Deborah Hill Cone is one of my favourite journalists.
Her cosmopolitan reading habits are unique in the New Zealand media, and she’s generally no slouch in business and economic commentary either.
But she must have got out on the wrong side of the bed the day she wrote ‘Dream of success keeps slipping away’ (New Zealand Herald, October 22, 2010).
She wrote that New Zealand is losing its place in the international league tables and that nothing we have done has made a jot of difference.
A reading of yesterday’s 2025 Taskforce report will cheer her up. It confirms – see the graph on p4 – that New Zealand kept pace with the average per capita growth rate of the OECD as a whole following the earlier economic reforms, only falling away in the last years of the 1999-2008 Labour government. In other words, the long-term decline relative to the OECD was arrested (although Australia did a bit better). OECD projections suggest that New Zealand will outperform the OECD average to 2025.
Other data confirm that productivity and many other economic indicators improved markedly in the 1990s.
Deborah may have been seduced by Phillip McCann’s defeatist thesis that ‘economic geography’ is to blame and there is little we can do about our fortunes.
Again a reading of the Taskforce report should make her feel better. It has a whole chapter (Chapter 4) on this thesis and finds it unconvincing. Better institutions and policies can offset any geographical disadvantages.
The article goes on to criticise Roderick Deane at the Dunes Symposium and the “song the Business Roundtable always sings” about economic reform.
But where have we gone wrong? We said the economic reforms would boost productivity and economic growth, and they did. We said backing off them would damage both, and it did. And since the ‘song’ is standard, mainstream economics, why would you change it? Economics is not like fashions and changing hemlines.
Deborah gave a great talk at the Dunes Symposium on public policy and the media, and lamented the MSM’s general inability to explore serious issues. She is an exception, and I trust she’ll get over this dose of the glums and be back in top fighting form.
She is certainly right to say that the country is underperforming (although few economists would share her view that we are heading towards a double dip recession) and that business as usual is not an option if we are serious about raising our game.