economical, etc outputs. Tourism of course would also reap the benefits.

I believe we need a goal that increases our wealth but it has to inspire people and it must be able to be applied across the board so that it is inclusive and we each can see the step we could take to help make this happen. This means a goal that can be seen economically for those that need it presented this way but also a goal that touches each and everyone of us, and inspires us. I like your concept of Ownership Society but it needs to be more than this if we are going to inspire this nation.

Passion is the best driving force to get this country moving and in the consequence becoming more wealthy.

As a domestic organic producer and marketer I am aware the local market can be saturated by just a very few extra producers (even just one or two big enterprises would have this effect). We have seen this happen with some of our own product on a small scale even now. The outcome, price reduction ie supply and demand, and the product no longer is cost effective to continue growing. This is why there is so few growers in our local market.

To even consider the idea of ‘Organic NZ’ we must focus internationally to become economically successful. Product needs to be cheap to process and the resulting seconds from crops produced for fresh overseas markets would supply increasing demand for processed organic food eg soups, dips, etc.

I am sure that increased R&D would allow crops to be produced much more cost effectively but when it takes only one grower (conventional) to saturate the Auckland market with melons (yes we did that a few years ago and it wasn’t that much land area) it make one realise just how small our domestic market really is.

And yet I see a bright future for moving this country along this pathway. But definitely it must be the international market that is targeted – Ask anyone involved in the production of food in this country and they will tell you that there would be no other option on a larger scale.

Jens said

I don’t know, I’m not an economist just a humble Advertising artisan who plays sousaphone and runs a Scout troop in the evenings. I do, however, have a desire to see all the people in NZ enjoying the best we can give them. My organic drive is based on a couple of ideas: all divorced from any reality or insight.

1] we were really good in getting high quality food to europe and the UK in the 50’s before the EU subsidised us out of the market
2] to a certain extent we found new markets, new tools and new technology to allow us to continue to be a savvy exporter of food products
3] our isolation is a good natural barrier [not the problem we sometimes think it is]

Why not then begin the organic transformation of the country to provide a hungry world with ‘exotic’ premium food? A country that takes ideas like packaging technology that Te Mania uses to send extremely high value Angus Beef to Japan for other goods? That builds on the ‘Clean and Green’ image we already have?

The abolition of poverty is something we’d all like I’m sure. We’re all pushing our own barrow about what we understand and champion that. I’m guessing your passion is saving?

It’s my contention that success breeds success, and that whatever we do to improve things will bring an improvement to everyone’s living standards

Adrian

Some issues I believe need to be addressed in order for NZ to be able to realise its (vast) potential.

Electoral reform – MMP and 3yr terms are never going to be able to achieve effective policy. 1st year is settling in and pleasing all minor parties and carrying out election bribes and last year is dishing out a new set of election bribes. I hope New Zealanders will scrap MMP and consider a 4 or 5 year term, with the prime minister having to step aside after 2 terms

Tax. Tax rates need to be lower and company/trust/ top tax rates all bought into line with each other, plus a flat capital gains tax 15 or 20% on all investment assets – shares, rented properties (this would exclude the family home and a non income earning bach), and overseas investments. NZ is one of the few OECD countries that doesn’t have capital gains tax. It is a very effective way of taxing those that can afford to pay more tax. Much simpler and fairer than the PIE regime and will put property investment on an even keel with shares

Immigration. Need an annual allocation policy to prevent immigration causing huge lumps in our economy eg. 40,000 net immigrants 4 years ago pushing the housing market through the roof. If we pull New Zealands GDP up we will have a greater pool to choose from and can attract the kind of immigrants that will add to the GDP rather than be a drain on it.

Parenting. Considerable resources need to go into teaching parenting skills, particularly to those who have been bought up in environment of abuse, violence, bad nutrition, drug and alcohol addictions and neglect. The cycle must be broken to reduce the violence and crime in New Zealand. Building more prisons does not reduce the cause of these problems. Parents Inc is doing an amazing job of trying to address these problems in Auckland, at present with no government funding. The crime rate and of dependents would be reduced.

