I think there are some more fundamental measures of why we will not be catching up anytime soon.

1)

Excluding the Senate, Australia has 1 MP per 140,000 of population, including the Senate it's 1 representative per 91,000 of population.

In the People's Republic of New Zealand we have 1 MP per 34,000 people.

We are way over-governed. It would be interesting to be able to quantify regulation and red tape per capita.

2)

We have an ETS legislated to drag our economy down from July. Australia doesn't.

How insane is that, especially in an environment when the Warmist argument is breaking down quicker than the snow is building up in Washington (heaviest snow fall in 90 years).

3)

And here's a statistic I'd like to know. As we know in NZ, we have 1.7 million people working in the private sector having to carry the dead weight of 1.7 million bureaucrats, beneficiaries and retirees.

What's the equivalent Aussie numbers?

theres plenty of red tape and paper shufflers in australia,stamp duty not just on houses but on car purchase too.their super is means tested so you wont be leaving bureaucracy behind but you will be leaving the beneficiaries behind as there is no entitlement for two years and they dont let the violent kiwis in and often deport them.lucky country indeed!

What a boot in the Bollards Alan has dished out to Beehive John!. It is now an odds on cert the RBNZ will get its budget clipped. Have to make do with budget toilet rolls from now on.

I agree with you Bernard, NZ has a range of assets most of the rest of the world including australia would die for,including hydro power,real tourism assets,the ability to market "brand NZ"real rain forest.World leading ag and fishing industries,relatively uncrowded and clean cities which regularly rank right up there in world rankings as places to live.,to mention a few. Also we have a potential game breaker in the energy field,already our third biggest export earner. That is not to say that we have been judiciously managed,over the years, perhaps Bollard is an example of that.

Alan Bollard will be right, IF WE DONT CHANGE POLICY AND DIRECTION.

Don Brash has spelled out the recipe for success. Dons recipe is not radical its common sence but I have this sneaking feeling that the John Key approach will be too timid for words to discribe.

Mark wrote: "Excluding the Senate, Australia has 1 MP per 140,000 of population, including the Senate it's 1 representative per 91,000 of population. In the People's Republic of New Zealand we have 1 MP per 34,000 people."

You are forgetting the state governments, many of which have two houses. There are 598 state MPs making 1 federal/state MP/senator per 26,000 people in Australia.

To add to my initial post, I can also say that we will not be catching up with Australia anytime soon, because as a population we are made up of too many individuals (including economists) who are stupid.

Case in point:

Christov:

LAQC is about to get a big SMACK"¦.IRD will be given full mandate to audit and enforce with extreme prejudice.

Sean:

... and as for LAQC bang them as hard as possible as they have done nothing to bring any money into New Zealand in regards to real income or real wealth creation

Such comments represent a complete mis-understanding of what an LAQC is.

To copy and paste a post I made early in the new year, upon seeing a similar stupid mistake being made by Mark Weldon:

While I think the coming tax attack on property is abhorrent, and it doesn't solve NZ's true problem being intrusive government in the business sector (and our lives), I am becoming disheartened by the dearth of analysis and knowledge from our supposed business leaders and politicians (although I would expect it of the latter and their bureaucratic cronies).

The latest offender: Mark Weldon.

In today's Press, Weldon has launched an attack on LAQC's (Loss Attributing Qualifying Companies), which he calls a joke, thinking he is launching an attack on property investment, the argument being that Kiwis are over-invested in property, to the detriment of our productive sector. But the joke is not LAQC's, it is Weldon. An attack on LAQC's is not an attack on property investment. I simply make two points:

1) The government attacks LAQC's. This is no issue for property investors, they simply buy investment properties through sole traders, partnerships, special partnerships or joint ventures, and losses can be offset against an individuals other income regardless. That is, the LAQC is simply a business structure, attacking that structure will make no difference to property investment.

