The myth of our nation’s growing economy
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?