Agriculture and resources. Agriculture still is and always has been the backbone of this country. It contributes 30% directly and indirectly to our GDP. The meat and wool industry needs to sort itself out .This industry and our resource sector need Government support in the form of R&D and friendly policy. ETS estimated to cost farmers at least half a billion dollars. Rural services are way behind the cities

Carbon Emissions. Forget being a world leader. As Rupert Murdoch said last week “The solution is not to punish Australia with standards the rest of the world will never meet”. ETS does just that for New Zealand. Addressing climate change needs to be about tidying up our environment, adding “eco” value, being responsible, giving NZ a competitive environment friendly edge to ultimately boost the bottom line. Start with household participation and work up – provide recycling to rural New Zealanders not just the cities. Scrap plastic shopping bags. People have to buy recyclable bags or bring their own to put shopping in. Incentivise recyclable packaging. Educate people on cutting down waste. Make “clean green New Zealand” achievable by developing responsible environmental policies without harshly punishing industry.

Infrastructure. Infrastructure on most levels has been under invested in for 2 decades. Spend the money where we will get the most benefit both environmentally and cost effectively.

RMA. The RMA has strangled infrastructure spending and added huge cost to any building project. The consultation process is too comprehensive, too expensive and the time taken to process consents too long.

There seems to be an emerging theme that in order to improve our lot in the world New Zealand needs an attitudinal shift. We are not a particularly cohesive society; we are a nation of individuals. We don’t have a single religion, ethnicity or dictatorial government that holds us together. We are not going to convince the country of the importance of a macroeconomic indicator.

No one gets up at five-thirty in the morning motivated by the idea of an incremental increase in the national output relative to other countries. They get up, driven by a dream of a better life for themselves and their kids, and (if you are intending to stick around); for their community. When people talk about having a “vision”; for the future, that means they know what it looks like. They can describe it in concrete, real, human terms.

Scaring New Zealanders doesn’t work either. We think of ourselves as pragmatic realists – not dreamers. We are experts at keeping ourselves worried. Our political campaigns have been described as “dour exercises in damage control.” The symbols we have for the country are an uninspiring collection of oddities (flightless bird, shrub, colonial flag), but we refuse to change them out of inertia and self-consciousness. We are good at finding the most prosaic terms in which to describe ourselves. For instance the immigration debate is consistently framed in terms of how it will effect real estate prices and traffic congestion, rather than the simple fact that hundreds of thousands of people want to come here because of the freedom, security and opportunity they can find in New Zealand. Sometimes this habit of understatement and pessimism is refreshing, but after a while this mode of thinking leads to despair. It slowly eats away at our sense of pride, confidence and optimism. Last year when we didn’t build a waterfront stadium, some people honestly thought our civil engineers wouldn’t be up to the task. A generation ago we built the Manapouri powerstation. Perhaps the most tragic outcome of this focus on fear and negativity is our very high youth suicide rate.

I honestly think we need to learn how to talk about ourselves better. Why are we special, how we do things, and crucially; what our dreams for the future are.

I’m not talking about generic mission statements or branding exercises. What I mean is getting down to human, concrete specifics. We aren’t Switzerland or Ireland. What is the New Zealand way of doing things exactly? What is it about being a New Zealander that makes us special? What are our dreams for ourselves and our kids specifically. I think other posters here are correct in that New Zealanders don’t have an inbred desire for material wealth – we aren’t magically going to instill one. Most of us don’t dream that our kids will drive Mercedes and live in mansions. Most of us dream of a place where their kids will be able to be whatever they want to be. That they will be able to build a grand building, design a piece of software or whatever it is they want to do and then go to the same fishing spot that we did and pull out an abundance of fish. But whatever they are, we should be talking about them more, and getting down to specifics. We need to tell better stories about who we are, and what we want our future to be. And do this in a way that avoids the crippling cynicism, sarcasm, negativity that can paralyze us as a nation.

New Zealand might lack a common purpose, but what it needs is common stories and common dreams.

The American dream might be a myth, but it dreams and myths have an immeasurable power. They shape lives, and the history of nations. The stories you tell about yourself have a funny way of coming true. They have a motivating force to them, even when you’re not living up to them (perhaps especially when your not living up to them). So what is the New Zealand dream?

Greg R – we are closer to ‘Organic NZ’ than you think.