2) I don't know how many, but I have a number of client LAQC's on my books, quite a few in fact, but not one, repeat, not one of those is a property investment company. It just happens to be that LAQC's are a very useful structure for small close knit groups of people, often families, to run just about any sort of business you can imagine. That was how QC's and LAQC's came about: it was simply the - unusual - government acknowledgment that a small family company should not be weighed down by the bureaucracy and red tape of a Fletcher Challenge or a Telecom, thus could elect into the QC regime and have IRD treat them in many 'simplified' ways as much like a partnership as a corporate.

The shame of this shameless attack on LAQC's by people who should know much better "“ and it is alarming they do not "“ is that politicians and bureaucrats are just stupid enough to take this nonsense to heart and actually attack LAQC's which will achieve nothing they think it will vis a vis property investment, but deny many small businesses a perfect structure to operate under.

Given the above, I end this post with a question. New Zealand's stock exchange is being run by a man that seemingly does not understand the difference between a business structure and a business operation, and is prepared to look like a fool in the MSM, and is happy using the force of government, advocating the demise of a structure to correct a perceived imbalance of business/investment types in our economy, when I have just shown the first has no affect on the second as they are two different issues. How well is the NZX served by this man?

If Weldon wants money invested in the NZX, that being the purpose of his attack on property investment "“ one might fairly assume "“ then he needs to advocate the business environment which encourages a wide range of lower risk established operations through to innovative higher risk start up operations to be listed on the NZX to be invested in. That environment is one where big government, and its taxes, red tape and regulation, are taken out of the market to allow business to get on with the business of wealth creation (acknowledging every government transfer of business funds from that sector to the public and welfare sectors, is a destruction of wealth).

Weldon should concentrate on only that.

Just as in the past individual freedom from tyranny was hugely boosted by separating government from religion, so now we must separate government from the economy.

Mark Hubbard

Bernard, please also post any responses to "content with the crumbs from Australia's table" you encounter in Aussie media. They're having a field day I imagine.

Sean: on your logic, partnerships, sole traderships, special partnerships and joint ventures can and all are 'abused' in exactly the same manner as LAQC's, so do we get rid of them as well?

It is just a business structure.

How have other countries succeeded in becoming richer than us, without the natural resources of either Auz or us?

Would geographic proximity to markets have been a problem to them?

Cheers, Les.

We are smaller country so what's wrong in eating the crumbsof the Australian table? In reality, a mouse can't take on a big fat cat in a fist fight (I suppose it does happen in Cartoon Network programs).

I think NZ just full of pc sheepee who do nothing but pay for consultants to come up with bright idea's for NZ but no one has the balls to change anything for fear of upsetting anyone.
I think John Keys speech will define if he is a leader or a pc sheep.
Good on Bollard for having a dig

Check this out RT:
http://www.theage.com.au/business/the-bear-bullish-on-metals-20100208-nl...

You got that one correct - most of the world could not care less where New Zealand is and I know that for a fact having lived in Europe for 2 years (not England).

Les said:

How have other countries succeeded in becoming richer than us, without the natural resources of either Auz or us?

Size of government, and it's stranglehold over an economy - economic freedom.

Example: Haiti and Dominican Republic: GDP per capita: Haiti, $800. DM, $5000.

Two systems, same culture, in immediate proximity - difference? One, DM, has a freer economy than the other.

Other examples of how free economies (and peoples) lead to prosperity, whereas the more involvement and intrusion to markets governments have, and the bigger those governments are, leads to the opposite: North and South Korea, and the old East and West Germany.

And as I said above from mid this year, we are hampered by a senseless ETS, Australia isn't, and that will make the gap even bigger.

Mark I think you have got your view a little wrong re Haiti and Dominican Republic, one of the few things they share in common is violent repression, dictatorships and corruption. Even the ethnic makeup is quite different.

