WHAT I WOULD DO TO GET NZ’S ECONOMY TO CATCH UP WITH AUSTRALIA

This was commissioned by the online edition of the New Zealand Herald. It was published, with slight editing changes, on 15 January 2010.

Let’s leave aside the question of all the ways in which Australia presents a very undesirable model for New Zealand to follow. CAFCA’s issue is foreign control and the 2025 Taskforce includes in its Recommendations that “a much more liberal (foreign investment) regime should be introduced”. Here Australia does provide some positive guidelines – its Foreign Investment Review Board has the guts to, occasionally, put the national interest first and actually refuse some applications. For this it gets pilloried in the media as “obstructionist”. When was the last time that happened with our rubberstamp Overseas Investment Office? Australia has, or recently has had, restrictions on ownership of major sectors of its economy: banks, the media, airlines. NZ has let Australian airlines fly domestic NZ routes for years – but Australia is not silly enough to reciprocate, as Air New Zealand learnt the hard way. Australia has compulsory superannuation, meaning that it has built up a huge pool of funds available for investment. Australia still has awards and stronger unions (despite the best attempts of successive governments to bust them). Most obviously, Australia pays better wages, which is the main reason that Kiwis flock there.

So, the way for NZ to catch up with Australia is to reverse the damage inflicted by a quarter of a century of relentless experimentation by our free market fundamentalists, the Taliban of capitalism. Restore decent wages and conditions; get rid of the legislative “architecture” of Rogernomics; restore the social safety net that has been shot full of holes; realise that the country’s greatest asset is its people and invest in them properly, in areas such as health and education; use superannuation and savings funds to invest in the rundown infrastructure and services of this country, not to play in the casino of the global financial system; end the obsessive compulsive urge to commodify, corporatise, privatise and monetise everything. Develop a foreign investment regime where the national interest is put first, last, and foremost. Introduce controls on capital movements into and out of the country. Emphasise that it us that are doing the favour to these foreign investors, not the other way around; they are guests in our home and must abide by our rules. And reinforce the point that New Zealanders must be the owners of our own country, not tenants in a branch economy.

None of this is “xenophobia” or “isolationism”. It is simply an assertion that New Zealand will engage with the world on our terms. It is the same principled self-interest that saw us go nuclear free and lay down our terms for engaging with the world’s most powerful country. The sky didn’t fall, and the world came to respect our right to do so. We’re still waiting for the world, and Australia, to catch up with us.

Murray Horton
Secretary/Organiser