Currently Fonterra exports certified organic milk and pays a premium for this. Farmers are actively encouraged to convert and are paid extra during the 3 yr conversion period. Zespri exports certified organic kiwifruit paying a premium for this as does NZ Apple & Pear Marketing Board for apples. Various other organic products are also exported. OANZ has been set up receiving Government funding and offers through their Smart Start programme a subsidised initial consultation for farmers interested in converting to organic production.

But Fonterra struggles to gain the 200 farmers sought and the conversion rate has slowed for kiwifruit and apples. Unless the farmer is almost fighting for survival, as have been the sheep farmers recently (and there is an increase in sheep farmer conversion at present), conversion rate has been slow in the good times.

Why, when premiums are being paid for organics?

Farmers are busy people. They want to be able to contact the local imput supplier, get the advise and suitable imput asap and get on with producing their product. And when its ready simply make contact with the buyer of their goods.
Try doing this with organics – so much time is wasted with the lack of infrastructure at present. And yet when firms like Ravensdown had certified imputs suitable for organics they found the certifying costs made it uneconomical because of lack of demand. So, like other companies who have also moved too early, they have had their fingers burnt and no longer provide certified organic fertilizers.

Also most people, especially farmers, want to be part of the crowd and even though they may lead they will still farm to the current ‘acceptable’ farming aspiration. This was brought home to me a few years ago when growers were going broke exporting conventional kiwifruit. High prices were being paid for organic kiwifruit but suggesting making the switch to a concerned grower wasn’t even considered an option. Times have now changed and farmers are looking and reading (in their farming magazines) about organics. They are interested but still they don’t take the step.

We need research done, we need improved systems, we need suitably developed and readily available equipment, we need well researched workable advise at the local farm supply centre, imputs a phone call away. In other words we need organics to be easy to grasp and run with. But most importantly if we want this to really shift a gear to get this country moving we need encouragement from the top. We need ‘organic farming’ to become ‘ the economic way forward’ farming aspiration. It needs to be encouraged and embraced as a vision at the highest levels, Organic NZ, so that we can all start working on it in together.

So much is just sitting their waiting to happen and it will slowly over an extended period of time. Watties, Fonterra, Zespri etc have certainly made inroads but with Government leadership, encouragement and investment in R & D, I think we would all be surprised at how quickly this country could be reaping organic premiums.

‘Green’ doesn’t have to be left winged as it has become politically in NZ, and it doesn’t have to be right winged either. The sooner it becomes neutral and helps leads us out of our current financial mess the better. The organic export market is there for the asking. People are prepared to pay premiums. What we need is cost effective methods and supporting imputs developed to reap the rewards.

So, this is great. What’s next? It doesn’t seem that everyone loves GDP per capita. It seems that there is a real need to focus on the human as well. My request is that the goal or the measure, has at its heart something about people. If we do not have great people, and great leadership, we can forget 4.5% GDP growth. We can forget 3%. And we can start thinking about when we need to start burning furniture for fuel we will be so poor. BUT, to me, people will get this done. Real people. Not politicians. That means to me that our goal has to be about people and winning the “war for talent” We have lost this war, and we suck economically – as this document shows. To me the “why” is all about the people. Lets focus on some HR based metrics (net migration?, net skilled migration? percentage of NZers in NZ v. the diaspora (currently about 20% overseas I think). This means we need to have great jobs, great policies, win people back. If we do this right, our GDP will take care of itself.

Concern on GDP per capital is that we could end up shrinking our talent pool to increase the “per capita” bit. This would be very short term thinking

So, what’s next? Is this a real debate? Is this going anywhere? Time to pony up and show you have taken note

But Jane, isn’t that the greatest thing about people, when, instead of moralising and theorising, actually training, goading, and helping them to become more independent citizens of means, to enjoy a greater equality of opportunity, and co-opertive social cohesion and unity, instead of being bogged down in the clash of interests between haves and have nots for a bigger slice of the cake, instead of cooperating on a bigger cake?
As repeatedly pointed out, without any apparent appreciation of its practical value so far, ownership of NZSF Personal Accounts (PAs) reduces the redistributive taxation (welfare) burden through plain, all-inclusive wealth creation, which cannot be more basic and simple than that!
Is that simplicity too embarrassing to acknowledge?
Don Brash opposed such “compulsory saving”, but John Key should perhaps recognise, that this being done on personal accounts is more in line with the “property owning democracy” National once stood for, than having it done on a collective ownership basis.
The Ownership Democracy concept is arguably the socio-economically most fair, effective and unrestrictingly creative basis (even if not productivley as efficient as a potentially slave owning plutoctracy might be) – with more widespread possibilities of innovative creativity than in a narrower, more conservatively elitist wealth ownership scenario.
(And natural spendthrifts are still free to carry on in their hedonistic ways, with their PAs protecting society from their profligacy at least up to a point, which would not happen, if they had no NZSF Personal Accounts.)

