For a variety of reasons, I’ve been looking at the relative economic performance of Australia and New Zealand over the postwar period. For most of the 20th century, income per person in New Zealand grew in parallel with Australia. According to the Penn World Tables, income per person in New Zealand was within 10 per cent of the Australian level for most of the period from 1950 to 1970. Since the 1970s, NZ has declined greatly relative to Australia. On the latest Penn World Table figures, income per person is about 70 per cent of the Australian level. Over most of this period, NZ has been governed by radical advocates of the free market. As part of my research, I’m collecting some of their claims about NZ economic performance, relative to Australia and the OECD. I’ve listed some over the fold (links a bit scrappy, as some predate the rise of the interwebs). Further contributions welcome, as would any interesting examples of more accurate assessments (I have some already).
After decades of policy errors and investment blunders, New Zealand appears to have finally diagnosed its predicament appropriately and is on a trajectory to maintain its economy as a consistent high performer among the OECD’ (Evans et al., 1996, p. 1895).
By managing its economy more effectively than [Australia has] since 1988, by undertaking courageous steps towards reform and opening up its economy to the world, and by dealing roughly, though at some considerable cost, with the cosy institutions of the past, it shows every sign of being on the brink of overtaking Australia perhaps before the centenary of Federation in terms of living standards and economic performance. PP McGuinness (quoted in Rankin 1995)
Those who argued for the reforms have been proved right and their critics have been proved wrong. (R Kerr, ‘No time to stop and smell the roses’, New Zealand Herald, 21/05/2005)
A decade [after 1984], New Zealand had one of the most competitive economies in the developed world. The government’s share of GDP had fallen to 27 percent, unemployment was a healthy 3 percent, and the top tax rate was 30 percent. The government went from 23 years of deficits to 17 years of surpluses and repaid most of the nation’s debt.Maurice McTigue, former Cabinet minister, writing in Reason (libertarian magazine, 2010)
a look across the Tasman shows Swan and Labor are victims only of their own appalling policy choices … The Key government cut itscloth to fit circumstances and chose prudence, tax cuts and growth. In contrast, Swan’s economic management looks dismal. Luke Malpass, New Zealand Initiative (formerly NZ Business Roundtable), in AFR 24/4/13