Last Updated on Tuesday, 11 October 2011 16:35
New Zealand is a small economy and as such, we shouldn’t expect that we can do what larger economies do.”
How many times have you heard that statement?
Personally, I hear it at least once a week, sometimes more often, and it sickens me.
It smacks of defeatism and a lack of vision, and sounds like a convenient excuse. We are a small economy, but like a small business we should be nimble and able to respond to opportunities quickly, while bigger countries continue steaming down the path they are on.
The problem isn’t that we need to close the wages gap with Australia.
It’s that we need to stimulate growth, particularly growth in exports.
In rough terms, Australia’s GDP is around A$1.84 trillion and New Zealand’s is around NZ$189 billion, about 10 percent of Australia’s.
The problem comes when we look at population.
Australia’s population is about five times New Zealand’s.
A middle school math students could tell us that our GDP is about half of what we need, if we want to rival Australia.
If we look at New Zealand as a company, it’s apparent that large bits of it are not paying their way.
The information in this article was current at 02 Dec 2011