Good on you for igniting this debate.

I was underwhelmed, like much of the country, with the lack of vision from the two leaders of the main parties during the election campaign. My hope is that this resulted more from fear of scaring the electorate than from an actual lack of vision! Whatever vision or goals we aim for, it will be critical that most of the country is galvanised behind them. In our small economy, we simply need everyone pulling in the same direction.

I support your initiative in trying to create this vision in a non-partisan way. I’m particularly interested in the role of regional economies to drive New Zealand’s future economic prosperity. Although the dairy and tourism industries are likely to be the cornerstone of the New Zealand economy, these industries are unlikely to be able to sustain the scale required to drive a 4.5% average GDP growth over a sustained period. I was fortunate to see Paul Callaghan speak at a luncheon in April 2008, and he made some interesting observations about the size these industries would need to be to bring NZ’s GDP per capita in line with Australia’s. From memory, our tourism industry would need to be nine times bigger and the dairy industry five times.

So you have my support and participation if I can help.

Aileen: thanks for your input. Great to get this kind of hands on info – and your points are reassuring too.

G

I agree with Prof. Callaghan’s view that our future lies in science and technology. This was one of the reason that Universities of Auckland/Otago (and others) established the Dodd/Walls Centre for Photonics and Ultra Cold Atoms in 2006. One of Prof. Callaghan’s area of speciality is nano-technology and researchers from the Dodd/Wall Photonic Center do cover research in this same domain too. In the symposium for the opening of the Photonic center, invited speakers/research-collaborators were talking about technology, ie is real cutting-edge (as opposed to the IT industry for using the term cutting-edge for purely hyping). Some of the talks/presentations were related to current R&D topics which involved:

- Development of super-fast Photonic chip, which will revolutionalize telecommunication & computing technology. Current electronic chip technology uses semi-conductor which has its problems (ie, speed & power consumption), where as next generation photonic chip uses optical waveguides which eliminates the limitations (not completely) of semi-conductor electronic based chip.

- Development of a new type of fibre optic cables which maintains the transmission bandwidth (ie, high broad band transmission) by Prof. John Harvey’s group and this has been patented by UniServices (Auckland University commercial arm).

- Development of a noiseless laser transmitter, that is useful in computing technology (for reading & writing of data from/to disc – less error) and telecommunications. Current telecommunication laser transmitters (in optical communication system) suffer intrinsic noise that is produced by the device itself (ie, the noise is unavoidable). This intrinsic noise deteriorates the main signal and carrier as it propagates down the fibre cable transmission lines (long haul) therefore limiting the broadband capability. The noiseless laser transmitter will squeezed out the noise from the main signal & carrier therefore leading to super-fast broadband.

- Development of a (super/hyper) high-frequency laser (terra-hertz domain) that can even detect object such as raisins inside a muffin. Useful for medical applications (early stage cancer detection) and airport security screening. Current screening technology cannot pick up raisins inside of muffins, since the type of radiation used just passes thru the raisins (and similar small objects of that type) without being reflected so that it is captured/dtected, but this new terra-hertz laser from Auckland can change all that.

There were many ideas (currently being researched or ready to be commercialize) presented at the symposium and this is the vision that Prof. Callaghan and other leading voices from our academic circles are advocating for and that is Science & Technology will drive us forward.

Great stuff Wolf. Maybe it’s directly related to a small population but nothing we can’t fix given the tools and desire to excel. What steps do you suggest need to be taken to achieve the results that you envisaged? Would really appreciate more indepth info on these issues that you can see need improvement.
And hang in there mate, this country is going to go ahead rapidly. Constructive advice most welcome.

Hi there, interesting discussion. To play devil’s advocate, a few points..
1) There is no discussion of the idea that, under some circumstances, increased GDP can decrease quality of life.