NZ Mineral resources - good to see some reality creeping in here Bernard.
NZ has substantial mineral resources -
1. coal - there are HUGE coal resources in NZ.
2. Ironsands - this is a HUGE resource.
3. Gold - good level of gold mining in NZ - there is a lot more to come.
4. Ilmenite sands - a very large resource.
5. non-metallics - limestome - enormous resources.
6. oil and gas - there is a lot more to come of this - patience is needed for this is a very expensive business.
the future - undersea minerals from the volcanic vent systems - this is the future for the world for metal mining, and NZ is extremely well-placed - patience again is needed.
The government's job is to encourage and allow mineral exploration and exploitation.
The easiest to tackle are coal and ironsands esp. coal - we can do better than just what is already extracted from the West Coast coking coal mining and export industry.

brother Says:
"I think NZ just full of pc sheepee who do nothing but pay for consultants to come up with bright idea's for NZ but no one has the balls to change anything for fear of upsetting anyone."

Spot on m8..I think we have spent more on consultants rorting the system just on the Auckland Harbour bridge subject in the last 40 odd yrs than what it would have cost to do yrs ago.
I think the last time we had someone with foresight and balls was Robbie back in the 60s.

I do have to agree with BH...we are stock taking resources on DoC land, and feasibility of getting it out without upsetting too many greenies....
We may not be able to catch up and equal, but certainly can do better than Tazzy.

Key has been in for just over 1 yr...he will be at lease a 2 term PM
long way to go yet, and I think/hope we will see his true colours in 2010

Yes Robbie was a man with vision, if only the wa..... had listened to him Auckland would have been a truly global city with no transport problems etc.
Unfortunately NZ truely lacks people with robbies vision and leadership.

Mark H...just a thought. From memory, in the eyes of the IRD a business is something entered into with the ultimate intention of making a profit. If it is never going to make a profit then its not a business, and therefore no tax deduction ?

If so then perhaps its a case of the IRD enforcing the legislation already in place ?

Undersea mining,ironsands......now you see why Foreshore and Seabed are an issue.

NZ has a huge underclass. Lousy achievement at secondary school,underpinned by govt subsidies to the unemployed and under employed. Huge nos of part time workers on lousy wages get top ups from tax payers,so wheres the incentive to work harder or smarter. I'm not saying theres no place for welfare,but sadly NZ is going nowhere fast.

Our best and brightest largely know that and vote with their feet.

Sure people come back when they have kids but the beaches and mountains aren't going to pay the bills...oh sorry I forgot ,the gummint will top me up.

lets give away the notion of a healthy economy being about how much you earn. Its about how much you earn relative to HOW MUCH THINGS COST. Try buying a house in Aussie on an Aussie income and you will find it more expensive even than grossly overpriced NZ. This is the result of 20 years of uninterrupted (except maybe last year) economic boom. The Aus lifestyle is being eaten away by this infatuation with growth at all costs. Sure the banks and building industry want it, but at 1 millon plus for a basic 3 bed house with a backyard remotely close to the CBD ? do we really want this? Do our kids want it?

At least in NZ (and perhaps because our economy is weaker) we have come around to the idea that housing is killing the economy. The govt is likely to act, and I think once ppty drops 40% relative to inflation, we will find the quality of life in NZ far superior to Aus (barring of course the weather and beaches which we cant change). In Aus, vested interest spin dominates the media, voting behaviour and govt decisions (lobbying is HUGE in Aus). Households are losing out big time.

NZ has a habbit of taking too many people in from outlining countries who couldn't be bother finding a job and relying on the state's handouts. My top rate tax is supporting them

Gingerbreadman......Where is your LAQC? or do you have issues about shifting your portion of the tax burden onto others? I hope it's the latter. Cheers

Mark Hubbard...............Ahahahahaha!!!! now you eat the donkey doo.....see I left some for you....!!

Let's see ya talk this one back up boyo..... come on get up horsie...come on you can do it.... we got the banks depending on us......horsie....horsie..? ahhh s#%t no.

