Reasons to be cheerful in this winter of discontent

Paul Henry in an interview with Paula Bennett asks “what have we got be proud of in this country now?”. The leader of the opposition feels we have lost our mojo, and there are stories of business owners relocating to Australia.

Yet, it was not all that long ago that we excelled ourselves in how well New Zealand did in dealing with the pandemic. Nevertheless, in the context of a polarising election campaign, the mood has darkened since that period of sunny optimism, a mood accompanied by an unexpected and unprecedented undercurrent of disinformation, conspiracy theory, and alienation in the fluid and uncertain circumstances of a global crisis. This is the winter of our discontent.

So, what can we be proud of? What are the positives and, in the interests of balance, the negatives that can be extracted over claim and counter-claim in the heat of an election campaign?

Our level of well-being is world class. For example, according to the Prosperity Index compiled by the London-based Legatum Institute, a conservative think tank, we are the tenth most prosperous country in the world; a UN agency ranks us as tenth in the World Happiness index.

We also do reasonably well in the related areas of educational and health systems performance, although we could do better. According to the OECD’s PISA ratings, out of  40 countries we are tenth  on reading, seventh for science, although quite a bit lower for mathematics (and our socio-economic differences are large). Australia has a national information system and are able to track trends closely – their scores are sliding too. The United States tracks performance, and one report claims they have lost all the advances made since 1980, mainly because of Covid. So, we have company in our educational concerns.

As for health, we are short of useful comparative data, but the OECD figures on numbers per capita of doctors and nurses – a highly contested area – show that we are above the OECD average, above Canada but some way below Australia.

Another area where we rank well globally is governance. There are a number of measures: Liberal Democracy is central to our political system and we are ranked sixth in the world; The Economist’s Democracy Index has us as second only to Norway; on the Cato Institute’s Human Freedom Index we are also second. We also do very well on our perceived lack of corruption, being second equal in the world. But on the OECD’s Trust in Government scale we are only middle of the pack.

This all seems very positive. But perhaps we have not tackled the hard areas, like the economy. The record here is mixed.

We do some things well. On the ease of doing business we rank first in the world, and according to the Heritage Foundation we are fifth on their Economic Freedom Index. We also have low public debt and a world class sovereign wealth fund (NZ Superannuation Fund), and our employment characteristics are impressive: our unemployment rate is among the lowest in the world and the proportion of the relevant age group in the workforce is world leading. By contrast, the number of young people not in work, education or training is only middling internationally. We could do better.

We are also well rated on aspects of our tax system; for example, we have the third most tax competitive system.

But then we get to the negatives. We have about the worst current account balance in the OECD right now. We have also dropped down the international rankings for export intensity, our R&D investment is low, as is our productivity and innovation generally, and our savings rate is low too. These are features we cannot be proud of, and they also keep us relatively poor and diminish our social and physical infrastructure.

There are other features of public policy that mark us down: we have a high level of reported violence against women; we have one of the highest levels of obesity in the world; our child poverty rate is still not something of which we can be proud; we have one of the highest levels of imprisonment in the developed world, second only to the United States (US) among European and Anglophone countries; our house prices are extraordinarily high; and our environmental credentials are questionable.

In summary, New Zealand has all the trappings of a European-style welfare state, albeit with a lower than average tax rate. This, together with our solid system of governance, saw us through the once-in-a-century stress test of the pandemic with flying colours.

But after that success we now face the shortcomings of a country that has, until the founding of the Productivity, Infrastructure and Climate Change commissions, largely ditched its planning and horizon-scanning institutions, and that continues to depend on a commodity-based economy that is excessively reliant on extracting value from its diminishing store of natural capital and that specialises in low-value, high-volume trades in timber, dairying, meat, fish, horticulture, mass tourism, and large-scale immigration.

Once the hurly-burly of electoral politics is over, we need to return to these bigger, long-term issues. The future of our plucky little country depends on it.

Tip O’Neill, a former Speaker of the US House of Representatives, once said that “all politics is local”. By the looks of the furore over potholes and ramraids, that seems apt. But let us not forget the role that informed, evidence-based debate of a broader kind can and should play in our deliberations on our country’s performance, both positive and negative.

Peter Davis is The Helen Clark Foundation Chair and Emeritus Professor in Population Health and Social Science at the University of Auckland

This post was initially published on Newsroom, as well as on Peter’s personal blog.