New Zealand needs to make more money if we’re to reach our goals as a nation – Stuff.co.nz

Steve Maharey is a Director and was formerly the Vice-Chancellor of Massey University and a Labour Cabinet Minister.

OPINION: Many years ago, I talked with a senior German government official about his view of New Zealand. He had just flown to New Zealand and while on the plane he had been reading briefing papers.

He gained the impression that New Zealand was a rich nation. But upon arrival he quickly formed another view. New Zealand he said, was good at keeping up appearances.

What he meant by this quaint phrase was that we managed to look well-off when in fact we were not.

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Relatively, of course, it is nonsense to say New Zealand is not a rich country. We are ranked around the middle of OECD nations and we (well, many) have a lifestyle that most countries envy. There are plenty of countries worse off.

But this is not the point. It is not a matter of how many nations we are richer than, it is a question of whether we can afford our collective aspirations.

Right now, those aspirations are on stark display. Every day, I read in the media demands for greater investment in infrastructure, climate change mitigation, the environment, housing, health, education, welfare payments, the arts, science, superannuation, conservation, sport the list goes on and on and on.

There may be areas that do not warrant immediate attention but most do. Our health sector, for example, had underlying conditions before Covid, it is now on life support. The same can be said for many items on the list.

The answer for some is simple raise taxes. There is merit in this argument even if only to ensure those on higher incomes pay a fairer share.

But as anyone who has done the sums knows, there are not enough high earners to bridge the gap between national income and national aspirations.

That gap can only be bridged if we have the kind of economy that earns more, allows for higher incomes and sees New Zealanders able to pay more tax.

Wealth on its own will not solve our problems. The United States is the biggest economy in the world and is home to the highest proportion of rich individuals but almost every aspect of its society is crumbling for lack of investment.

The wealth must be shared, and the Government of the day needs the kind of resources that allows it to invest in the areas we will all benefit from.

This is not an easy argument to make. Those on the right of politics might argue for more wealth, but they have an aversion to paying tax even while they lambast governments for not doing enough.

Those on the left seem more focused on spending what wealth there is rather than earning more.

ROBERT KITCHIN/Stuff

Steve Maharey is a former Cabinet Minister and vice-chancellor of Massey University.

We need to come to an agreement on the need to earn more, pay more tax and support governments to invest in our collective wellbeing.

One of the catchphrases to come out of Covid is Build Back Better. For me this has two elements. The first is that we should focus on quality not quantity. In tourism, for example, lets focus on a smaller number of tourists who spend more.

The second is a more productive, higher-earning economy. We are, for example, a food producing nation. But a casual assessment would suggest we earn about a third of what we could from land and sea because we produce too many commodities and too few finished value-add food products.

How do we make the shift? If Covid was our collective mission over the past two years, our economy now needs to have the same attention.

Leadership from government is essential. A sense of shared purpose between government and business is fundamental.

What we do not want is for anyone to believe that we can pay for our collective aspirations with the economy we currently have.

Ever since the reforms of the 1980s, New Zealanders have hoped for a more inclusive and prosperous future. Perhaps now, in the shadow of Covid, we might decide that the reward for the sacrifices made will come from working together to create the economy we need.

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New Zealand needs to make more money if we're to reach our goals as a nation - Stuff.co.nz