2) There is no discussion of the idea that, while economic development (defined as “better stuff”) can theoretically go on forever, economic growth (defined as “more stuff”) cannot. Resources are finite. Raw materials are finite, Oil is finite, phosphorous is finite, arable land is finite, coal is finite, aluminium is finite, uranium is finite, fresh water supplies are finite, fishing grounds are finite. This is simply not debatable, especially with regards to things like uranium, phosphorous, nitrogen, aluminium, iron, cobalt, copper, etc.. these elements are forged in supernovas, not factories, and if we have one of those nearby, we have other problems on our hands! Additionally, by the nature of economics, easy-to-extract resources get extracted first (for example, light sweet crude in easily drillable oilfields), and hard-to-extract resources get extracted last (for example, shale oil), therefore, the extraction costs of resources generally increase. Technology can help, but not stop, this trend.

3) There is no discussion of the idea of a steady-state economy as opposed to a growth economy. As Prof. Herman Daly puts it: “Anyone who thinks that exponential growth can go on forever in a finite system is either a madman or an economist”.

This quote sums up why GDP is not an appropriate measure for development, or anything else:

“..the quantitative expansion of the economic subsystem increases environmental and social costs faster than production benefits, making us poorer not richer, at least in high consumption countries. Given the laws of diminishing marginal utility and increasing marginal costs this should not have been unexpected. And even new technology sometimes makes it worse. For example, tetraethyl lead provided the benefit of reducing engine knock, but at the cost spreading a toxic heavy metal into the biosphere; chlorofluorocarbons gave us the benefit of a nontoxic propellant and refrigerant, but at the cost of creating a hole in the ozone layer and a resulting increase in ultraviolet radiation. It is hard to know for sure that growth now increases costs faster than benefits since we do not bother to separate costs from benefits in our national accounts. Instead we lump them together as “activity” in the calculation of GDP.”
http://www.theoildrum.com/node/3941

The key is that GDP does not separate benefits from economic growth from costs, so the assumption that further economic growth will increase quality of life is just that, an assumption.

Therefore, since GDP does not separate benefits from costs, we could already be at the point where further economic growth adds more costs than benefits. How would you know, from GDP figures?

There is evidence that this is already happening, especially in high-consumption economies. The USA has experienced consistently high economic growth, yet by most measures of happiness, the happiness of the population is not increasing and has not been increasing for some time. Is increased GDP actually correlated with quality of life? It seems it is, but only when you define quality of life by… er… increased GDP. I think we can see the circularity of this argument. So,
I am with some posters here who point to increased R&D as a way forward, as this works well with the “better stuff, not more stuff” idea. However, it seems that you are all stuck in the growth-economy model, in spite of considerable evidence that it is
1) unsustainable
2) actually decreasing quality of life, past a certain point
3) using economic measures that lump costs and benefits together in some nebulous bag known as “economic activity”
Even those who discuss other measures of growth, like the GPI and HDI, are not ever, ever, saying that there is a point where more economic growth is, er, uneconomic. Possibly I have missed those who did, in which case I apologise.

Additionally, I would like to point out some problems with the countries that have high GDP and why we can never, or should never, follow them.

1)Quatar. Quatar has high GDP because it’s sitting on lots of oil, but mostly because a huge chunk of economic activity is carried out by slaves, oops, “guest workers”, who are on sickeningly low rates and horrifying contracts, and contribute to GDP but do not count as “citizens”, and therefore skew GDP per capita. Similar situation in Bahrain, Kuwait and the UAE.

2) Luxembourg and Switzerland. Tiny countries that, while rich, are perhaps so small that they skew the statistics, and are also ethnically homogenous, boring and conservative.
3) USA and Ireland. One wonders how they are doing now. The USA in particular has increased GDP through consumer spending on the back of a debt bubble (on the back of increased house valuations), that has now burst. The USA has also been at war, which increased GDP.
4) Singapore and Norway. Norway is a high-tax country that is basically a socialist democracy. I actually think we should follow this model. Singapore has increased GDP on the back of massive government investment in R&D. Again, a good idea.
5) Kazakhstan. Population is decreasing, leading to increased GDP per capita.
So here’s my somewhat facetious prescription for increased GDP, some parts borrowed from FHM.

