From rock star to rocky

It hasn’t taken long for the New Zealand economy to sink from rock star to rocky:

Paul Bloxham, HSBC’s chief economist, once described New Zealand as a “rockstar economy”.

That was back in January 2014.

Today, there is nothing “rockstar” left about the New Zealand economy, unless you have Ozzy Osbourne in mind.

For more than three decades, the Swiss Institute for Management and Development (IMD) has compiled annual rankings of competitiveness for 63 of the world’s most important countries. It makes for sobering reading for New Zealanders.

Back in 2017, New Zealand ranked #16 – ahead of Australia at #21.

Five years on, New Zealand has fallen to #31, while Australia is now ranked #19. . . 

And the reason? It’s the economy.

Over the past few years, we have plunged in economic performance, falling from 22nd to 47th place. Government efficiency has also deteriorated markedly from 7th to 17th place.

That’s not a record for this government to feel proud of. And it gets worse.

Altogether, the IMD’s ranking comprises 25 subcategories. In eight of them, New Zealand finds itself in the bottom half of all countries. And these are the categories that really matter: domestic economy, international trade and investment, inflation, productivity and efficiency, attitudes and values, and technological infrastructure.

The IMD noted New Zealand going in the wrong direction on subsidies, inflation, tourism, brain drain, public finances, skilled labour, competent senior managers, and central bank policy.

As shocking as it is to see the IMD’s assessment, if we are honest, none of this should surprise us.

We know that our public finances are not in good shape.

We have observed the erratic behaviour of the Reserve Bank.

We are watching the onset of a new brain drain to Australia and the rest of the world.

We have seen how Covid has decimated our once thriving tourism industry.

And we feel the effect of inflation every time we fill our cars or do the weekly shopping.

Where the IMD’s competitiveness ranking holds up an external mirror to us, Westpac’s Consumer Confidence Survey, released this week, shows that Kiwis also understand how dire our economic situation has become.

Consumer confidence in New Zealand now stands at the lowest level since that survey began in 1988. And, perhaps most damningly, for the first time, a majority has a negative 5-year outlook on the economy.

These are not just signs of a small downturn. These are signs of a former rockstar in a policy-induced coma.

Economic performance isn’t just about the economy for the economy’s sake. It’s about the ability to fund the infrastructure, services and technology we need, it’s about the ability for people to afford what they need to live a good life; it’s about confidence that the future will be better that attracts inward migration and investment and stops the outward flow.

It’s not just the economy that’s going in the wrong direction, there’s been a slump in livable city status for Auckland and Wellington:

New Zealand’s reign of trump is over as Wellington and Auckland have nosedived in the latest world’s most livable cities ranking survey.

The 2022 Economist Intelligence Unit’s (EIU) Global Liveability Index, released on Thursday, saw two of New Zealand’s biggest cities receive massive drops in the rankings.

Wellington had the biggest drop in the rankings, going from four down to 50 while Auckland also plummeted down the rankings from one to 34.

The index ranks 172 global cities for their urban quality of life out of 100, based on an assessment of their education, healthcare, culture and environment, stability and infrastructure. . . 

Vienna, was number one with 99.1

Auckland rated 89.2 and Wellington 85.7 which aren’t really bad, but will make it harder to attract the workers we need.

Covid can take some of the blame, but it’s not a uniquely New Zealand problem and it’s an indictment on the government.

Remember its Wellbeing Budget?

These rankings show that can be filed in the failure bin along with KiwiBuild, climate change improvements and all the other announcements that haven’t led to delivery.

2 Responses to From rock star to rocky

  1. adamsmith1922 says:

    Totally agree, see my comments on this also, note how we have declined in Digital Competitiveness as well https://adamsmith.wordpress.com/2022/06/26/forget-the-nonsense-from-ardern-and-robertson-new-zealands-economy-a-shadow-of-its-former-self/

    Like

  2. Bulaman says:

    Delivery on Climate Change is an oxymoron. there will never be anything “delivered” there is no crisis and any money spent is wasted. It should be the first thing defunded as we fall into the inevitable depression caused by wasteful zero quality spending.
    The public service spend needs to reduce by at least 20 percent per annum for the next 3 to 5 years to have any hope of maintaining the current standard of living in this country. Its going to hurt but it has to be done.

    Like

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