- New Zealand Model -

NZ is at risk of becoming just another Pacific Island state under policies of current government (Brash D - NZ opposition leader, 'Kiwis standing on the edge of a slippery slope', FR, 18/8/04)

There has been major change in political landscape in NZ towards favour for National Party whose leader spoke against special privileges for Maoris under Treaty of Waitangi. This is despite government's good economic policies, low unemployment, falling crime rate and budget surplus. Apologies have been offered to numerous minorities for past treatment. Orientation to entitlements has led to many ridiculous payments (Moore M 'Passion and contradiction grip Kiwis', FR, 6/4/04)

NZ Opposition leader has labled drift towards racial separation (between Maoris and others) as the biggest threat to NZ (Harvey C 'Warning on NZ's drift to separatism', A, 28/1/04)

New Conservative leader in NZ expresses concern about NZ's inability to keep up with Australia. Best and smartest people are leaving. Need to lift living standards. Australia can afford better healthcare, schooling, roads. He was long involved in running NZ's reserve bank. He is interested in welfare reform - but this is a dangerous path (Harvey C., 'Hard man at the helm', A, 29/10/03)

There is concern by business in NZ that country's failure to keep up with economic growth in Australia could see future which is much different to today. Clark government is very popular - but this is seen as due to fortunate circumstances that have nothing to do with government policy (Callick R 'A Brash tilt at the top job', FR, 28/10/03)

Subsidies being given to NZ infrastructure companies can not be continued indefinitely - and are contrary to rules prohibiting protection of national champions that were adopted in EU. Increased control of the electricity industry was aimed at offsetting the lack of investment - but will further reduce the likelihood of investment (Durie J 'Cullen creating a pigs' trough', FR, 11/6/03)

NZ used to be seen as model for economic reform, but its growth performance has been below Australia's. There is now a lot of debate about the PM's Growing an Innovative NZ framework. Sound macro-economic and competition policies are seen to be not sufficient. NZ has less policy depth than Australia - and is now seeking its own brand of innovation and industry development policies. Central to the PM's innovation statement was a Venture Investment Fund to improve the chance of commercialization of ideas coming out of universities and public research institutions. A Growth and Innovation Advisory Board has been established, and a Knowledge Wave conference held. Public private taskforces are also working on ICT and biotechnology. NZ is an innovative nation - and has good researchers. And as a small nation it can make institutional innovations easily. But it has many local SMEs that find it hard to go global - and few technology based multinationals. NZ faces the same issues as confront Australian states. The Chief Executive of the Business Round Table is skeptical about the plan (Charles D., (Allen Consulting Group) 'High hopes pinned to NZ's growth plan', FR, 15/1/03).

Helen Clark remains popular despite concerns about 'closing the gaps policy' which is seen as promoting racial preference and resentment. Also teachers are the lowest paid in developed world. Health funding is inadequate. Re-nationalization and re-regulation / higher taxes have affected business - with forecasts of declining growth rates. Clark's government has been lucky in growing season, and high dairy prices due to international trade negotiations. But these cyclical improvements are likely to reverse. Until the mid 1980s NZ was one of the most heavily over-regulated in the world - and then became more flexible even with policy reversals of past 3 years (Brash D. 'Helen Clark thrives on luck and her predecessors reforms', A, 13/6/02)

The major new direction that the ALP is considering is towards the Blairite 'third way' - which puts a communitarian gloss on Thatcherite policies of privatization and tax cuts. New Zealand aims to move away from free market extremism towards the economic mainstream. What is still required is fundamental transformation to an economic and social structure based in concepts of human and social capital. NZ encompasses the strength of the third way - including a flexible attitude to the role of government - without defeatism about the possibility of income redistribution (Quiggin J. 'NZ Labor shows a way', Financial Review, 22/11/01)

"Helen Clark  ... has established a new political status quo where economics must share the stage with environmental and social priorities .... The historic question ... is whether her role is to make New Zealanders feel comfortable about their steady economic decline or whether she can deliver on her improbable vision (to make) New Zealand the Finland of the South Pacific. ... Yet new Zealand today raises loud alarm bells for Australia. This is a country that has embraced and implemented much of the anti-market correction of the 1990s that is now the gospel in Australia of (various political groups) ... The results are on display: a rapid fall in living standards compared with Australia; emigration of the best and brightest; and the prospect that ... a clean and fair policy subsuming economic performance is the road to national decline. (Clark's are those of a social democratic modernist - the Third Way'). ... Clark says government today is about facilitation, coordination, brokerage and partnership. Clark says the first phase of her prime ministership are over- correcting NZ's excessive economic libertarianism (raising top income tax rates; re-regulating industrial relations; and ending pro-market deregulation policies) .. her second phase has begun - creating a stronger economy based on skill, innovation and education.   New Zealand's problem has been consistent economic performance because if you're so reliant on the commodity trade as we are you're a price taker. The essence of the economic transformation is to move into the price-maker category by having branded niche-value goods.  ... (Harvard Professor Michael Porter was critical of New Zealand's position at a recent international Knowledge Wave conference"  (Kelly P. 'Clark seeds ideas in Pacific's social lab', Australian, 8/8/01)

"New Zealand is not in the economic crisis but a condition more crippling - a relentless pervasive economic decline that offers a lesson for any nation that misreads the new global challenge" (Kelly P. 'Merrily down the plughole', Australian, 4-5//801)