Have your say: Bollard says unrealistic for NZ to match Australian incomes again

Reserve Bank Governor Alan Bollard has said any suggestion that New Zealand incomes could be raised to match Australia was unrealistic and New Zealand should instead do its best to 'catch the crumbs falling off Australia's table'. Bollard told Guyon Espiner in TVNZ's Q&A programme that Australia's mineral wealth gave it natural advantages.

GUYON You said something interesting about potential to catch up with Australia in November 5 last year in a speech you said "“ we talk about catching up with Australian incomes but we have a better chance of taking advantage of their growth. Is that an admission that catching up with Australia's income and wealth is simply unrealistic for New Zealand? ALAN Yes, I don't think we can catch up with Australia, Australia's a most unusual country, Australia has been blessed by God sprinkling minerals across the top of the surface in very easily accessible areas in places where it doesn't annoy people to mine them. China's there buying all that, it's not rocket science, they've run the economy well, but we just don't have those advantages, but that's all good news for New Zealand because there's a lot of crumbs come off the Australian table that we can take advantage of. Australia is going to fight to keep its manufacturing sector because its exchange rate is going to stay strong or strengthen, and as that happens that's a lot of opportunities for us. I think that's how we should be looking at it. GUYON So the government should abandon its goal of catching Australia by 2025, you're saying it's a waste of time? ALAN Oh it's up to government what their goals are, but to me the most interesting thing is how can we take advantage of Australia's good luck.

Here is a link to the full transcript on TVNZ's website My view:

I think it's easy to overplay Australia's mineral wealth. Only a relatively small proportion of the Australian economy is actually employed in the minerals industry and Australia's mineral exports make up a smaller portion of the economy than our agricultural exports. We have our own advantages. Australia would kill for all our rainfall and green pasture. We have plenty of our own mineral wealth, but have yet to mine it. New Zealand also has the potential to be more nimble and I know from experience working on both sides of the Tasman that Australia can be a difficult place to get things done quickly, given at least three levels of (often conflicting) government. It would be a shame to simply give up. We can do much better here and if we don't narrow that gap we risk becoming a dormitory state off the east coast of Australia. Is that what we really want? Is anything great achieved by being realistic? Your view: We welcome your thoughts and insights in the comments