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.