Where we’re going wrong
The Kiwi dream is slipping further away from reality for many. Home ownership rates are the lowest in a generation. New Zealand incomes, already below the OECD average, are now going backwards due to rampant inflation. Income inequality and intergenerational mobility are stagnating, while educational inequality continues to rise.
The result is that for many Kiwis, their best option is to leave New Zealand to realise their dreams overseas.
So how does our nation rediscover the Kiwi dream?
First, we need to create equal opportunity in education. Education has always been the great enabler of opportunity. But New Zealand has one of the most unequal education systems in the developed world, with birthplace and parental background more of a determinant of one’s success in life than almost anywhere else, except Israel.
We need to invest far more in quality teaching. Raising the pay of teachers and the quality of teacher training would do more for the educational success of our children than any other policy idea.
We must unlock opportunity for all, especially for those most disadvantaged in our society. Scrapping the school zoning system would enable greater and more equitable access to the best schools for children, no matter where they grew up.
Re-establishing and expanding charter schools would provide options for those most disengaged from the education system. It would spur greater innovation in it, too. Innovation encourages better approaches to educating our most under-served children, many of whom fail to show up to school regularly or drop out altogether.
Second, we need to create economic opportunity in our country. Having lived in some of the world’s most vibrant economic centres – Paris, Boston, San Francisco, and Kuala Lumpur – I believe New Zealand lacks the presence of a significant number of multinational enterprises found in other comparable economies.
Foreign direct investment (FDI) measures the extent of foreign involvement in our economy. We have one of the lowest stocks of inward FDI compared to our international peers. Nearly half of all inward FDI comes from a single country, Australia, and a large amount of it goes to a small concentration of New Zealand’s economic sectors.
Why is this important? FDI provides greater opportunities for our highly skilled talent to stay in New Zealand. It also spurs local competition (think Costco entering the grocery market locally) and provides the skills, know-how and finance that our own local businesses require to succeed globally.
We need to encourage more multinational companies to have regional headquarters in
New Zealand to match their presence in more prosperous economies like the Netherlands, Singapore, Estonia and Finland.
We also need to back those that start and grow companies here. There are too many entrepreneurial Kiwis leaving New Zealand to set up ventures in countries with easier access to finance, skilled labour, and a culture that values and supports risk-taking.
Yes, there are many recent examples of Kiwi business success. However, we need thousands more business success stories if we want to see a significant lift in incomes and opportunities nationwide.
Finally, we need to expand access to home ownership. My local barber, an immigrant from Jordan, is looking to leave New Zealand as it’s impossible for him to buy his own home. His experience echoes the sentiment of a whole generation of Kiwis who now see home ownership, and the security it provides, as unattainable in our nation.
To help renters achieve home ownership, schemes like rent-to-buy offer the chance to accumulate enough for a house deposit over several years, followed by a first right of refusal to purchase the property.
The New Zealand Housing Foundation and Queenstown Lakes Community Housing Trust offer similar schemes but need the backing of government policy to scale up further.
Australia, Chile and the UK have successful rent-to-buy schemes that we could easily adopt here in New Zealand.
Freeing up more land for housing would expand access to home ownership, especially in larger cities. We need to scrap arbitrary urban-rural boundary limits in major cities, which inflate residential land prices.
We can and should be more ambitious for New Zealand’s future. We can be the most prosperous little country on Earth. Yet ambition alone is not enough. We need to eliminate the barriers to achieving success as a nation. As the late Sir Peter Blake said, ‘‘it is easy to espouse worthy goals, but the hard part is turning them into reality’’.
Dan Bidois is managing director of Bidois Strategy Group and a former National Party MP.