I think too many kiwis look at Aussie through rose tinted spectacles. They have all the same issues as the rest of the anglo saxon countries. Often the SMH reads like the NZH. Woes about education, health, property, immigration, power cuts.... with a few extra ones that aren't apparent in NZ - blatant state and federal government corruption as well as an aggressive, racist and corrupt police force in all the states.
Oh yeah, and a cronic becoming acute lack of water.

How much of Aus mineral wealth ends up in the pocket of the average aussie?

Don't most kiwi migrants to aus comment on the level of federal government handouts and rebates they can get?

Australia is big government personified if you ask me and their economy even more dependent on China and their housing market than NZ

don't get me wrong I was an immigrant myself back in the 80s. Back then, I worked 4 jobs to put myself through uni and work full time very since. Few years ago we were involved in a retail business in S.Auckland, we hired a number of people for our retail shop at $14/hr. Most can't wait for us to fire them so they can go on the dole straight away. Then we got a number of people who willing to work so they can settle in NZ - and we weren't allow to employ them!

Bytheway, I don't have a LAQC as I don't believe in that structure

how much of the mineral wealth ends up in the pocket of the average aussie?
are u serious----who pulls the stuff out of the ground--miners --what do they live in--house,s---who builds the house,s--builders--where doe.s the mining equipment come from--transport co,s who need--big sheds + factory,s etc etc etc-- it goe,s right down the line

There is no way one can compare Singapore to NZ..
Singapore, Hong Kong, Instabule, Venice, London..blah blah blah are or have been major ports and cities on international trade routes.
It has noting to do with the financial model....hell damn near any financial model on a major trade route will work.
One has to apply the practcal real world and think outside the office desktop theories

Bollard is missing the point that with all of our trading partners moving towards strong economic growth, with increases in net migration, and with mortgage interest rates dropping, that there will be a strong swing back in residential property prices. Our economy will bounce fast, despite the doom merchants talking it down.
Auckland house prices increased by 7.3% in a year, and Kiwibank variable loan rates at 5.65%, watch out for a mini property surge in Feb 2010. Still bargains out there with houses priced below 2008 council valuations available. http://tinyurl.com/ygs92ls

Auck Bargain House said........Auckland house prices increased by 7.3% in a year, and Kiwibank variable loan rates at 5.65%, watch out for a mini property surge in Feb 2010. Still bargains out there with houses priced below 2008 council valuations available. http://tinyurl.com/ygs92ls

Come on horsie ...... you can do it....I don't wan't to have to flog you..!

mark --dead right--during my recent nz visit i got involved in a debate reguarding the merits of owning a mobile phone[i was using mine there]--opinion was that they where a waste of time + money and anyone who needed to contact u could leave a message on the anwsering machine at home--this from someone who run a small
business--

The same person who feels we will not catch Australia gave me the "dream on" reaction to my suggestion that we need to learn from Singapore. Starting with nothing their policy choices have delivered higher growth, lower interest rates and lower inflation over the long run.

http://www.realeconomy.co.nz/29-getting_things_done_the_singapore_way.aspx

and

http://www.realeconomy.co.nz/25-must_we_be_a_straw_in_the_wind.aspx

Given the resource list provided by Bernard and richgraham and the right policy choices maybe it is all an aspirational issue, right from the very top?

Policy choices, policy implementation are pretty straightforward when you cling to the TINA mindset.

Steptoe (Steps) Says:
There is no way one can compare Singapore to NZ..
Singapore, Hong Kong, Instabule, Venice, London..blah blah blah are or have been major ports and cities on international trade routes.
It has noting to do with the financial model"¦.hell damn near any financial model on a major trade route will work.
One has to apply the practical real world and think outside the office desktop theories

Sorry Steptoe "¦.the data doesn't agree with you. Singapore and New Zealand have almost exactly changed places with each other over the last forty odd years in GDP / Capita. So if all it took was being a major port it was one twenty years ago. What's changed since is a real world business approach to running Singapore for the benefit of Singaporeans.

