Published in the NBR 21 May 2004
The government's Growth and Innovation Advisory Board has given Ministers the perfect cuddly blanket in which to wrap and pamper Kiwis.

You won't have to tell Kiwis they'll have to struggle to get growth, the GIAB report says. There'd be no point anyway. They wouldn't believe you and would reject you and the message.

But by couching growth in the language of our core values (lifestyle and the environment being the most prized), innovation, small business, it implies New Zealand can grow without too much effort or pain, and without compromising what we hold dear.

It's a fluffy, warm, comforting, and politically acceptable message for Ministers. It invites them to encourage New Zealanders to snuggle down, nod encouragingly in the direction of the new icon of innovation and then carry on as before.

The report sees danger in change; New Zealanders don't like it, won't embrace it and see it as threatening our core values - the quality of life and the quality of the environment being the most prized. "During the 1980s and 90s New Zealanders bought the idea that they had to tighten their belts and work hard. They did just that, but the perception is that the rewards never really came as they were promised or were taken for granted and, in important respects, life got more stressful," says Rick Christie, Chairman of the Board.

Although the benefits of the reforms and the gains in our competitiveness are well documented, the government's continuous propaganda baggage against the Douglas/Richardson reforms has presumably had some effect.

However the dangerous bit lies not in the report's documenting of New Zealanders' attitudes, but in the claims it makes based on those attitudes.

"A focus on Kiwi values can create economic value for New Zealand. New Zealanders will be strongly motivated if their values are being reinforced rather than disregarded.

"If we confidently view the world through a values lens - those attitudes and beliefs that are so personal to us all - we will focus on creating economic value which will boost economic growth, GIAB spokesman Peter Biggs claimed.

That is not a strategy; it's a prayer. Boundless optimism meets pious cant.

The logic is hard to follow. There is no guarantee that the products resulting from our innovation will be valued and purchased, or that the margins will be large enough to make us wealthy.

It is an illusory promise that does not disturb those who find the status quo comforting. It is akin to saying we will be successful if we define success in terms of what we are able to do.

The research seems to validate the government's strategy of appearing to support a 'get to the top half of the OECD goal', without actually requiring New Zealanders to make any significant sacrifices to achieve it.

While the report argues that our values are our strength, (it implies that they alone will get us there), it can also be argued that we still lack the determination found in other countries to improve our circumstances.

We want growth, and support it, but not any price, and this covers just about all the things that might be strained if we were to go for growth.

Preserving our lifestyle and the environment, not damaging family and workplace relationships, sharing the benefits 'fairly' are seemingly all requirements of our support for growth.

There are other approaches, but these are politically less palatable to the current government.

The unofficial view of Treasury officials is that more structural adjustment is necessary, as the report New Zealand Economic Growth; an Analysis of Performance and Policy on the Treasury website makes clear.
The Business Round Table has cited an OECD report, The Sources of Economic Growth in OECD Countries to emphasize the importance of "getting the fundamentals right". That means, says the BRT, reduced welfare payments, lower taxation and smaller government. "No country that is comparable to New Zealand has achieved growth in per capita GDP of 4 percent a year or more on a sustained basis with our ratio of government spending to GDP."
Engineers group IPENZ Chief Executive, Dr Andrew Cleland noted the link between our social and environmental values and our national prosperity. "The research indicates that New Zealanders do not understand the connection - too many Kiwis think they can have the best of both worlds. Well-intended decisions based on our environmental, social and economic values could ironically end up contributing to a continued decline on all three fronts - something no one wants.
The GIAB report is disturbing. Its central message is not to trample on Kiwi values. But it also claims that our values will deliver prosperity. That says New Zealand can snuggle down again, reassured that we do not have to make any hard or difficult choices to get prosperity.

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