Unequally rich better than equally poor

How’s this for a symptom of economic illness:

More than half of all new jobs created in New Zealand since 2004 have been in public administration, health and education, while the number of jobs in major export industries has shrunk, Finance Minister Bill English says.

“. . .  While these sectors are important, they have grown unsustainably. Since 2004, they have grown by more than 20 per cent – or over four times the growth rate of other sectors.

“During this time, employment in agriculture, forestry, fishing and manufacturing has fallen.

“This pattern cannot continue,” Mr English says. “We are simply ending up with too many workers in mostly public sector industries and not enough employment in the more productive parts of the economy to support them.

“That is why our overall productivity growth has been negative for a decade and we ended up with large balance of payments deficits.”

A decline in employment in areas which pay tax more than outpaced by an increase in jobs paid for by taxes is a sign of economic malaise.

The government is focussed on turning that around and it’s working. More than 20,000 new jobs were created in the March quarter and the tradeable side of the economy outpaced the domestic side for the first time in eight years.

Some people will get richer than others as the rebalancing of the economy in favour of the productive sector continues.

But it’s better to be unequally rich than equally poor which is where the unsustainable redistributive policies of the previous government were taking us.

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