The myth of our na­tion’s grow­ing econ­omy

The Tribune (NZ) - - CONVERSATIONS - IAIN LEES-GAL­LOWAY

I’m not a big fan of tread­mills. If I’m run­ning I want to get some­where or at least en­joy the jour­ney.

All that ef­fort, sweat and pain just to stand still doesn’t hold much ap­peal. Our econ­omy is on a tread­mill right now.

We seem to be work­ing harder and harder, there’s a lot more sweat and a lot more pain, but we still feel like we’re go­ing ab­so­lutely nowhere.

Last week the Govern­ment proudly an­nounced that New Zealand’s an­nual GDP growth had hit 3.6 per cent. That, they told us, put New Zealand amongst the fastest grow­ing na­tions in the OECD.

That all sounds like good news. A grow­ing econ­omy should lead to more jobs, higher wages and bet­ter liv­ing stan­dards. But it isn’t and there’s a very sim­ple rea­son why: all our eco­nomic growth has been driven by a grow­ing pop­u­la­tion.

GDP growth per per­son, the share of the grow­ing econ­omy that we each get to en­joy is, just 0.7 per cent.

New Zealand is amongst the poor­est per­form­ing coun­ties in the OECD by that mea­sure which, by the way, even Fi­nance Min­is­ter Bill English ac­cepts is the mea­sure that re­ally counts.

We are well be­hind Ja­pan, Canada, the US and UK and even Ger­many de­spite the mas­sive in­flux of refugees it has ex­pe­ri­enced.

Com­bine that slug­gish growth per per­son with out-of-con­trol hous­ing costs and we find that New Zealan­ders in fact have less dis­pos­able in­come than we did ear­lier this year.

A grow­ing econ­omy is a means to an end. The point of pur­su­ing eco­nomic growth is to make peo­ple bet­ter off. The Govern­ment seems to have for­got­ten that.

It talks a lot about growth but for­gets that what we should be talk­ing about is re­duc­ing the num­ber of peo­ple who are un­em­ployed, in­creas­ing peo­ple’s in­comes, mak­ing hous­ing more af­ford­able, giv­ing peo­ple ac­cess to ed­u­ca­tion and keep­ing peo­ple in good health.

We also have to be mindful of just who is ben­e­fit­ing from what growth there is. It’s not good enough for all the ben­e­fits to go to a few peo­ple at the top.

The Govern­ment promised a brighter fu­ture. They said we were on the cusp of some­thing spe­cial.

Eight years on, the fu­ture hasn’t ar­rived and the cusp feels more like an in­sur­mount­able hur­dle.

We need a Govern­ment that can re­ally grow the econ­omy and that will de­liver the ben­e­fits of that growth to ev­ery­one.

Tread­mills mean an aw­ful lot of run­ning with­out ever get­ting any­where - is this what the lat­est eco­nomic growth fig­ures are all about?

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