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For how much longer will our kids stick around?

In a great many ways, New Zealand is an enormously attractive country to live in. We have a temperate climate, largely free of extremes of either heat or cold. We have magnificent mountains, and beautiful and uncrowded beaches. We produce enough food to feed ourselves many times over. In a water-short world, we have more fresh water, per person, than all but two countries in the world. We have abundant open spaces, with just five million people spread across an area larger than the United Kingdom. We have a robust democracy, with never the slightest suggestion that either the armed forces or a mob might try to overturn an election result.


But abstracting altogether from the immediate issues relating to the pandemic and the health and economic consequences of that, there are four major issues which threaten our future – five if we include climate change, but I don’t propose to discuss that given that nothing we do in New Zealand will have any measurable effect on the global climate. All of the other four issues are within our own ability to resolve if only we have the political will to do so.


The most urgent of the four issues within our control is surely the crisis of housing affordability. I have written about this issue often in these columns. The utterly absurd level to which house prices have risen in all our major cities is without question the biggest source of social distress in our community – far too many people struggling to service enormous mortgages, far too many people struggling to pay the rent, far too many people who know they can never aspire to own their home, or provide a stable environment for their children.


And it has been clear to people as different as Phil Twyford and Don Brash for years that while speeding up local government consent processes and improving the competitiveness of the building materials industry might help at the margin, the fundamental issue is removing the artificial boundaries which push up land prices within those boundaries to utterly absurd levels. A house costing $300,000 on a $100,000 section costs a reasonable $400,000. A house costing $300,000 on a $1 million section (as 400 square metre sections in Papakura do at the moment), costs an absurd $1.3 million, and is wildly beyond the reach of all but those earning a very high income or those who have parents who bought into the housing market three decades ago.


The second issue is clearly the rapidly growing racial divide in New Zealand, between those who chance to have a Maori ancestor (always with ancestors of other ethnicities now of course) and those who don’t. This divide has been growing for years, perhaps even decades. But it is accelerating at an extraordinary pace under the present Government’s aggressive drive to divide us along racial grounds. All over the country we see moves to have separate Maori wards in local government; a separate Maori health system; a new Maori Education Oversight Group; assertion by the courts that Maori customary law can over-ride statute law; a proposal that the Three Waters infrastructure paid for by ratepayers over decades should be handed over to four enormous entities with half of their boards appointed by Maori. The He Puapua report, prepared at the request of the Labour-New Zealand First Government in 2019, envisages separate Parliamentary chambers based on race by 2040, the bicentenary of the signing of the Treaty of Waitangi.


The third issue is the very slow growth in the average income of New Zealanders. For those lucky enough to own their own debt-free homes, this doesn’t seem an issue: life is pretty good – no rent to pay, no mortgage to service, largely free education for the kids, free or reasonably affordable healthcare. But for the rest of us, life is pretty hard and compared with people in other developed economies we continue to drift backwards. Why? Because for many years, indeed decades, growth in productivity – what we can produce for given inputs of labour, capital and technology – has been among the very slowest in the developed world.


There are lots of theories about why this is the case. One for which I have some sympathy is that propounded by Wellington economist Michael Reddell. He argues that New Zealand’s very high rate of immigration (one of the highest in the world relative to our population) has obliged us to spend too much of our limited savings in domestic sectors of the economy where productivity growth is low in almost all countries – building more houses, more roads, more schools, more hospitals – rather than in export sectors, where productivity growth is usually high. The availability of imported labour has also reduced the incentive to invest in productivity-enhancing technology.


I would also want to blame local government planning rules, which distort investment incentives and, because of often interminable delays, discourage investment itself. Our grossly excessive and growing bureaucracy has to be another factor, with the long-drawn out and cumbersome procedures of the Overseas Investment Office being a prime example.


Our education system is also failing far too many of our kids, as international surveys show: we have some of the worst results for maths and science of any developed country, and encouraging schools to believe that matauranga Maori is equivalent to science, or that being able to say a few words in te reo Maori will help get a well-paid job, only makes things worse. And to make matters even more challenging, New Zealand is only a three-hour flight away from another English-speaking and much larger country where rewards for skill are much higher.


In the longer term, we have a fourth issue: the failure of successive governments to deal with the looming fiscal challenges of an aging population, as the recent OECD report on New Zealand made abundantly clear. For years, indeed decades, the New Zealand Treasury and independent observers such as the OECD have warned that, while New Zealand’s government debt is relatively low at the moment, the aging of the population will cause a major blow-out in that debt as the cost of New Zealand Superannuation and the cost of taxpayer-funded healthcare both cause a huge increase in government spending unless some change is made to the age at which we all become eligible for New Zealand Super.


Despite the age at which people become eligible for taxpayer-funded income support being progressively increased in most other developed countries, including in Australia, successive governments have flunked the challenge of explaining the situation to New Zealand voters. To be fair, when he was Prime Minister Bill English said that a future National Government would gradually increase the age of eligibility for New Zealand Super from 65 to 67, but he promised that the gradual increase would not even start until 2037!


