Bryan Gould: “..Never mind the gap - the Aussie train’s left the station..”
“..Successive governments have repeatedly expressed their concern at our slide down the OECD economic tables and their ambition to see us climb back up again.
But over the last few years, they have focused that concern more precisely - it is the growing gap with Australia that they now target.
The present government has committed us to catching up with Australian living standards by 2025.
Identifying a target is commendable but that is the easy bit.
Things get harder when we ask ourselves just how we are going to do it.
The starting point is to measure accurately just how wide the gap is.
On the basis of comparative gross domestic product figures, it is said that we would have to raise our incomes by more than 30 per cent in order to match Australian levels, or - in other words -
- the average New Zealand family would have to be $50,000 a year better off.
This is daunting enough, but the worse news is that these figures understate the problem.
GDP figures include that sizeable proportion of our national output that is actually exported overseas to foreign owners whose stake in our economy ..
..is now proportionately greater than in any other comparable economy.
If we exclude those repatriated profits and other payments to overseas owners, and count only that domestically produced output that we ourselves enjoy (as is done with the gross national product figures) ..
.. we find that we would have to increase our output by nearly 50 per cent to match Australian levels.
And that an average New Zealand family is actually $80,000 a year worse off than their Australian counterparts..”
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