I've said it before, but Bernard Hickey's description of NZ's economy as "a housing market with bits tacked on" still sums it up best. Like US gun politics & EU farm subsidy politics, reform is way overdue but wealthy & powerful vested interests conspire to preserve the status quo to the detriment of the public.
If you wanted to sum up the problems of the New Zealand economy in a single word it would be "colonialism". The obsession with landed property goes right back to colonial times when the New Zealand Company decided that it could fund itself by property speculation, a tool which was then taken up by the colonial authorities themselves. New Zealand as a colonial entity was founded on speculation in land, and the current position is that this means to wealth has percolated down from corporates, government and large run holders to fairly ordinary middle class families. Property speculation has always been associated with inequality, in the first instance quite explicitly and intentionally. The New Zealand Company wanted to establish a British-style class society in New Zealand. To manage that it had to keep the price of land high, so that hired laborers could not easily set up as farmers in their own right. Thus land speculation served a dual purpose of maintaining class distinctions while helping to fund government and returning a profit to shareholders. The privatization of state assets commencing in the late twentieth century were just the last stage in colonialist governments' attempts to fund themselves through the sale of property. Quite obviously there could be no long term future in such an approach, but then colonialism does not require a future. For colonialism the future is always somewhere else. It is the "home country". For the first hundred years or so that "home country" was Britain, but now it is the US. It is no coincidence that the current Prime Minister, Christopher Luxon, keeps a mansion in Hawaii, his predecessor Jacinda Ardern is now domiciled in the US, and former Prime Minister John Key is also based in Hawaii.
So there is a continuity in colonialist politics and the colonialist economy that goes back to the very beginning. Only now the system is running out of steam. Everything that can be sold has been sold. Even our souls. That is reflected in the a lack-lustre economy and in the behavior of an appallingly amoral colonialist political class.
That is the bad side to our situation. There are of course positives. While tangata motu are not generally visible and are not part of the official discourse, they do have a social and economic impact. At some point the colonialist system will collapse on account of its own internal contradictions. Then Aotearoa as a whole will enjoy a stable, sustainable economy based on an egalitarian society.
Let's remember that Hickey's description is exaggeration for effect. It contains an important truth, but we should not overlook the fact that there is still a real economy which still requires our attention. We still need to know what changes are underway in the primary sector and in manufacturing. We need to know the scale and impact of the "creative economy" or "knowledge economy" particularly as it applies to individuals or small enterprises.
When trying to understand what going on economically it helps to set aside as much as possible all biases or isms that may be divisive to find out who ultimately benefits ‘Cui bono’
Good one. Been producing GDP and GNP graphs over this past weekend for a presentation on a not dissimilar theme - and as for that AI paper .. my take is going up later today. Thank you.
Not one NZ politician is telling a story that grabs the many and inspires optimism. Instead we have endless cliches, back to the future and ideological capture. There are numerous studies out there about the power of storytelling in politics to motivate and capture hope. Not one current NZ politician comes to mind in this context, instead we have a number adept at feeding the “beast” of social animosity and angst. Is it possible to tell a story of inclusion that motivates most, except for the greediest of capital builders?
It's possible, Philip, and it's been done before. The difficulty is that new media make the kinds of narratives that cause animosity and angst more prominent.
Yes negative messaging spreads more rapidly helped by the deliberate manipulation of human psychology by the algorithms but positive messaging can be effective if it has emotive impact & deals with social issues important to people. Repeat, repeat & meet where people congregate online.
Grant, more proof we have excellent political leadership which I'm sure dispassionate, cerebral observers will agree, is a sharp and welcome contrast to the previous 6 years.
Reti said it was a “major step forward”.
“We are committing $231 million over the next four years to the New Zealand Institute for Advanced Technology,” he said.
“The institute will invest in research in areas such as artificial intelligence, quantum technologies, and synthetic biology, fields that have the ability to transform industries, grow high-value exports and elevate New Zealand’s global competitiveness.“
The institute will be based in Auckland and be supported by a focused network of research centres working in collaboration with universities, industries and existing institutions.”
Addressing fears about AI, Luxon said it was important that the framework managed the negative implications.
“But I do want to be very clear, in a country where we have low levels of economic productivity, this is one of the five things that we know are absolutely critical to embracing more of in order to lift the living standards of New Zealanders,” he said.
“There is a lot more upside with AI. And this is a country that needs to embrace a lot more AI, quantum computing, and synthetic biology.
“All of that adoption of technology will actually make our businesses and our research much more commercial and actually improve productivity.”
Thanks for the article Grant. Im looking forward to your solution.
Strong, moral, and clever leadership is a key factor in the success amd happiness of a country.
