These are, of course, US statistics, but the same trends are happening everywhere. The Aussies may have a respite but don’t bank on it lasting.
When are the 99% going to wake up? This is the sort of thing that led to the French aristocracy having a date with Monsieur Guillotine. And here, in western democracies, despite having the capacity to decide who rules our countries, we’ve allowed the union movement to be destroyed and our wealth to be stolen.
Let them eat cake
Corporate profit margins at an all-time high
Companies are making more per dollar of sales than they ever have before. (And some people are still saying that companies are suffering from “too much regulation” and “too many taxes.” Maybe little companies are, but big ones certainly aren’t).
Yeah, I know they’ve given up on the promise. The disgusting thing is they shouldn’t have. We can catch Australia. But the longer we leave it the more difficult it becomes – the people we need to do it will all be in Australia.
Since I last investigated our dreadful economic performance the plot’s thickened. The table below is the most current comparison of GDP per capita for the richest 51 countries in the world, click on it to see it full-size. The figures in the table are taken from the CIA’s World Factbook. You may not be enamoured of the CIA, but they do their homework.
You can find us quite easily. The reason I’ve made it so long is that we’re at the very bottom.
With a bit of Googling you’ll find figures from other organisations showing us at a higher position than 51st. It depends upon several things including how GDP is defined, how recent the figures are, and whom they include in the stats. Nevertheless, the trend is the same. Steadily downward and with no sign of relief.
Most often our position is quoted as in the 20s. That’s because they usually only include OECD countries. We’ve been overtaken by a whole gaggle of countries which aren’t even in the OECD.
Mr Bollard and Mr Key please note
Since the 2007 update Australia has moved up 5 places, New Zealand have moved down 5 places.
Before leaping to the conclusion that the Aussies are just digging dollars out of the ground bear in mind that minerals (including oil & gas) comprised only 8% of their GDP in 2007. 7% according to some.
But GDP isn’t everything
Yes, I hear your cry. There are more important things than GDP. I’d rather live in New Zealand than in wealthy Qatar or Hong Kong. I’ve been to both those places and they’re not my cup of tea. Nevertheless, although the best things in life aren’t things, there comes a point where relative wealth becomes important. When a country can no longer afford the level of health care, policing, educational resources, defence and welfare its people expect, then per capita GDP becomes a very big issue.
When the outflow of our most valuable people becomes a steady torrent our collective future well-being is at risk. We need these people creating wealth for New Zealand so that we can repay our rapidly rising debt. I need my grandchildren to live in my country.
We need these people to continue the precious New Zealand can-do, string-and-barbed-wire, punch-above-our-weight culture built up over a dozen decades and more.
We’re paying for our education system to churn out people to build Australia; the medical and dental professions are becoming dominated by people for whom English is a second language; soon we’ll fall behind Botswana and Khazakstan economically.
It matters alright.
To re-iterate, if you wish to find New Zealand in a hurry on this chart, we’re at the bottom of the table at #51.
When I was very young we were #2.
Pray tell me:
What resources do Liechtenstein, Luxembourg, Jersey, Singapore, Hong Kong, Switzerland and Iceland have that New Zealand can’t match or exceed?
Why can’t we compete, for instance, with the Danes? The Swede’s say about Denmark “Stand on a box and you can see their whole damn country.” Like many other economies on this list they have very few natural resources: just good people.
Greenland! Before the crash were they selling ice as well as fish? They’re down now but watch them rebound.
If you want answers to these questions, check my links below.
We need action
A few hints:
More research and development.
Proactive mentoring in entrepreneurial skills for small and medium sized businesses.
Sort out our education services. Less technology, more 3 Rs. Get people with real work experience onto the education coalface.
Jobs, jobs, jobs.
What happened to the war on bureaucracy? Bring the public sector into the real world.
In case it’s escaped notice, the much-maligned employers are the people who create jobs and wealth.
Less arts and law degrees, more science and engineering.
Less time wasters in the student body.
Less welfare, more work.
