While New Zealand has a strong record of delivering prosperity for the majority of its citizens, inequality threatens to put a fair share of the country’s prosperity out of reach of many New Zealanders, says a paper out on Monday commissioned by Chartered Accountants Australia and New Zealand.
The paper – “The Quest for Prosperity: How can New Zealand keep living standards rising for all?” – was written by international think tank the Legatum Institute.
While it hails the country’s top-line record of growing prosperity – New Zealand ranks number one in the Institute’s Global Prosperity Index – it calls for action to fix inequality, address housing affordability and improve economic competitiveness.
“Already, it is clear that current prosperity in New Zealand is not enjoyed equally by all,” the paper says. “The low-skilled, and Māori and Pasifika communities, disproportionately miss out.”
Among its proposals are raising the school leaving age, teaching skills that keep pace with technological change, reviewing the taxation of property, and strengthening New Zealand’s environmental credentials.
The paper singles out education as one of the key solutions to address inequality.
“In particular, it is about keeping everyone in education for longer and equipping them with the skills that will not only offer them a job and development now, but also opportunities in a future economy.”
Peter Vial, New Zealand Country Head of Chartered Accountants ANZ, says the paper aims to provide new insights into challenges to New Zealand’s future prosperity. “It is to enhance the debate on these issues, not provide all the answers.
“The paper shows New Zealand is, by world standards, in a good position to deal with inequality - the fundamental economic, business and governance settings are all strong, as is the country’s social capital.
“However, as a starting point, everyone needs to recognise that inequality makes us all poorer.
“Bold action is needed now for these strengths to translate into better education, housing and health for all New Zealanders, areas in which the paper shows we are less globally competitive.”
The paper warns that future challenges, especially from advances in technology, will “deepen these inequalities”. New Zealand, it says, is more exposed than most countries to automation because of the disproportionately large number of low-skilled workers.
“New Zealand should be proud of the way it currently delivers and secures prosperity for Kiwis,” says Stephen Brien Senior Fellow at the Legatum Institute. “However, maintaining and furthering that prosperity in the future will depend on the depth and breadth of the nation’s human capital.
“To achieve ongoing prosperity, New Zealand must ensure as many people as possible are equipped with the required skills, and have the opportunity, to contribute to society. This will benefit not only the economy, but also the wellbeing of individuals and the communities they live in.”