Free Press - November 2nd
Free Press
ACT’s regular bulletin
Exceptional
Culture
The All Blacks’ back-to-back Rugby
World Cup victories are just a small part of an exceptional
period of dominance. Only the Australian Cricket team and a
guy who played pool in the 1990s have ranked number one in
the world longer than the current All Blacks. Up until 2004
the All Blacks had won 75 per cent of all games, three wins
for every loss. Now they are at 86 per cent, a staggering
six wins for every loss. They are big and they are talented,
yes, but it’s their culture that’s exceptional. Teams
such as McLaren Mercedes come to study the culture and at
least one book has been written on what the world can learn
from them.
New Zealand
Exceptionalism
New Zealand actually leads or
nearly leads the world in a whole host of areas and has done
since the early 1990s. It is not the done thing in the land
of the tall poppy, but this week Free Press rehearses
some of the rankings and achievements that make New Zealand
exceptional, with a few areas for
improvement.
Freest Markets
For 45
years the Fraser Institute have been executing a Milton
Friedman-inspired project to measure who has the freest
markets of them all. They measure sound monetary policy,
low and flat taxes, openness to foreign investment, the
amount of government expenditure, and the strength of
property rights. In 1970 New Zealand had the 21st freest
economy out of 53 measured countries, since the early 1990s
we’ve consistently finished in the top three out of 157
countries. The countries ahead of us are Hong Kong and
Singapore, which are closer to city states than countries,
so we’re first for free markets.
Greatest Civil
Liberties
Freedom in the World has been
measuring political freedom and civil liberties since 1972.
They ask questions such as whether people can freely and
peacefully assemble, and whether the elections are free and
fair. New Zealand has had a perfect score every year the
index has been done, and is one of only seven countries to
have maintained democracy throughout the 20th century. (To
be fair, several more were trying but through no fault of
their own were invaded by totalitarians.)
Best
Place to Do Business
Last week the World Bank
ranked New Zealand second easiest place in the world to do
business, based on measures such as ease of starting a
business, accessing basic infrastructure, and dealing with
government departments such as the tax department. Free
Press realises many small business owners will be aghast
at this result, but it partly reflects that fact that
governments elsewhere are even worse!
Least
Corruption
New Zealand has been pipped at the
post by Denmark and has recently become the second least
corrupt country out of 176 countries measured after a long
run at number one. Those who have travelled and done
business even to presumably Western countries such as
Austria will know that New Zealanders’ sense of playing
fair and above board is rare if not unique in the
world.
Greatest Prosperity
The Legatum
Institute, funded by a Kiwi expat billionaire, publishes an
annual Prosperity Index, measuring the wealth, health, and
happiness of 142 countries. Last year New Zealand ranked
third. We were pipped by Norway and Switzerland, who are
vastly wealthier than New Zealand due to their oil reserves
and proximity to a market of half a billion people. Also,
Free Press suspects the index didn’t consider how
boring those countries are so we are claiming victory on
this index too.
Human Development
We
don’t usually care what the U.N. says. We don’t care
for being lectured on human rights by despots and on race
relations by the occasional genocidal maniac but, since
Helen Clark will soon be running this madhouse, we
acknowledge New Zealand’s strong showing in the U.N. Human
Development Index (7th in the
world).
Environmental
Custodianship
Yale University’s Environmental
Performance Index ranks New Zealand 16th/178 for being a
good environmental custodian. It is a weird index. It
ranks New Zealand first for access to clean water and 95th
for access to sanitation. Then it ranks us 94th for
agricultural subsidies. New Zealand’s removal of all
agricultural subsidies was not only unique but good
environmental policy. Farmers no longer waste fertiliser to
get subsidies.
If It’s All So Good Why Are We
Bothering?
As Graham Henry told the All Blacks
after a 42-6 win over Wales, “the challenge is to always
improve, to always get better, even when you’re the best
–especially when you’re the best.” New Zealand
probably led the world at women’s emancipation by 1900 –
thankfully we didn’t stop then. Plus there are a few
areas where we aren’t leading, with the enduring component
holding us back being the size of
government.
Housing
Affordability
Demographia’s International
Housing Affordability Survey tells us that New Zealand has
the highest ratio (5.2) between house prices and income
anywhere bar Australia (where they have a capital gains tax
and foreign buyer restrictions). While a house in the
average city of over one million population costs 3.6
years’ income, in Auckland it is 8.2. The Demographia
data covers literally hundreds of housing markets and
presents compelling evidence that it is the supply of land
that city councils will let you build on that affects
affordability. Auckland’s result is no surprise given
Auckland Council’s fetish for forced
intensification.
Superannuation
Sustainability
Australia, France, Germany, the
U.K, Belgium, Spain, Ireland, the U.S. and basically every
other developed country is in the process of raising its
retirement age, or at least has announced it will. At the
2006 census New Zealand had five workers per retiree, by the
time current students retire there will be only two workers
per retiree. The interesting thing is it’s not really an
issue for current or imminent retirees; they’re fairly
safe unless there is a radical upheaval. It is however an
issue for the young. Sadly, John Key’s Prime Ministership
will be remembered for delaying the inevitable pension age
adjustment as much as for the flag
referendum.
Foreign Investment
Despite
our general free market credentials we rank 48th/54 for
openness to foreign investment (i.e. there are only six
countries harder for foreigners to invest in). Foreigners
already see a tiny country with a volatile exchange rate
that is expensive to get to, so we pay high interest rates
for capital. Idiotic decisions such as that to block the
Lochinver sale for arbitrary political reasons only make our
natural capital shortage worse. We should remove economic
considerations from the Overseas Investment Office’s
mandate and have them focus only on security. They know
little about economics anyway.
Education
Equality
Despite our high overall ranking, we
have very high education inequality. Much of it is split
along ethnic lines. A Statistics New Zealand breakdown of
PISA results showed that, if considered as a separate
country, European New Zealanders would rank first in the
world, Asian 7th, Maori 28th and Pasifika 35th. We need to
do better at providing education that works for all New
Zealanders.
Imagine….
…if there
was a party that staunchly defended New Zealand’s free
markets while promoting greater openness to foreign
investment, more choice and innovation in education, opening
up the supply of land for housing, and adjusting the
parameters of NZ Super to fit our demographic reality?
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ENDS