Singapore is currently No 9 in GDP per capita in the world and we are no 46. In 1965 Singapore was No 42 in GDP/Capita and New Zealand was No 11. Let's not swallow all the excuses the politicians give for their mismanagement. Lets actually digest some of the data and start challenging those one liners designed to keep the population fat dumb and happy building LAQCs till we only know how to trade internally.

Jacko...saw them as well...Go John!

Auckland Bargain House Says:

Auckland house prices increased by 7.3% in a year, and Kiwibank variable loan rates at 5.65%, watch out for a mini property surge in Feb 2010. Still bargains out there with houses priced below 2008 council valuations available. http://tinyurl.com/ygs92ls

Go get your clients and show them the houses and stop wasting time here. We have all seen the enormous benefits of selling houses to each other, ratcheting up the prices and how it builds jobs, creates export earnings, lowers our national debt, prevents carry trade and keeps the exchange rate in check......NOT. Try and think about something other than useless over priced assts that kill our economy.

powerdownkiwi Says:

Biggest failure has been the media. They all "“ including Bernard "“ studiously fail to engage in the "˜limits to growth' debate "“ which reduces them to the status of propaganda touts.

So So true but one persons view of a constraint is anothers opportunity to profit. Capital is a constraint for business, there is a tn of capital out there but where does it all end up?

"How Bizarre"
Born, grown up and involved in the strong area of quality manufacturing of Switzerland I find your exchange of words on this blog very bizarre.

Walter

PS > Please, read and understand this in a context with many other articles I have written.

Selwyn - capital? or fiat smoke and mirrors? Sooner or later, all fiscal activity is underwritten by extracted resources - even an office is built and powered by something, and it's workers commute by car over roads....

Those of us who come at it from a physics angle, will tell you that every thing - every building, everything - represents embedded energy, and that will - by a short margin - probably be the linchpin.

But, population and the 'exponential function' trash growth about now anyway. Years ago, I'd hoped we'd be intelligent enough to take the foot off the accelerator, before we hit the brick wall.

Clearly my old dad was wrong - actually there are more people below average....

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the original point was kiwi,s are under achieving--where tf are we now?

Dinny - you're just another who doesn't get it. How long do you think that 'better lifestyle' (I note you think of assets and consumption as better) will last over there?

When the growth buvvle bursts (some of us think 2007-8 was the actual burst) it's a sunburnt country with no water, except when it briefly has too much.

I'd suggest the middle of Victoria - should be some real-estate bargains for you! Just remember that wheeling and dealing in a finite game is a zero-sum game. You only get 'rich' at someone else's expense.

pwillkie - no point discussing deckchairs - unless you're in denial....

cheers, Powerdown

I must say, you're a good ad for National Standards......

Actually, you're richer in real terms with a smaller population. The catholics got it 100% wrong.

You get more resources per head.

Our leaders don't think so, and our media dutifully report them.

Actually, the sentence was too long.

Our leaders don't think.

:)

"they've run the economy well" ROFL

"Australia is going to fight to keep its manufacturing sector because its exchange rate is going to stay strong or strengthen" - I'm willing to bet Alan on that one LOL

All NZ has to do is ditch the yoke of a corrupt and doomed money system.
While we suffer from that yoke, it's impossible to improve.

Everything else discussed is irrelevant.

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robt .b Says:
http://www.interest.co.nz/ratesblog/index.php/2010/02/08/have-your-say-b...

we have had the benefit of our natural resources stolen and stripped away from us by the usurous cost the foreign central bankers charge us to borrow their created credit credit via the govt bond exchange for debt thing, adding 2-3x true value to anything we attempt to do. Their is only one inevitable result under the current obscene scenario and that is repeating debt repayment crisis that forces us to sell our necessities of life to them at firesale prices to temporarily alleviate the ever compounding cancer.

Powerdownkiwi said......... the Catholics got it wrong............

Yes they did and so did every other bas%*rd who thinks a "sustainable" growth is represented by "human" increase.

There is solid ground to argue that "Quality" growth should in this country be the preferred option.

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