Less borrowing for hire purchase, more for investment.
It’s a pity they don’t have the ears of our great and glorious leaders. Your taxes pay their salaries but it’s to no avail; the bureaucrats and the politicians are pulling in different directions.
John Whitehead, Secretary to the Treasury, gave a speech in November telling it like it is. These two images, which accompanied his talk, illustrate clearly the problems Just Wondering has been set up to address. When the Treasury Secretary tells the Government publicly that we’re in deep trouble perhaps we should be paying attention and perhaps we should be demanding that Mr Key and Mr English do too.
The must-read text of the full speech is here along with many more graphs showing the sorry state this country is in and indicating the desperate state we’re plummeting into.
GDP gets an F minus; this is the problem
I hate Powerpoint, but I’ll bite the bullet to inflict upon you these two images from the presentation. They say it all:
R&D gets an F too; could do better but just isn’t trying
This is a substantial part of the reason we have the problem. R&D is the key to the beginning of the beginning of restoring our prosperity.
Before the 2008 election, TV3’s Campbell Live looked at Tui Allen’s battle with breast cancer . They concentrated on the fact that there was an almost $40,000 annual cost saving for Tui to fly monthly to Palmerston North for the half hour treatment than to have the same procedure carried out at Auckland Hospital.
The cost differential was put down to different cost structures in the two centres. While it’s obvious that some costs will be higher in Central Auckland, it’s difficult to believe that such a huge difference is justified. I wonder how the bureaucracy ratio compares between Auckland and Palmerston North.
Tui is an obviously brave and positive woman. She and her husband have spent their savings on her Herceptin treatments and raised a loan to boot. I hope and pray that she and her family successfully beat this challenge. Tui’s problem could easily be yours and mine. It’s not just relative costs between two centres. It’s not just about Herceptin and the many other things we can’t afford. It’s not even just about health.
Why don’t we have a decent railway permanent way? First World broadband? Cheap power for the oldies? Why are 20% of New Zealanders living overseas? Why is it necessary for Tui to pay anything at all for treatments which are freely available in many of the countries with which—as Michael Cullen continually reminded us—we like to compare ourselves?
It’s necessary because, as a nation, we don’t have enough cash in the till to pay for everything that’s available and desirable to help people like Tui.
It’s necessary because we don’t earn enough. We aren’t cutting the mustard. We have too many people being paid to produce nothing.
Luxembourg?” I hear you cry. “Who cares about Luxembourg?”
The good people of Luxembourg, a country not much more than twice the size of Greater Auckland, with 500,000 population, earn more than 2½ times what New Zealanders earn.
For every hour of paid work in 2006 New Zealanders produced US$28.30.
For every hour of paid work in 2006 Luxembourgers produced US$72.20.
Luxembourg has next to zero natural resources. One thing they do have is a bunch of people who work effectively. Even more pertinent to our sad situation: a high percentage of those people work in jobs which give a high return on investment.
You work it out.
Next time a politician knocks on your door, ask them why this is so and ask them why they’ve done nothing about it, ask them what they intend to do about it now. Write to a few of them and give them a rev-up. If they bother to reply they’ll lie in their teeth but if enough of us hold their feet to the fire they’ll get the message.
We need to make a noise about this. The answers lie in many areas. Here are just a few:
increasing R & D by business and government;
creating a climate which encourages innovation and providing training to enable entrepreneurs to develop and market their ideas;
reducing the cost of doing business;
making it easier to employ people and for employers to get rid of those who wouldn’t work in an iron lung;
improving our education performance;
providing meaningful work for the employable unemployed:
Our forests are full of pests and noxious weeds;
huge areas of land in need of afforestation;
thousand of miles of coastline and roadsides need cleaning up;
The work has not all been done so why are we paying people not to work?
introducing a capital gains tax;
increasing the New Zealand Superannuation age of entitlement;
and a thousand other things that we’ll address in coming weeks…
If you think Luxembourgers are doing well. Wait till you hear about Liechtenstein.