The 2008 Heritage Index of Economic Freedom
The Heritage Foundation has released its 2008 Index of Economic Freedom.
NZ remains highly ranked in 6th place, however at 80.2 is just above the threshold of being “free” rather than mostly free. We have dropped from 81.65 and 4th place in 2006. The number of countries in each band are:
- Free 7
- Mostly Free 23
- Moderately Free 51
- Mostly Unfree 52
- Repressed 24
- Not Ranked 6
So we should be proud to be one of the seven. Hong Kong is 1st on 90.3, Ireland 3rd on 82.4, Australia 4th on 82.0. Of course we need to be very free and competitive to keep our standard of living. As a very small and very geographically remote country we have a natural disadvantage which we need to work hard at, so we can keep pace with Australia for example.
The bottom country is North Korea on 3.0. Then Cuba 27.l5 and Zimbabwe on 29.8.
Amongst the top ten, NZ had the highest score of 99.9 for the business freedom category. Only 60.5 for fiscal freedom though and 55.99 for government size (Hobng Kong is 93.07 here). Corruption score of 96 is also highest in top ten which is good. Our category scores (and change from 2007) are:
- Business Freedom 99.9 (nc) 1st=
- Trade Freedom 80.8 (-3.2) 52nd
- Fiscal Freedom 60.5 (-0.9) 138th
- Government Size 55.99 (-0.46) 122nd=
- Monetary Freedom 83.67 (-0.89) 14th
- Investment Freedom 70 (nc) 18th=
- Financial Freedom 80 (nc) 8th=
- Property Rights 90 (nc) 1st=
- Freedom from Corruption 96 (nc) 1st=
- Labour Freedom 85.5 (-2.58) 12th=
The rankings are out of 156. So good in most areas except government size and fiscal freedom where we are near the bottom of the world.
One can get some interesting sub-category rankings. For example:
- Our individual income tax rank is a very low 111th
- Corporate Tax rank is 115th
- Weighted Tariff rank is 60th
- Inflation rank is 55th
- Days to open a business rank is 21st
Again we are in the bottom quarter of the world when it comes to freedom from high taxes. We are just fortunate that most other things are very good.
January 16th, 2008 at 9:00 am
Amongst the top ten, NZ had the highest score of 99.9 for the business freedom category. Only 60.5 for fiscal freedom though and 55.99 for government size (Hobng Kong is 93.07 here). Corruption score of 96 is also highest in top ten which is good.
Doesn’t this completely undermine the right’s spin that New Zealand is run by a corrupt, anti-business government if we’re scoring so highly even on the right-wing Heritage Foundation’s economic ‘freedom’ index?
January 16th, 2008 at 9:05 am
Will be interesting to see if Labour uses a study from the Heritage Foundation.
January 16th, 2008 at 9:20 am
That is so NERDY, farrar, who wastes time with reports like that ! If you want a view on HKong talk to Cactus K. HKong is owned and controlled by Beijing and is not ” free ” at all. The ” laissez -faire” policy adopted by the Gov can be just as quickly changed, if they should so chose.
Is that Freedom of any sort, I dont think so !
January 16th, 2008 at 9:20 am
This survey most be relying on data provided by the Socialists. I’m sorry but you have tried to open a business in this country? With ‘health and safety’ regulations and regulators on your back, zoning regulations, compliance fees, and every other government agency doing its best to get a piece of the pie so they can redistribute it to some dole bludgers? Highest level of business freedom in the world my arse
January 16th, 2008 at 9:26 am
On what basis have we dropped two places in the ‘freedom’ stakes? – I will take a rough guess or two:
Abuse of MMP system which enabled constitutional reform to be drafted in secrecy
Law changes to ratify previously illegal practices by Government as Legal
Reform of the electoral Law to affect freedom of expression for one year in three
Failure of House Speaker to enforce procedure in Parliament when it disfavours government
Speakers reluctance to prosecute illegal practices by MPs thus establishing a two tier justice system
Passing of Electoral Finance Act and Appropriations Act
Rubber-stamping GG
Cumulative effects of above and the lack of a Second House
I wonder when the rot will stop, or are we too far gone??