Governments which identify successful industries, then set their countries up to benefit, maximize rewards. AI is an opportunity NZ can't afford to get wrong.
Extreme events like Covid exposed government fraudsters. Sweden balanced the risks and rode the covid wave without ruining their economy, NZ opted for self serving, unintelligent, fraudsters to lead us through the bad flu season and we are paying the very heavy price.
So whilst I recognize the risks you identify, I'm bouyed by the intelligence and moral compass of our prime minister.
The Coalition is planning for the future, establishing structures and systems to take advantage (the infrastructure plan and commission is a great step, it's embarrassing its taken nz so long to establish a model vital for long term success) and managing the risks (the worst of which is another H Clark advised Labour govenrment).
The next election is crucial. A great manager will bolster his executive team with new talent when the opportunity arrives.
Top of the.list should be an AI visionary and a finance minister who can answer tax questions!
To advocate for that Swedish model, you'd need to explain to Kiwis why they ought to have tolerated thousands more of them dying – possibly including someone you know.
Whichever path a country chose, there was a very high price to pay.
My policy on this substack is to delete comments that insult people, and your words about the previous government came close to that. An allegation of fraud may not be taken lightly by everyone.
At least we know who you'll be voting for at the next election!
I couldn't see an analysis of the long term economic and health affects of Sweden's covid response compared to NZ's in the link you sent?
The average age and health condition of covid victims is an enlightening figure which may negate your "high price" to pay comment. A comment which cannot be made in isolation of the affects of overspend on covid. How many young people died since covid because there was / is much less money for safe roads, effective policing, 1st class education, modern drugs, and health screening?
Have you seen the productivity commission report on the costs and benefits of NZs first lockdown? Our Labour Leaders and their chosen experts were given that report and inexplicably continued with lockdowns.
Public Health specialists know there is a balance to be struck between short term reaction and long term health outcomes.
Highlighting the issues and the people who created them is my contribution towards avoiding a repeat.
I will (as always) vote for the party which has the best combination of policies / goals for nz and talent to successfully implement those policies and goals.
Do you have a response to the substantive issue in my post?
Namely, the value of talented and honest leadership willing to forgo short term gains to solve enduring national problems like: high inflation, low productivity, low national income, low external investment, poor education, over priced houses, and inadequate affordable energy.
Coupled with the skills and talent to manage / govern the public sector behemoth to deliver those goals.
Fair comments. I'm not in a position to do the cost/benefit comparison with Sweden etc, and perhaps the point is better raised with the Inquiry. But you may like this previous post I did:
I'm presently putting together a book proposal with the title Political leaders and leadership. So yes, in general, I do see the value of having trustworthy and effective leaders.
Do you mean August 2025 N&S? PS good stuff too, BTW, including the final coverage of the degrowth vs decoupling debate and the way our 'footprints' are often very unequal depending on such factors as whether we own a big yacht or not.
It was 2023 but I copied in my draft as it's paywalled. And good point re footprint, thanks. Even if we manage to harness nuclear fission, the likelihood is that it would be used to extract and pollute at the same or higher rate. It would be great if people would choose to live more modestly and do without big yachts, but they won't listen to me.
You paint a pessimistic picture but most likely accurate regarding the state of NZ. I wonder where are the people with a big vision, like the first Labour government with all their infrastructure projects?
The problem is that you've been captured by the climate alarmist ideology and the idea that the world is going to run out of resources. They said that about oil reserves in the 1960 and 70's, no sign of then running out yet. The reserves are now greater than they were then. Nobody in a third world country will agree with your "green" philosophy. Fossil fuels are here for the foreseeable future. Until small nuclear plants can produce enough electricity to power all the "green" technology including AI, as is happening in Japan at the moment. Solar panels and wind farms certainly won't.
One curious fact about the Limits to Growth modelling from 1972 is that the modelling results have been assessed against the data in the 1990s, 2000s, 2010s and 2020s. The real time data trends consistently confirm the Limits to Growth modelling.
True, Andrew. They weren't able (in 1972) to estimate how much CO2 could be released into the atmosphere ‘without causing irreversible changes in the earth’s climate’, but they did see it coming, as well as other pollution problems.
A lot there to think about, Grant. Thanks.
I've said it before, but Bernard Hickey's description of NZ's economy as "a housing market with bits tacked on" still sums it up best. Like US gun politics & EU farm subsidy politics, reform is way overdue but wealthy & powerful vested interests conspire to preserve the status quo to the detriment of the public.
