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Economic prosperity and quality of life

Monday 19 April 2004

Kiwis need to understand the link between economic prosperity and quality of life

The policy decisions that reflect our social and environmental values also affect our national prosperity. It is vital that we actively debate the full impacts of values-based decisions on national prosperity, and understand clearly how national prosperity funds social services, infrastructure and environmental quality. The recently released Growth and Innovation Advisory Board research indicates that New Zealanders do not understand the connection – too many Kiwis think they can have the best of both worlds.

The evidence is that our social and environmental quality reflect our economic performance. Ranked just under the OECD average in 1970, New Zealand’s GDP per capita in terms of purchasing power fell to 20th ranking in 1999 (at 82% of the average value). Ranked 11th in 1975 by the Human Development Index, New Zealand fell to 20th by 2001. Similarly New Zealand’s ranking by the Environmental Sustainability Index has dropped from 6th to 19th in 2002.

IPENZ Chief Executive, Dr Andrew Cleland says that it is unrealistic for New Zealand to spend a significantly different percentage of national income on the environment, infrastructure, health or education than any other country. If our national prosperity per capita is low by international standards then we will inevitably have a low spend on the services the survey shows we value.

We want the best, and we must accept that the spending shortfall cannot be made up simply by becoming more efficient. For example, health costs are largely internationally determined, and little affected by local efficiency.

There is increasing evidence that the Resource Management Act, which aims to protect our values, also hinders development, to our national detriment.

Whenever we make a value-based choice to forgo an internationally available technology, we must consider whether it will reduce our economic competitiveness, and lead ultimately to lower social and environmental spending. Sometimes the tradeoff will be worth it; when we chose to use radioactive technologies for health purposes only, but not for food irradiation or nuclear power generation, there was little cost for us. However, the cost to national prosperity of forgoing other technologies such as genetic modification could be much larger, and could ultimately impact on the quality of our schools and hospitals.

No-one suggests that we should return to old-fashioned industrial expansionism or blindly accept new technologies, but we must not bypass promising new developments without properly informed debate in our communities on the benefits they might bring for social and environmental funding versus the costs and the risks they represent to what we hold dear.

Unless the connections between social, environmental and economic performance are better understood in our communities, well-intended decisions based on our environmental, social and economic values could ironically end up contributing to a continued decline on all three fronts – something no-one wants.


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