January 16th, 2008 at 10:04 am
Don’t be mean DPF!
We should be grateful we have the most honest government of Australasia, the most dedicated to freedom of expression and liberty, the most enlightened leader these shores have ever known in the name of H. Clark, the most profligate Minister of Finance (M. Cullen), the wonderfully articulate P. Horomia, the most generous welfare state, no underclass at all, and so on.
God help New Zealand.
January 16th, 2008 at 10:18 am
“Again we are in the bottom quarter of the world when it comes to freedom from high taxes. We are just fortunate that most other things are very good.”
The NZ productive sector- a herd of cows set up to be milked by the unproductive sector.
Actually, if this survey is similar to a number of others, it gives a misleading pictutre on business freedom thru not measuring some factors that in the case of NZ, have a considerable impact.
January 16th, 2008 at 11:48 am
It seems to me that our tax rates are the biggest problems there but that is no surprise. I can help comparing NZ to England where the average wage is round 22,000 pounds and the first 5,000 is tax free. Imagine how much the lower income people in NZ could be helped if we did made a similar proportion tax free (and the beauty of such a policy is that it can be passed off as egalitarian – everyone can have their first so many thousand tax free!!
Inflation is also a big concern.
January 16th, 2008 at 12:06 pm
“Hong Kong is 1st on 90.3″
Would that be the same Hong Kong which is a dictatorship?
January 16th, 2008 at 12:09 pm
Read the description for Switserland, they have really messed up the catagories
January 16th, 2008 at 12:17 pm
This is all hUlan kkkklarkkkkk’s fault. I hope her and her stalinist comrades rot in hell, as NZ is becoming the Cuba of the Percific!!!???????
January 16th, 2008 at 2:36 pm
We used to be number 1 or 2 on these survey’s back in the late nineties
January 16th, 2008 at 7:17 pm
As you point out DPF we need to be fiscally nimble and government lite to compete.
Increasingly we are not.
Parker’s EMS regime will deter many and lead to closure of many of our remaining manufacturers, so much for the Greens and Buy Kiwi MAde!
January 16th, 2008 at 8:37 pm
Surprised NZ didn’t do better in labour freedom. Seems to me Labour has been pretty free to do exactly as they like with no fear of prosecution.
January 17th, 2008 at 9:14 am
The high ranking for “business freedom” is somewhat distorted by their chosen “standard” for “ease of licensing.” Such organisations need a standard and the one they have chosen is probably fine for most countries – but not ours.
They measure the time taken to get a resource consent for a warehouse in an industrial zone. And have been given some remarkably optimistic figures in my opinion – by the councils.
But we have to admit that such a process is normally reasonably quick
However, try building a timber processing plant in a rural area and you soon give up and built your plant in Australia.
Most of our industrial activity is rural related and has huge problems getting consents.
January 17th, 2008 at 9:33 am
I don’t see the critical factor aligned with business freedom.. cost of business.
Sure, the cost of tax is covered but not the welter of regulations that push us towards small businesses that don’t employ staff and which simply make enough for wages, not stuff for export and higher GDP.
That shows up in the NZ export figures where in 1981 export was 29% of GDP, by 2006 it had slipped to 28%. Meantime the OECD went from 30% of GDP to about 47%.
JC
January 17th, 2008 at 6:39 pm
I agree with Daedalus X, Redbaiter, and Owen McShane. Something doesn’t quite stack up. Are these surveys using “case studies” in which NZ scored relatively highly, while an overall view would show up something different?
There are some interesting points in “The Mystery of Capital” by Hernando DeSoto. One is the cost of starting a new business relative to the potential earnings of that business. The kind of regulations NZ DOES have, that studies tend to play down, lock persons with less start-up capital out of the business process altogether. DeSoto calls it “the glass bell jar effect”. The regulations are OK where the existing “rich” are concerned, because it tends to leave THEM INSIDE a “glass bell jar”, able to afford the costs of regulation, while potential competitors without the capital are on the outside unable to break in.
I keep saying that James Wattie could never have got HIS venture off the ground if he were trying to do it today in NZ.