I’ve been thinking a lot about Paul Callaghan’s fascinating presentation “Mapping our future” and about New Zealand’s economic opportunity.
I first saw a somewhat refined version of his presentation at a TUANZ even in 2011. It so upset the man from the rural sector who followed him that all he could do was stand up and say “More cows. BIGGER cows,” and then sit down again. At least that’s the way I remember it.
One line stopped me in my tracks at the time, and I think about it almost every day. “We choose to be poor,” he said and I cannot prove him wrong.
Callaghan’s pitch to us was that not only does New Zealand work too hard, far more than the OECD average worker, but we produce less than the average OECD worker. That is, we’re doing much more but we’re doing it so badly that we’re wasting our efforts.
Impossible, I thought. Why I’m vastly efficient, doing much more than I used to, working much harder and…
Yeah, he’s probably not wrong there.
Part of the problem is what we’re doing when we’re working. I’m comfortably ensconced behind a computer screen (PEBCAK) and so are most of you, I suspect. In New Zealand, more than 75% of us are employed in the “services” sector which includes a lot of sitting staring at screens.
But the top two economic categories in New Zealand are primary production and tourism and neither pays particularly well or hires particularly many people. Indeed, farming only accounts for about 5.5% of the employment market – quite remarkable when you consider its export earnings.
Tourism is where a lot of Callaghan’s venom was targeted. Tourism employs a lot of people on very low wages and their output is largely based on saying “would you like fries with that” and similar tropes. Yet we seem utterly convinced that tourism will be the second string to New Zealand’s economic bow – or rather, we did until COVID wiped out our market.
Ten years on from his presentation, how are we faring?
Quite poorly I’m afraid.
Rowan Simpson has done the numbers and while it might not be quite like for like, they’re not good. Today, we work harder than we did a decade ago, but our productivity has improved only slightly. We are still choosing to be poor, still choosing low value, low pay jobs that make us work harder for longer for reduced reward.
Part of this is down to our investment capability and the emphasis placed on the housing market. It keeps our economy afloat and makes everyone feel good about the house they already bought (whew) or bad about the house they can’t afford and produces lovely numbers for the media to quote but doesn’t actually generate any kind of investment in our economic future. $10,000 invested in a house today will double in value in a decade but doesn’t improve our lot at all. My dad used to say not to worry about the size of your mortgage or the value of your house as it’s basically Monopoly money – your house might have doubled in value but so has everyone else’s so if you sell up you’re no better off when you buy the next one. He might be right on that point.
But part of it is also down to where we send our kids, how we encourage them into the wrong industries, what we think “being a New Zealander” actually means. We don’t stand tall on the distant hill and bring in the sheep to sell the wool to Mother England. That’s not been us for decades but we cling to this vision of a pastoral lifestyle that’s clean and green and makes enough money for us to be comfortable on.
That’s simply not true.
We need to remind our political representatives that we’d like our children to have a better life than the ones we have. That they should have better access to housing and healthcare, that they need better jobs that are future proofed against the robot army and deliver a better standard of living than we have today, just as our parents wished for the same for us.
We cannot have peaked in 1974, the last time New Zealand’s GDP beat out Australia’s because that means we’re in decline and I refuse to accept that.
The tech sector is the way out of this mess – now we just need to push it to the top of the agenda for employment, training, economic activity and lifestyle.
Because New Zealand should be a place where talent wants to live and not a place where we choose to be poor.