1) Get the All Blacks to throw the Bledisloe Cup by at least 40 points. The following morning, invade Australia (War=increased GDP) and turn all Australians into “guest workers (=increased GDP) who strip-mine the country on our behalf (=increased GDP), until they get the upper hand and in a case of inevitable blowback, wipe out half the population of NZ (=increased GDP per capita). Sweet!

Yes, some of my points are half-joking, but I hope I have stimulated some new discussions. Flame away.

Wolf an Industry Service Centre sounds like a step in the right direction for small businesses. Maybe now is a good time to consider establishing a pilot scheme, along with other enthusiastic skilled people and businesses, to test the market?

My point re small population was in reference to ‘closed mindedness’ only as even in NZ my experience has been that the larger the city’s population, and thus the more diverse the people, the more opportunities and necessities to develop flexibile thinking happen.

First steps first. Until we have the goal we can’t start deaming it and thus creating the pathway to achieve it.

My goal in the industry I am in is to go for ‘Organic NZ’, I know how we could get there and I’m in process of taking my own steps. Maybe if we all put forward our own goal in the fields we are focusing on, asked ourselves what steps we could personally take to achieve this, we may discover there is a common thread running through various ideas that might serve as a basis for a collective measurable goal/goals for this country that may have wide support.

Definitely goals on there own are more than worthless. Better to be in an uncertain state than to dream a goal and kid ourselves we need take no further action; we all need to get in boots and all and take some steps ourselves, not expect someone else to create it for us.

So how about some personal goals for this country, even some steps if you’ve got that far, and lets see what happens. This could be fun and if you take up the challenge it personalizes the process so it really means something to each of us.

(Wolf try Auckland – the population is larger!)

A Measurable Goal for New Zealand – How will you make a difference to the future?…

I received an email last night Subject: A Measurable Goal for New Zealand.
To be honest, at first I thought it was Spam! I qucikly glanced at it on my Blackberry and saw it was from ‘admin@…’ – a very common sender of the Spam I recei…

[WORDPRESS HASHCASH] The comment’s server IP (67.205.4.179) doesn’t match the comment’s URL host IP () and so is spam.

Please explain why, in today’s opinion column in the NZ herald, you pay almost no attention to the litany of comments (which you solicited) pointing out that GDP is a useless measure of what is “good”, and in fact does not really measure anything that most people in NZ care about?

“Most New Zealanders are deeply committed to values that cannot be fully measured by as blunt a tool as GDP per capita, but I’m confident that our collective social and environmental conscience would set the parameters and define the desired outcomes of sustainable economic growth.”

On what, precisely, is your confidence based? The fact that New Zealanders think that they are clean and green, in the face of all available evidence? On the fact that we have one of the worst per-capita environmental footprints in the world? May I suggest that your confidence is misplaced. May I further suggest that, as you admit, GDP is a blunt tool, and the answer is not to keep using that blunt tool, but to replace it with another tool. Of which the people on this (solicited by you) forum have pointed out numerous examples. What’s the point of soliciting all these comments if you ignore the main point that has been raised?
Are you captaining the ship, or is the course already plotted and you’re just a passenger?

I have followed and enjoyed this discussion since its launch, and have been somewhat disappointed to find that six weeks into 2009 have transpired without further comment. Accordingly I felt it might be useful to throw some different ideas into the cocktail shaker.

I do note that more than one participant has mentioned the concept of complementing the measurable goal with tangible processes and initiatives to get there. Since we are considering GDP per capita as a measurable benchmark for where we stand in the global league table of wellbeing, it stands to reason that success on a measurable basis is meaningless if it is not simultaneously matched by both tangible and intangible hallmarks of an improved standard of living.

Amongst such hallmarks, for example, are the quality and efficacy of our infrastructure relative to those of the countries we would wish to be compared with. Projects to improve that infrastructure have the ability to both boost measurable economic outputs and yet, at the same time, make us feel better about our worth in less tangible ways.

For those who wish to think on it, throughout New Zealand today, people live with (and most certainly take for granted) many features of the landscape that were created almost 80 years ago during the Great Depression.

So the question might be asked, if we were to embark on new infrastructure projects at this juncture, what might stand the test of time and remain part of people’s daily lives in another 80 years? Our Government has already earmarked a range of worthwhile projects to provide an initial “shot in the arm” to the economy. This is not, however, the point of this message.

