Don’t know the best way to put this but ill try.
As much as I love this country, we have fallen soo far behind. I don’t want to get to political, but I think Labour tried to fix it in one way, now Nat will try the other. Neither will work in the time they have.
We always prided ourselves on our past accomplishments- women vote, Hillary, Rutherford, Nuclear Free, Maori Batallion - and what we are as a country - massive dairy producers, amazing tourist destination, friendly people. But we have dwelled on it too long and got complacent. Our desire to repeat our past success has made us miss opportunities that require years of investment, and meant we are now in a cultural and economic hole that will be increasingly difficult, expensive and time consuming to get ourselves out from.
We have a tiny population and limited housing in an empty country where people have limited desire and finances for kids. Massive farms that produce income for a few overseas investors or historic families. Massively increasing inflation and cost of living due to our long supply chains and small industry base, especially compared to overseas. Falling education at a time we needs teachers, medical persons, engineers and tradies… unis are slashing courses, councils are running out of money, and overseas investors will funnel more out of the country.
I just want others thoughts around this - I have multiple ideas and theories, but I want to hear from you all.
This is quite difficult to pin down.
When looking at productivity over time, the productivity over time stats; the increase in productivity aggregate is approx 1.4 between 1996 and 2022. This didn’t make much sense to me until I looked at the definition of the index, the growth of 1.4 is normalized for inflation and wage growth because the labor cost is one of the inputs.
So we as a country have increased output by 140% between 1996 and 2022 over and above cost increase. This could easily be read as the wage growth lagging the productivity growth by around 1.3% per year.
There are a few other things that are going to happen over the next 30 odd years (in my opinion); mainly driven by climate change. A lot of money that currently flows out of the country will stop, oil will generally be supplanted by locally produced electricity (a large % of this money will stay in our economy), climate resilience will force us to prioritize local production.
I really wish that kiwis would prioritize local banking; billions flow out of the country every year that don’t need to. Obviously we still need competition, but a few local banks could displace the foreign owned banks.
Basically what I am getting at is that our economy seems to export taxable money; if that money had stayed here tax could have been collected and fed back into our systems to increase what could have been provided; especially social housing and education spending.
This is structural. New Zealand has a really low level of domestic ownership of productive assets, and a corresponding obsession with an unproductive asset i.e real estate which creates our incredibly high levels of household debt (as you point out, mortgages are held by Australian banks).