The Economist on NZ and Key


On a long list of yardsticks his country of only 4.7m people—“the last bus stop on the planet”, as Mr Key puts it, has been a striking success. The World Bank recently rated it the easiest place on earth to do business. The Legatum Insitute, a think-tank in London, judged it—by crunching nine different criteria—the world’s most prosperous spot. Transparency International, a Berlin-based anti-corruption monitor, reckons it to be the world’s fourth most honest. A clutch of other league tables puts it in the top ranks—for happiness, healthiness, democracy, freedom, among others. Bloomberg recently reported that a growing band of magnates from the United States, Russia and China (among them Jack Ma of Alibaba, reckoned to be China’s richest man) have bought, or want to buy, hideaway homes in safe and beautiful .

The bald figures testify to New Zealand’s perkiness. The city of Christchurch, near the epicentre of a devastating earthquake in 2011, in which 185 people perished, is bouncing back. The national economy has been growing at a steady 3.5% a year; unemployment is under 5%. The employment rate is one of the highest in the world. Wages, says Mr Key, have risen by a quarter in real terms since 2008.

The increase in real wages is a big factor is why so many are happy. That is what makes a difference to families.

Mr Key, a former currency trader in Singapore and London whose own wealth has been reckoned at more than $35m, has applied what he calls a policy of “radical incrementalism”. He has lowered income tax rates (to 33% at the top), brought the national debt down to 25% and partially privatised a batch of state utilities. At the same time he has raised VAT from 12.5% to 15%, reformed health care and increased various benefits (for instance, by making prescriptions and visits to the doctor free for children under 13).

And got the books back into surplus.

Whether or not the National Party retains its ascendancy next year, Mr Key must go down as one of New Zealand’s most successful leaders. And New Zealand, under his stewardship, can claim to be one of the most successful countries in the world.

Not a bad tribute.

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