If you wanted to sum up the problems of the New Zealand economy in a single word it would be "colonialism". The obsession with landed property goes right back to colonial times when the New Zealand Company decided that it could fund itself by property speculation, a tool which was then taken up by the colonial authorities themselves. New Zealand as a colonial entity was founded on speculation in land, and the current position is that this means to wealth has percolated down from corporates, government and large run holders to fairly ordinary middle class families. Property speculation has always been associated with inequality, in the first instance quite explicitly and intentionally. The New Zealand Company wanted to establish a British-style class society in New Zealand. To manage that it had to keep the price of land high, so that hired laborers could not easily set up as farmers in their own right. Thus land speculation served a dual purpose of maintaining class distinctions while helping to fund government and returning a profit to shareholders. The privatization of state assets commencing in the late twentieth century were just the last stage in colonialist governments' attempts to fund themselves through the sale of property. Quite obviously there could be no long term future in such an approach, but then colonialism does not require a future. For colonialism the future is always somewhere else. It is the "home country". For the first hundred years or so that "home country" was Britain, but now it is the US. It is no coincidence that the current Prime Minister, Christopher Luxon, keeps a mansion in Hawaii, his predecessor Jacinda Ardern is now domiciled in the US, and former Prime Minister John Key is also based in Hawaii.
So there is a continuity in colonialist politics and the colonialist economy that goes back to the very beginning. Only now the system is running out of steam. Everything that can be sold has been sold. Even our souls. That is reflected in the a lack-lustre economy and in the behavior of an appallingly amoral colonialist political class.
That is the bad side to our situation. There are of course positives. While tangata motu are not generally visible and are not part of the official discourse, they do have a social and economic impact. At some point the colonialist system will collapse on account of its own internal contradictions. Then Aotearoa as a whole will enjoy a stable, sustainable economy based on an egalitarian society.
Let's remember that Hickey's description is exaggeration for effect. It contains an important truth, but we should not overlook the fact that there is still a real economy which still requires our attention. We still need to know what changes are underway in the primary sector and in manufacturing. We need to know the scale and impact of the "creative economy" or "knowledge economy" particularly as it applies to individuals or small enterprises.
When trying to understand what going on economically it helps to set aside as much as possible all biases or isms that may be divisive to find out who ultimately benefits ‘Cui bono’
Good one. Been producing GDP and GNP graphs over this past weekend for a presentation on a not dissimilar theme - and as for that AI paper .. my take is going up later today. Thank you.
Not one NZ politician is telling a story that grabs the many and inspires optimism. Instead we have endless cliches, back to the future and ideological capture. There are numerous studies out there about the power of storytelling in politics to motivate and capture hope. Not one current NZ politician comes to mind in this context, instead we have a number adept at feeding the “beast” of social animosity and angst. Is it possible to tell a story of inclusion that motivates most, except for the greediest of capital builders?
It's possible, Philip, and it's been done before. The difficulty is that new media make the kinds of narratives that cause animosity and angst more prominent.
Yes negative messaging spreads more rapidly helped by the deliberate manipulation of human psychology by the algorithms but positive messaging can be effective if it has emotive impact & deals with social issues important to people. Repeat, repeat & meet where people congregate online.
Grant, more proof we have excellent political leadership which I'm sure dispassionate, cerebral observers will agree, is a sharp and welcome contrast to the previous 6 years.
Reti said it was a “major step forward”.
“We are committing $231 million over the next four years to the New Zealand Institute for Advanced Technology,” he said.
“The institute will invest in research in areas such as artificial intelligence, quantum technologies, and synthetic biology, fields that have the ability to transform industries, grow high-value exports and elevate New Zealand’s global competitiveness.“
The institute will be based in Auckland and be supported by a focused network of research centres working in collaboration with universities, industries and existing institutions.”
Addressing fears about AI, Luxon said it was important that the framework managed the negative implications.
“But I do want to be very clear, in a country where we have low levels of economic productivity, this is one of the five things that we know are absolutely critical to embracing more of in order to lift the living standards of New Zealanders,” he said.
“There is a lot more upside with AI. And this is a country that needs to embrace a lot more AI, quantum computing, and synthetic biology.
“All of that adoption of technology will actually make our businesses and our research much more commercial and actually improve productivity.”
Yes I was pleased to read about this, Mark.
Thanks for the article Grant. Im looking forward to your solution.
Strong, moral, and clever leadership is a key factor in the success amd happiness of a country.
Governments which identify successful industries, then set their countries up to benefit, maximize rewards. AI is an opportunity NZ can't afford to get wrong.
Extreme events like Covid exposed government fraudsters. Sweden balanced the risks and rode the covid wave without ruining their economy, NZ opted for self serving, unintelligent, fraudsters to lead us through the bad flu season and we are paying the very heavy price.
So whilst I recognize the risks you identify, I'm bouyed by the intelligence and moral compass of our prime minister.