Starting from a perspective of looking at infrastructure problems (or at least inadequacies) today, what might be suggestions for bigger picture consideration? These are not “quick fix” type solutions, of course. They are about the fact that there is a long-term that needs to be considered and that short-term compromise “patches” for these problems are sometimes false economies. The long-term also starts today; it is not a convenient excuse for deferment.

Accordingly I suggest the following as candidates for debate, in no special order of priority:

1. Define long term energy resource strategy (including location issues) as the basis for comprehensively redesigning the National Grid. Address questions such as the long term role of hydro generation, the place for wind (we are an island nation in the middle of the roaring forties – we should have some kind of advantage over most countries), the place for gas or coal or other carbon-based thermal fuels in the future

2. Target world leadership in the exploitation of new energy technologies, including: tide/waves; biofuels; buy side energy efficiency technologies; clean burning of coal/biomass. With a leadership role New Zealand would become a magnet for venture capital and development investment, with the added prospect of providing building breadth and depth in this sector of the NZ capital markets. (In an ideal future world companies want to list in NZ as the best place to price such assets, rather than the likes of NASDAQ or AIM! Is that too far-fetched?).

3. Define and plan for the infrastructure requirements in the event of future energy discoveries or developments in regions such as Southland or the West Coast, for example. If oil or gas were discovered somewhere completely separated from the existing Taranaki/North Island infrastructure, how would we deal with it or with the flow on industries that not only feed off it but also ensure that development is viable?

4. Roads: Establish a national strategy for SH1 to become a minimum 4 lane expressway from Bay of Islands/Whangarei to Wellington, Picton to Invercargill, plus key regional highway routes (e.g. Bay of Plenty loop). The potential benefits (other than jobs) are greater fuel efficiency for road users, reduced travel times for freight and commerce and increased safety with the risk of driver frustration and head on accidents reduced.

5. Establish long-term plans for future port sector development, including the most suitable locations for handling new generation deep draught container ships, and the most effective feeder systems – whether sea-based or land-based. This would not necessarily affect the place for inter-port competition for cargoes, but rather how they are serviced at the national level.

6. Start the process of separating urban freight and passenger rail facilities, including tracks. In the 21st century rail corridors (or tracks) for one are unlikely to be the most suitable solution for the other as more specialised facilities provide efficiency benefits and competing access timing otherwise becomes a nightmare as frequency of trains increases.

7. Establish an underground rail network plan for Auckland (and comprehensive public transport integration). Auckland (population 2 million by 2040 – which is larger than many overseas cities were when they introduced underground) is a sprawling city and the combination of speed and accessibility of underground rail is the only comprehensive solution to sprawl and the reliance on automobiles. Underground is what defines fast public transport (“rapid transit”) in many overseas cities. It is new and different in a New Zealand context and, aside from its environmental credentials, it stands a better chance of genuinely changing attitudes and behaviour toward public transport.

8. Establish long-term broadband network planning with a view to leading the world (as a source of both standard of living and competitive leadership), rather than playing catch up. Such a goal would enable to New Zealand to (again?) become an early adopter/ high tech test lab for the world, and provide the basis for establishing genuinely competitive high tech manufacturing and services sectors.

It should be taken as a given that none of these projects could not be undertaken without both private and public capital being involved. Perhaps it is therefore timely to rethink how the public private partnership model works. It is unfortunately easy to conclude that the current legislative model is little more than a form of glorified contracting out of services to private capital, based presumably on the assumption that the private sector is solely motivated by greed and therefore needs to be constantly checked and watched over, rather than a true “partnership”. If so, does it actually harness the advantages of the private sector efficiently, or has the model structure created additional burdens and costs that effectively undermine the purpose and value of the partnership concept?

At another level, large scale private sector involvement could serve to improve the breadth and depth of larger listed securities traded through NZX.

Of course it is also important to distinguish these projects from the “Think Big” projects of the late 70s and early 80s. This is not to say that those projects were wrong, and indeed some have proven to be valuable economic contributors over the subsequent decades, but rather to simply note that the new projects of today should be based on wider assumptions about the needs of the country far into the future, rather than a reaction to short-term events or to specific key assumptions regarding energy prices, for example.

If we have bitten the bullet and committed to such projects, would we have a better society and a higher quality of life in, say, 20 to 30 years time?