Sometimes, politicians claim that we can avoid the need to increase the age of eligibility by “growing the economy”. This is a total nonsense, and I suspect that most of those who make that claim know it. Why is it a nonsense? Because New Zealand Super is not a commitment to pay a fixed sum to those reaching 65, it is a commitment to pay a fixed proportion of average incomes so that as incomes in the community increase so also does the cost to the government of funding New Zealand Super.


Some countries face serious challenges which they can do little about – rapid depletion of water resources for example, or extreme political tensions arising from religious differences, or hostile neighbours. We have none of those challenges, and have only ourselves to blame if we see more and more of our kids decide that they can have a better future somewhere else.

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68 Comments


helenmsl2
helenmsl2
Mar 03, 2022

The Treaty was only between the tangata Maori and the Queen when New Zealand was under the jurisdiction of New South Wales, it had nothing to do with all the other people living in New Zealand at the time or making New Zealand into a British Colony etc etc, therefore could not be New Zealand’s Founding Document. THE Treaty founded absolutely nothing. The following link will explain much - http://onenzfoundation.co.nz/the-true-date-of-the-birth-of-our-nation


It's time people learned our true history and not the much reinvented nonsense that is currently being bandied about. We should all be treated the same with no differentiation on race. So much is being given out based on the reinvented history. A huge wrong is being perpetuated upon the rest…

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JW
JW
Mar 04, 2022
Replying to

As you correctly point out, the treaty was between tangata Maori and the Queen, when sovereignty was ceded to the crown. This is why it is considered the founding document of NZ, laying the foundation for Queen Victoria’s Royal Charter/Letters Patent later that same year.

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This can be fixed.

We need our freedoms returned no matter who is upset, Which party has the leadership to be brave enough?

The next party has to spend the necessary time to REPEAL everything that have removed our rights and freedoms - not talk about it, just do it!

If they can't do it give the citizens the power by inserting the Citizen Initiated Mandatory Referendum and we will do it. (The Swiss have been doing it for over 170 years, consequently are the most politically happy voters in the world)

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Replying to

They wouldn't but they won't be in power after the next election.

Its up to the voters to extract promises now from National and ACT and any others.

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mark. wahlberg
mark. wahlberg
Mar 03, 2022

As I commented to a friend this morning, I believe the fabric of NZ's social order that we knew, is broken beyond repair and not able to be fixed anytime soon..


Because of the divisions created by labours policies, there are so many disparate groups and individuals now looking for a political home, there will never be one party for whom one size fits all. I fear what we have and will be given by the Labour Government will be the rule of thumb for any other government elected by a population who will be powerless to control the duplicity which will follow.


I suspect the Governments deceit over issues such as Maori Wards and 3 Waters is small change…


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I was surprised nobody commented on the article below by the ONZF. Covid, like all the other viruses etc. we have had over the years, come and go, but once part- Maori have Co-governance it will never go because our true history will disappear for ever and we will have nothing to fight it with. It has already started to disappear with our true Founding Document and first Constitution, Queen Victoria's 1840 Royal Charter/Letters Patent being removed from the public's view in the Constitution Room at Archives New Zealand and hidden in Archives repository where it must be ordered to research, that it if future researchers know it exists. Do you?

Yes, there will be plenty of housing, care for…

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Replying to

I have found that when fools get what they want they soon tire of trying to maintain it.


Once maori gain control of these assets, and if ardern is re-elected I believe they will, they will soon loose the inclination to adequately run these bloated organisations and natural attrition will begin.


You only have to look at some of the IWI groups governance to see how quickly the rot sets in and any future National led government will soon tire of the pleas to be bailed out.


Self interest seems to be paramount with many within these groups and yes, I do have experience in this area.


My belief is that the labour government is so inept that they have…


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wjthompson
wjthompson
Mar 03, 2022

Good article Don, thank you. It is thought provoking and that has to be good. I have a saying though that says--"when all think alike-no one is thinking very much". And to this end you have got some of your followers suggesting some good ideas.


But the one thing that resonates with all who have responded to your article--is honesty and to stop all the lies being told by politicians. The people are fed up to the back teeth with all these lies--and we receive a daily dose of them from this current: "so called Govt".

P M Ardern and her cabinet are a disgrace to our democracy. They blatantly deceived the electorate at the last election and have continued…


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Replying to

I think we need a new party because of the " nature of the opposition", There isn't one. It is probably easier for those of us who have never belonged to a political party to think this way, Luxon is no different to Ardern. I see a new party with a fresh approach. I don't see them getting the majority of the votes but rather having an influence on the other parties. The party I vote for would definitely have to state their allegiances before the election, Not like Winston. I don't think you are listening to Luxons constant endorsement of Ardern. If you are a National Party member you need to take a step back and watch alternative…

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