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The scale is logarithmic for a reason. It gives you a measure of the percentage increases in GDP per capita in NZ compared to other nations. Every single year over this 35 year period, as far I can see from eye-balling the graph, with the exception of 1998-99, NZ's percentage rise in GDP per capita has been way lower than the average. When I was in my 20s in the 1990s, NZ's GDP per capita was about 6 times the average in the Asia-Pacific region. As of 2024, our GDP per capita is only about 2 times the Asia-Pacific average. Give it another decade or two, and there won't be much difference - the rest of Asia will be richer than us. What's more, aside from endless political rhetoric from National & Labour, can you tell who was in power in NZ by GDP performance? In fact, during the Key years, from 2008 to 2017, our relative decline accelerated. For the past Labour government, well, don't ask: NZ has recorded a drop in GDP per capita of 4.6%, one of the biggest falls in the world, during the past few years, when nearly every other Asia-Pacific country's per capita income has strongly risen. Last year, Stats NZ reports our GDP has shrunk by 0.2%. Our economy has contracted in 4 out of the past 7 quarters, recorded 0 per cent growth in one, and small positive increases in two. NZ's GDP has gone nowhere over the past two years. The World Bank reports GDP growth numbers for 150 developing countries for 2023-24. Which ones are doing worse than NZ? Argentina, Haiti (war torn), Iraq (war torn), Syria (war torn), Yemen (war torn), Equatorial Guinea (war torn), Sudan (war torn); West Bank and Gaza (war torn).
Our Main Stream Media refuses to put as its leading headline, "NZ is one of World's Worst Performing Economies", since it would make Ardern, Robertson and Hipkins - the leaders of the previous Labour government - look so awfully incompetent. But this Blog is not partisan. John Key did as much damage as that lot. In his case, it was what he didn't do, when he had the opportunity, more than what he did do. What's most remarkable to me is that a nation brimming with natural resources; a nation that never had the energy shock of Europe, which was dependent on Russian gas at the start of the Ukraine invasion (whereas NZ industry runs from hydro power); a nation that was meant to have succeeded in keeping Covid out; a nation with enough food to feed 50 million people (so we export most of it); a nation with zero illegal immigration so suffers none of the problems of Europe & America in that regard; a nation with no troubling neighbors with conflicts raging on our borders; a nation with a mild climate; a nation with a largely decent, trust-worthy, friendly and, despite some poor stats, mostly literate & educated citizenry, can have been so badly led & managed that our abundant advantages have been wasted. My conclusion? Dummies have been in charge.
9 comments:
It’s easy for an unsophisticated economy to quickly improve its productivity but at some point they will start to catch up and the curve will flatten off to a steady state. A linear extrapolation of that chart is probably misleading.
When one considers that much of our GDP is now made up of te reo activity, cone watching, security guards, safety activity, the decline is especially tragic. I do wonder if the god of GDP which encourages the manufacture of consumable clutter, is an effective measure of human satisfaction.
Anonymous is quite right. It takes very little for a country to rise above hand-to-mouth mass poverty to being lower-middle-income - largely a matter of shifting from a largely subsistence economy where people grow their own tucker, build homes from bush materials, etc to a modern production-driven economy. After that, it becomes harder. And once in the upper bracket, a dynamic equilibrium may set in in which there are fluctuations seeing GDPpc fall at times. It's really not comparing like with like.
Interesting that all bar one of those countries with worse GDP growth than us are “war torn”. In our case it’s more of a bloodless coup, happening in slow motion for decades but substantially accelerated during the 6yrs of Ardern’s Labour govt. Our current coalition has merely slowed the pace. The govt funding and corporate back handers are still flowing. $1m pa to Tainui from Watercare, megabucks from Meridian to Ngai Tahu. Daylight robbery.
We seem to be following LtGen Glubb’s prescription of National/Imperial growth and collapse. First the pioneering hard work and development, then the commercial -phase followed by affluence and ‘intellectualism’, then inevitable decadence and collapse. I hope time will prove him wrong.
NZ could be Singapore with expert leadership. Instead it is heading for Third World status ( where the hallmark is often racial unrest) ,
To repeat the question: why do NZ Finance Ministers - both major parties - have no economic/financial credentials ? This means the Reserve Bank is really running the economy,
Complete agree Robert, we are wasting our advantages of natural by not utilising them. As for the comments re Asia is backward therefore is simply catching up, what total tosh.
Asian countries don’t have welfare, you work or go without.
We on the other hand like to pay people to do nothing and vote for political parties who like to fight for losers rights
We have changed from a "can do" to help myself individual. to What can the government do for me" people in just 30 to 40 years. Brought about by our tolerance and presumption that all people are decent and willing to work. Welfare brought in for the right reasons didn't take into account human basic traits that a sizable percentage of us will take advantage of any handouts and other freebies.
This trait is self destructive in that the more we give the more we want all the while becoming evermore lazy and corrupt.
Welfare, unwilling to learn, reluctance to work, and ever increasing demands as the system gets increasingly more bogged down.
We need a great reset but until we have total collapse we will never have the Government or the will , so it's inevitable that like all great civilizations NZ will continue to crumble to a 3rd world country
Our relative economic decline is our transition to a service economy. There is progressively a smaller fraction of the economy in being productive and more leeching on that productivity.Recently I was aware of a striking illustration of the effect. In 1972 I bought 55acres and used it to fatten cattle for the butchers market . 50 cattle cost $10,000 at the time and my salary was $2,400. Recently I attended a cattle sale and similar cattle were $1000 each. Current salary for that position is $100.000 .In 1972 the cattle were 4 times the salary 50years later they are half. People can hardly afford meat so what happened to the relative 8 fold reduction in value?. And that's not the end of rising costs relative to earnings. In 1978 the profit from that farmlet was $15,000, I bought a state house type dwelling in New Lynn Auckland for $30,000. This diminishment of purchasing power of the productive sector happens in a myriad of small nibblings. My wife died recently and as a result the bank insists I close all the accounts held in partnership with my wife and open new accounts. Other than a 300km round trip all the automatic payments, dividends and new internet banking will need to be set up. at not only a cost and inconvenience to me but also to those at the other end of the transactions. Its all make work when as far as I can see it could have been resolved by simply changing the name of the account. I should have originally named all the accounts" ratbag rural holdings" or some such thing and I wouldn't have the problem, but that would have contributed to depriving a whole infestation of leeches a livelihood of feeding off the body economic. The further we travel down this "service" economy path the wider will be the gap between a few rich and a growing desperately poor.
Jones says our problem is low wages, he's wrong. Its low productive output which GDP per capita does not show. Murders don't add to the economy but the legal costs to prosecute and defend them. Despite this and the fact they reduce the capita they can hardly be recommended as a GDP growth method. We don't murder people but we do murder their desires to do something productive.
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