The Coalition is planning for the future, establishing structures and systems to take advantage (the infrastructure plan and commission is a great step, it's embarrassing its taken nz so long to establish a model vital for long term success) and managing the risks (the worst of which is another H Clark advised Labour govenrment).
The next election is crucial. A great manager will bolster his executive team with new talent when the opportunity arrives.
Top of the.list should be an AI visionary and a finance minister who can answer tax questions!
Hi Mark
On the comparison with Sweden, the Royal Commission supplied some figures:
https://www.covid19lessons.royalcommission.nz/reports-lessons-learned/main-report/part-two/1-3-some-key-international-comparisons
To advocate for that Swedish model, you'd need to explain to Kiwis why they ought to have tolerated thousands more of them dying – possibly including someone you know.
Whichever path a country chose, there was a very high price to pay.
My policy on this substack is to delete comments that insult people, and your words about the previous government came close to that. An allegation of fraud may not be taken lightly by everyone.
At least we know who you'll be voting for at the next election!
Cheers
Grant
Thx for your comments Grant
I couldn't see an analysis of the long term economic and health affects of Sweden's covid response compared to NZ's in the link you sent?
The average age and health condition of covid victims is an enlightening figure which may negate your "high price" to pay comment. A comment which cannot be made in isolation of the affects of overspend on covid. How many young people died since covid because there was / is much less money for safe roads, effective policing, 1st class education, modern drugs, and health screening?
Have you seen the productivity commission report on the costs and benefits of NZs first lockdown? Our Labour Leaders and their chosen experts were given that report and inexplicably continued with lockdowns.
Public Health specialists know there is a balance to be struck between short term reaction and long term health outcomes.
Highlighting the issues and the people who created them is my contribution towards avoiding a repeat.
I will (as always) vote for the party which has the best combination of policies / goals for nz and talent to successfully implement those policies and goals.
Do you have a response to the substantive issue in my post?
Namely, the value of talented and honest leadership willing to forgo short term gains to solve enduring national problems like: high inflation, low productivity, low national income, low external investment, poor education, over priced houses, and inadequate affordable energy.
Coupled with the skills and talent to manage / govern the public sector behemoth to deliver those goals.
Hi Mark
Fair comments. I'm not in a position to do the cost/benefit comparison with Sweden etc, and perhaps the point is better raised with the Inquiry. But you may like this previous post I did:
https://grantduncanphd.substack.com/p/the-politics-of-life-itself?r=1t784v
I have also written a number of posts on leadership, if you'd like to browse through. I draw your attention to this one:
https://grantduncanphd.substack.com/p/political-leaders-and-leadership
I'm presently putting together a book proposal with the title Political leaders and leadership. So yes, in general, I do see the value of having trustworthy and effective leaders.
Cheers
Grant
A book on:
- the traits of effective political leaders,
- how NZ can get better quality political leaders,
- and the actions effective political leaders take to improve the quality of life for their constituents,
would be a great tool for voters to make better voting decisions.
The Bible?
Do you mean August 2025 N&S? PS good stuff too, BTW, including the final coverage of the degrowth vs decoupling debate and the way our 'footprints' are often very unequal depending on such factors as whether we own a big yacht or not.
https://northandsouth.co.nz/2023/07/24/august-2023/
It was 2023 but I copied in my draft as it's paywalled. And good point re footprint, thanks. Even if we manage to harness nuclear fission, the likelihood is that it would be used to extract and pollute at the same or higher rate. It would be great if people would choose to live more modestly and do without big yachts, but they won't listen to me.
You paint a pessimistic picture but most likely accurate regarding the state of NZ. I wonder where are the people with a big vision, like the first Labour government with all their infrastructure projects?
The problem is that you've been captured by the climate alarmist ideology and the idea that the world is going to run out of resources. They said that about oil reserves in the 1960 and 70's, no sign of then running out yet. The reserves are now greater than they were then. Nobody in a third world country will agree with your "green" philosophy. Fossil fuels are here for the foreseeable future. Until small nuclear plants can produce enough electricity to power all the "green" technology including AI, as is happening in Japan at the moment. Solar panels and wind farms certainly won't.
No names of visionaries worth paying attention to spring to mind, Anton. And, btw, I'm not captured. Cheers.
One curious fact about the Limits to Growth modelling from 1972 is that the modelling results have been assessed against the data in the 1990s, 2000s, 2010s and 2020s. The real time data trends consistently confirm the Limits to Growth modelling.
True, Andrew. They weren't able (in 1972) to estimate how much CO2 could be released into the atmosphere ‘without causing irreversible changes in the earth’s climate’, but they did see it coming, as well as other pollution problems.
Removed due to suspicious hyperlink.