The Minister of Finance says it is but, parochialism aside, are we doing anything to ensure it really is?
One of the necessary skills of a politician is to hold on to at least two contradictory positions at once. * Consider how, following the report of 72,000 New Zealanders ‘permanently’ leaving the country in the past year, Minister of Finance Nicola Willis said that New Zealand is still ‘the best place to be’. Given the evident superiority of Australia on most material/economic measures – even though many of the popular comparisons are oversimplified – she is presumably arguing that New Zealanders experience higher wellbeing than Australians (a much more difficult comparison to assess).
Meanwhile, the same minister is amending the Public Finance Act to remove reference to wellbeing as a relevant government goal. Apparently the government is confining its economic management to material output, where New Zealand is doing badly, and washing its hands of wellbeing where it says New Zealand is doing well. Huh?
Let’s leave the resolution to the politicians but reaffirm the minister’s view that material consumption does not capture the totality of wellbeing. Consumption can go up and wellbeing go down (as we are reminded when GDP rises and yet another swimming hole of our youth is closed because of pollution).
Is wellbeing higher in New Zealand than elsewhere? People migrate for wellbeing reasons rather than just higher material income. I puzzled over this when I was writing Not in Narrow Seas: The Economic History of Aotearoa New Zealand. One chapter, ‘Why Come to New Zealand?’, concluded that, as best we can compare, there was not a lot of difference in real incomes between New Zealand and other migration destinations at the end of the nineteenth century. (Perhaps New Zealand, the most distant, was the least attractive.) Yet people came. Sometimes there were special reasons but the chapter concludes that the general reason was for lifestyle and opportunity. Immigrants were not attracted to industrial urban living (most came from rural backgrounds) and they saw opportunity (especially of acquiring their own land).
One assumes the outflow of New Zealanders reflects similar assessments, aside from those who are on OE and plan to come back. Some of those who plan permanent migration will be disappointed and return too. But the outflow signals that many see leaving New Zealand as a means of improving their lifestyle and opportunities. It is blind chauvinism to assume that New Zealand is the best place to be.
Of course, there are those who are keen to come to New Zealand, but most are from countries with levels of wellbeing lower than New Zealand. They are not places where New Zealanders are typically migrating, OE aside.
This raises an issue which I sketch here. Could we solve our population-aging challenge by higher immigration of younger people? The statistical projections suggest it might work for a couple of generations, after which the new migrants would be aging too, while their fertility levels converge to ours.
Immigration may solve the headcount issue (and provide enough staff for us when we are in our nursing homes). I’ll leave aside the question of to whether the economy can generate enough foreign exchange for the standard of living necessary to sustain the larger population; there is surprisingly little analysis on this.
But we also need to think about the changes to culture that a high migrant inflow would generate. It is already happening; the increasing cultural diversity need not be bad but there seems to be a limit to the rate at which a community can absorb different cultures; that limit would be exceeded if the inflow was enough to compensate for the age imbalance. Above that limit there may be a nasty backlash against immigrants, as is happening now in Europe and the US.
(This is a matter for sociological expertise, but an economist would be remiss not to draw attention to the challenge. I’ve had to think about it, because in the nineteenth century, the immigrant culture from Britain soon overwhelmed the culture of the indigenous population. It was not so culturally inflammatory – although some pretty harsh things happened to the first peoples – for two major reasons, as well as a high rate of intermarriage. Māori voluntarily and rapidly absorbed much British culture including Christianity, new technologies, market-based commerce, and literacy. (In the mid-nineteenth century proportionally more Māori were literate than settlers.) Second, the settler and Māori populations largely lived in different areas – town and country. Neither applies today; New Zealanders are not nearly as adaptable as Māori were, while migrants flood into the cities where New Zealanders live.)
Part of the solution could be the return of some of the New Zealand diaspora. It is estimated to be as high as a million although that seems to depend upon a generous definition. When I looked, the number seemed to be in the 300,000-500,000 range, up to 10 percent of the domestic population.
Of course, we want New Zealanders to engage with the world and OE is a vital part of that, although aspiring Ernest Rutherfords and Kiri Te Kanawas will hardly flourish if they remain based in New Zealand. But for lesser mortals it would better for us and them if they were back home. (The retired returning are not as attractive in this regard as those of working age; while they bring their retirement income, they add to the demands on the already limited workforce.)
And so we return to the minister’s claim that New Zealand is still the best place to be. Clearly many of the diaspora and those contemplating joining it think she is wrong.
What we may ask the minister is what her government is doing to improve wellbeing. Her response might be that it is trying to get the economy working better. But doing so is often at the expense of activities which promote wellbeing.
Once New Zealanders said we were the best place in the world for children. We would not be so confident of that claim today. Once New Zealand prided itself that it was a society in which people could get good jobs; we don’t today (we get them in Australia). Once we skited that New Zealand was an egalitarian society in which Jack was as good as his master (in those days we were not gender sensitive) while everyone had the opportunity to use their capabilities. Once we had a public service we were proud of. Once our cultural aspirations were supported by, promoted by and funded by the government. Once we had a social objective to enable everyone to participate in and belong to their community. Those onces seem to be a long time ago.
* Scott Fitzgerald wrote: ‘The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.’ I leave the reader to judge the extent to whether our politicians function well.