Australia vs NZ

Christopher Niesche writes in the Herald:

In the last quarter of a century while New Zealand has suffered three recessions, Australia has enjoyed an uninterrupted and unprecedented run of economic growth.

But in Australia, we have little to be smug about.

Our prosperity – some of it hard-earned and some of it accidental – is now holding us back.

In the past few years, New Zealand has been able to push through economic reforms that will place it in good stead for the future, things like reversing the budget deficit, raising the GST and freeing up the labour market.

Arguably there was an appetite among voters for reform in the wake of the 2008 recession, which demonstrated that changes were needed.

In Australia, meanwhile, we have our ever-expanding McMansions, with a big screen TV in every room and a jet ski in the garage. Why would we need economic reform?

The answer, of course, is that the accidental part of our prosperity – the mining boom – is well and truly past us and so too are the good times.

There are a range of reforms the government needs to act on – raising the GST; reining in government spending to fix the deficit; increasing the national rate of savings; and pursuing free trade. 

Business confidence in Australia remains subdued and migration to NZ remains strong despite predictions it had peaked.