New Zealand makes no economic sense in a global market place. 

If you follow the logic of some economists this week who tell us to ‘red-zone’ small towns in New Zealand, then presumably the same logic should apply globally. New Zealand is too small, too far away, with too many old people. Logically it should be ‘red-zoned’ and we all move to big countries with more people.

Just as small town Otaki is to New Zealand, so New Zealand is to the rest of the world. 

But the idea of a ‘exit strategy’ from New Zealand is plainly ridiculous. For a start, where would we all go? No-one wants us. We’re New Zealanders. We belong here not somewhere else. 

The same is true of regional New Zealand. If some small towns are dying we don’t ‘red zone’ them as if a natural disaster has struck, and send everyone to Auckland. We look at why some towns thrive and some don’t and work out what to do about it. 

Economies exist to serve the people in it, not the other way around.

That’s the difference between the right and the left in this election. Labour has always advocated for government intervention to correct the stuff economies can’t get right if left to their own devices. It’s governments not economies that make sure the nation’s wealth is fairly distributed across the whole country, and that unemployment is low - everywhere.

I was on TVNZ’s Q&A programme earlier this year when National’s Steven Joyce said that if someone living in Shannon couldn’t get work, they should drive to Wellington. 

He might as well have said shut the door, turn the lights off  - nothing to see here.

Labour deserves praise for coming up with a policy to actively grow the regions. $200 million into projects like developing Opotiki Harbour, Dunedin's Hillside railway workshops, and reopening the mothballed Napier-Gisborne rail line would go along way to growing local economies in those regions.

If we’d listened to these ‘red-zone’ economists decades ago, Martinborough would have been closed down when the wool trade declined, and today no-one would head over to the Wairarapa to do the famous wine trails and stay in the quaint B&Bs. A plan to create a centre of excellence for fishing in Nelson when that town was on its knees, would never have happened. 

The city of Nogales is cut in half by a fence. Nogales Arizona in the North is in the United States. It’s prosperous. Its kids go to school and achieve decent grades. Wages are high and people have access to health care. Nogales Sonora in the South is in Mexico. The income of the average householder is about one-third of those in Nogales Arizona. Most teenagers don’t go to school. Crime is high. Daron Acemoglu and James A Robinson have written a brilliant book, Why Nations Fail, looking at why one half of this town is rich and the other poor.

Simply put, Nogales Arizona is what happens when governments decide to make towns thrive and invest in infrastructure and education and jobs. Nogales Sonora is what happens when you ‘red zone’ towns and leave them to die.


Comments (4)

by mikesh on July 24, 2014

At the risk of sounding repetitious, I would say that a land tax needs to be central to any regional development policy as it would provide additional incentive to firms to set up their operations in, or move to, regional centres where land is cheaper. I often wonder whether the abolition of land tax by the 4th Labour government might have been one of the factors encouraging the drift Northwards. At any rate it seems to have been a shortsighted move by that government.

by stuart munro on July 27, 2014
stuart munro

The so-called 'centre of excellence in fishing' is an optimistic description of an industry so absolutely committed to slave fishing at the expense of local jobs and cumulative capacity development. 1% - is the value of returns and employment of the NZ Fishing industry relative to Japan. We have a somewhat larger littoral resource too. This is a shameful underperformance - NZ can do much better. And the slave ship operators and those who enabled them would face imprisonment in any country with a rule of law.

by Andrew Osborn on July 27, 2014
Andrew Osborn

A thought experiment:

If instead of red zoning some of those dying rural towns, some of the more obnoxious occupants of those towns were removed, would those places really be so bad?

I'm thinking that, say, an empty 'timber town' might be worth a fair bit more than one with its denizens still inhabiting it. A possible makeover to become a tourist or retirement community? A project for a property developer?

Like I said - just a thought




by stuart munro on July 29, 2014
stuart munro

Interesting Andrew:

"If ... some of the more obnoxious occupants of those towns were removed..."

Were you thinking of Polish Jews specifically or did you have a more localised definition of untermensch?

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