Christopher Luxon has stated that the government must deliver on rebuilding the economy to lower the cost of living and allow us all to get ahead. *1 How will they achieve this lofty goal? The easy wins will be removing Three Waters, the RMA, and the Māori Health Authority, but turning the economy around is a much more challenging task. While I agree with removing all the divisive policies and woke issues that have plagued New Zealand in the last three to six years, fixing the economy will be the true litmus test of this government.
While some in the media have derided David Seymour for creating a Ministry for Regulation, it is in fact a good start to be looking at streamlining regulations that are holding back economic growth. The old Resource Management Act (RMA) and the one proposed by David Parker are good examples of how the economy was restricted by legislation. It is not only a New Zealand problem, but a plague that has infected much of the developed world. New Zealand is not alone, and similar problems exist in California, for example.
The RMA and David Parker’s proposed changes were a major handbrake on the economy. Building projects, consents, reviews and the objection process have killed many good projects over time. Naturally, this is an area the new government will look to address. If they can get this process right, and with the new Ministry for Regulation, we should see the economy being turbo charged in the coming years.
National’s proposal to build 13 major new roads will also enhance economic development. These new roads will help to efficiently move goods and services across the country. Labour opposed Transmission Gully and if they were elected in 2014, they would have halted this project. Thankfully, National won and in 2015 the project began. Combined with the motorway extension to Otaki, the economic impact from this project on Wellington has been immense. There has been a reduction in the road toll and the human cost as well. The new government must build a major arterial route past Levin, to Bulls, as this is the natural extension to the motorway. This is the point where State Highway 1 to Taupo splits with the state highway to Whanganui. There are other projects on the new government’s agenda as well. Another development would be to extend the motorway on State Highway 1 past Cambridge to where traffic splits to Tauranga. This is another choke point that should be removed to allow free flowing goods and services.
Thankfully, the new government are scrapping Let’s Get Wellington Moving (a misleading name if ever there was one), to improve the access to the airport by building a second tunnel to free up traffic travelling from the airport to the city. Currently this 11km journey can take up to over an hour at peak times. In Auckland, the 22km journey from the airport to the city can be only 25 minutes because of the improved infrastructure.
Furthermore, it is imperative that the government develop the IT industry to its potential, as they have been considering. Foreign investment is also needed. The government should consider how Ireland has rebuilt its economy by using foreign investment and lower taxes. As Dr Bryce Wilkinson wrote in August 2023, “Back in 1979, Ireland’s national income per capita was 22% below New Zealand’s. By 2021 Ireland’s was 68% higher. By 2021, Ireland had accumulated over 14 times more foreign direct investment per capita than New Zealand. In Ireland, even local councils seek foreign investors.” *2 Ireland is now one of the richest countries per capita, while New Zealand has slipped to one of the worst in the OECD. Sadly, NZ First, being part of the coalition, may be averse to this strategy, thus putting a handbrake on the economies rebuild.
There should also be a review of a capital gains tax to help move investment from property to meaningful investment in industries and new businesses that will drive the economy. Sadly, the coalition will probably not consider this.
However, the government also needs to focus on education. Education has fallen to appalling standards, with only 46% of children regularly attending school. Those that do attend, fail at basic core competency in maths and reading. Furthermore, our NCEA standards and science and history curriculums have become dreadfully infected with critical theory and woke ideology. Not only is it imperative to improve our economic efforts, but we must have all children attending school and learning sound principles to ensure we have an educated workforce able to take advantage of economic growth. I am sure the new government will work hard to achieve its educational goals. Although this may only occur if the government bureaucrats allow it. Current educators are mostly left wing in orientation, and if not, deeply influenced by critical theory ideology. Therefore, the government will have a monumental fight on its hands to achieve its ultimate goals to realign education outcomes.
To conclude, rebuilding the economy will have headwinds from within the coalition to bureaucrats, to even the media fighting hard to prevent it from happening. It will take strong leadership and shared determination to overcome these problems.
*1 NZ Herald 28 Nov, 2023
*2 Dr Bryce Wilkinson, NZ Herald, 10 August, 2023